1. AOL is not yahoo
There is a distinct difference between the services provided by both AOL and YHOO. Although both have great mass market leverage, YHOO can be considered a "low end" service as compared to AOL. AOL is distinctively selective with whom it chooses to bed with. YHOO is not. Case in point is the online shopping strategies... AOL is akin to Nordstroms, YHOO to Sears. Both provide key products/services but to different audiences.
2. AOL does not "need" cable
Although I believe cable will be a key player in the broadband strategy of the future (I would not be bullish on ATHM otherwise), one cannot be so conceited as to believe that cable is the only pipe to the consumer. As technologies fluorish, other means may become more practical, i.e. Wireless access (QCOM HDR @2.1M/sec burst). And so, ATHM better get intrenched, and fast. AOL may be the proper vehicle for doing just that.
3. AOL has a "lock" on the young demographic
The concept of community is a strong one. This concept is what makes sites such as this work. AOL is extremely proficient at community development because it provides
1. simplification of the web
2. key brand-name partnerships for "sticky" content
3. Solid interactivity tools
(i.e. instant messenger technology)
4. All at reasonable price points.
4. AOL is not "dependent" upon its paying customers
Although at this time, subs. rev. compose ~60-70% of revs. If you examine the financials, the company is successfully leveraging this customer base into a diversification of revenue streams : stronger ads/comm. rev., and eventually internet services rev.
Broadband will be a key player in the internet space not based on the technology of today, but because of the technology available in the future : Video on demand, instant communications, etc..
My point is that I believe Edamo is right, AOL & ATHM should get together. It will be a win-win situation for both.
Happy Thanksgiving,
tci |
