I hope that PA can look beyond the past and into the future. The following taken from cnbc.com 9/21/99:
"AOL stock could rebound but I think it needs to get serious about broadband first. This is something I told management of in January 1998 when it should have acquired @Home. There's clear options that I see for AOL still in this space."
-- Steve Harmon, e-harmon.com CEO
As one of the most widely-read Internet analysts on the Web, Steve Harmon looks at the sector with a different twist than other analysts. In today's Q&A, Steve digs into his e-mail bag to take your questions on AOL, Globix Corp., RF Micro Devices, Texas Instruments, and more. Check out this Money Talk exclusive!
Money Talk: AOL's stock price has been under a lot of pressure lately starting with insider selling last month. There is a lot of panic and concern among shareholders regarding the free ISP's, slow AOL service, no broadband deals etc. Okay, the holiday season will take the stock back into the 100's but where will the price go after that?
Harmon: I continue to believe that AOL {AOL} is a long-range play that has the enviable position of having the largest installed base of users across its many vehicles: 1) AOL 2) Netscape 3) Compuserve 4) ICQ 5) AOL.com
On the free front, consider that broadcast TV is "free" while cable is not. AOL can offer both services since it has the installed user base. Time Warner or Viacom offers and sells shows to the networks and makes money off of pay-per-view, cable and motion pictures.
I think if AOL has its druthers that it may have to "hybridize" its model across services, platforms. The notion of free ISP has been addressed by AOL in Europe with a freebie under the Netscape brand.
A key assumption about free ISPs is that people will tolerate a constant ad stream model and if free ISP can scale to sustainable business of more than 10 million active users. AOL is at 20 million paid subs and about 50 million total users across its outlets.
However, I do believe that AOL must act on broadband in the cable arena. This is something I told management of in January 1998 when it should have acquired @Home. There's clear options that I see for AOL still in this space.
It's long overdue for broadband in a big way. AOL stock could rebound but I think it needs to get serious about broadband first. Go for the coaxial wire that reaches 70 million U.S. households.
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