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Technology Stocks : AUTOHOME, Inc

ATHM 23.69

+0.4%

10:32 AM EST

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To: Tera Bit who wrote (13687)	8/7/1999 3:41:00 PM
From: gpowell	Read Replies (1) of 29970

I would have said the same thing a week ago... in fact I did. How many subscribers does AOL have and how many analog dial up lines are there in consumer homes? The percentage of households online is currently conservatively estimated at around 25% The 4.67% penetration rate is not that bad when you consider the fact that they are constrained by the MSO's ability to do the installs. Indeed subscriber growth last Q looked good to me as compared to AOL. Fremont has been upgraded for two years yet only has a 2.67% (6000 total users) subscription ratio. Why? No one but the partners involved know whether the subscription ratio in Fremont is being limited by the MSO's themselves or by demand. I have run a few numbers and could easily believe the ratio is constrained by the MSO's but consider the impact on @Home if this is not true? I am confident there is extraordinary demand for the services ATHM provides. Indeed they said as much on their last CC when they said the Matchlogic mail campaigns provided so many leads the MSOs said "stop". Again, I also had assumed the the MSO's and @Home were limiting subscriber growth rates until they switched onto the new AT&T backbone. Also It may be likely that the MSO's would not have added installers to meet rising demands; they probably could "save" money by waiting for cable ready PC's which Bell claims will hit the market in Q1 00'. However, anecdotal evidence is suggesting that the extraordinary demand for @Home's service may be limited to a few geeks until a compelling reason to change is offered. Speed doesn't seem to be enough for most current net users. Cost is also an issue. I was surprised in my informal survey of co-workers and friends how much saving 5 to 20 dollar's a month for internet service means to them. So what does this mean for all those brand new cable ready PC's sitting on the shelves awaiting buyers in Q1 of 00'? If the deep pocketed technical elite of the Bay Area do not want to fork over 5 more dollars a month for 100 times (ya right <g>) the speed?

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