How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 459.86

+0.7%

Jan 16 9:30 AM EST

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To: Jon Stept who wrote (27906)	8/5/1999 2:28:00 PM
From: Uncle Frank	Read Replies (3) of 74651

Jon, I have been a happy aol stockholder since the end of November 1998. I sold my entire position recently @ 124 (which gave me a stunning 170% return in 7 months) because of changes in aol's fundamentals, and posted the following rationale on the G&K thread earlier this week: I portrayed aol as a "sticky portal" a few months back. But in order to apply the stickum, they have to get the newbies to come into their lair. This will be a slow motion battle, and the ammo will be wads of money. As I see it, * AOL will continue to spam the newbies with cd's and free trials. * Mr. Softee will give away $400 rebates towards a new computer (which is a free low end computer) for MSN sign ups. * AOL's adoption rate will decline, though their retention rate will still be high. But their business model will be severely damaged. I don't think content is an issue any more. With msn as an isp and Yahoo as your home page, you don't give up much in terms of content or ease of use vs. aol. In that post, I didn't even factor in the impact of dell and gateway giving away free isp along with their computers, which will hammer away at aol from the other side while they are confronting msft. It is hard to imagine that aol will emerge unscathed from the titanic forces at play against them. And once their growth slows, the market will really turn on them. Frank

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