Count me in the bear camp. Never used AOL. If I can get free isp service, I surely never will. As for your list:
- Serve 2.6 billion web pages each day.
- Facilitate the exchange of 56 million daily e-mails.
- Hand out 121 million stock quotes.
- Exchange 432 million instant messages.
- Host 17 million members for an average of 55 minutes usage each day.
- At the peak, serve 1.1 million users, twice CNN and CNBC's audiences.
- Serve 50 million unique users on your web sites.
Admirable, but technology trends will lower the value of all this. Silicon economics are on Microsoft's side. Bandwidth will be cheap cheap cheap. Computing hardware cheap cheap cheap. Scalable software - free to Microsoft.
As far as the marketing clout, industry presence, and sheer $$$ necessary to get these users - not a problem for Microsoft.
Communities too are springing up all over the place outside of AOL's world. As users become more sophisticated and can discover the wonders of the internet for themselves without AOL handholding, that part of AOL's appeal will continue to wane.
Continuing:
- Find 25 million users for client based chat service (ICQ), and convince them to log on for hours each week.
Too much pressure to standardize. That's what the internet is all about: Open standards and free service. How ironic to have Microsoft on the right side of this issue. Besides, this little chat stuff will give way to real time voice over ip, then video. And it'll all be here sooner than you think, without need for proprietary anything.
AOL's valuation seems in large part pegged to AOL's 'reach' into people's internet experience. ICQ, Winamp, and all these other technologies are or will soon be standards-based commodities downloadable from who knows how many providers, whose utility will be restricted to the direct functions they serve. Hard to see all this as a revenue source - either direct or indirect - for AOL or anybody else.
- Purchase large stakes in online giants like The Motley Fool, Sportsline, Excite, NetGrocer, and Online Chef.
- Lock down huge marketing contracts with amazon.com, Barnes & Noble, First USA, CBS, Tel-Save, E*Trade, Ameritrade, Schwab, DLJ, and countless others.
Microsoft has been there done that. And has the pockets to do a whole lot more of that.
I just don't see it happening for AOL. Ironically, they're on the short end of the prevailing trends when pitted against Microsoft. The bullish case for AOL is almost entirely dependent on how firm the government will be with Microsoft. |
