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Technology Stocks : AUTOHOME, Inc

ATHM 23.01

+1.2%

9:40 AM EST

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To: im a survivor who wrote (15835)	10/2/1999 8:21:00 PM
From: E. Davies	Read Replies (2) of 29970

Would you rather have those 18 million sets of eyeballs with you, or against you ? <<E@home has the potential to easily gain market and surpass aol with sub numbers over time. >> You say "over time". You must be talking about Y3K. One thing that you forget is in the battle for subscribers is that AOL is available to anyone for only $9.95/month. AOL's value is in its content. Its not exactly well known for being a quality ISP. Some will insist on keeping AOL when they move to broadband, some will not. The percentage is of course a source of big debate. For those who insist on keeping AOL it all becomes an issue of price and bundling. AOL offers dial up ISP for an additional $12, DSL for an additional $30-$40 (when they finally get to offering it). @home also will offer cable for an additional $30-$40, but this price will vary with bundling with cable TV and telephony. It is not at all a simple thing to determine, but one thing is clear to me is that the law of numbers is not on the side of AOL right now. Some people (like Educator) will choose @home broadband simply because AOL DSL does not cover their area. Some people will pick cable over DSL as the ISP for price/performance reasons. Its not at all hard to imagine the ATHM/AOL split (in terms of who provides the ISP) reaching 50/50 in say 10-15 years. 50/50 would be a huge win for @home and a huge loss for AOL. Of course I expect other ISP's as well, actually it would be more like 35/35/30 where the 30% is everyone else. Would it be better if AOL used @home to provide ISP services? Someday yes. Right now it completely true that "As fast as it is available it sells". Not only is the marketing power of AOL not needed, even Excite has been told to turn off its marketing to limit demand. Like most everyone else I'd rather see ATHM and AOL work together rather than apart. The single biggest reason is that AOL popularizing broadband might actually keep the subscription prices higher. So far I have just not been able to imagine a situation that both sides can agree is fair. Eric

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