AMERica on-Line, Another over valued company? Message Board

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Technology Stocks : AMERica on-Line, Another over valued company?

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To: sohony who wrote (139)	6/16/1996 10:18:00 PM
From: Zoltan!	of 222

Will AOL's slogan be "Mediocre Content PLUS Commercials". AOL & Advertising - Big mistake! HUGE! Significant earnings from advertising are likely to prove illusory to AOL for the following reasons: 1) Products Differentiation - The absence of advertising on proprietary online services is a positive way to lure and keep users. Internet users tolerate advertising on the Net in exchange for "free" access to a site's content. Needless to say, AOL is not free and advertising should only spur disconnects. 2) Plodigy tried this strategy, with disasterous results. 3) AOL already has a great credibility problems concerning its "free" artwork. It will doubtless assure all that advertising downloads will be "free", but who will believe that? Downloads on AOL are already excruciatingly slow, how can this help? 4) The INTERNET is "sexy". This is where ad $ will be targeted. There is nothing sexy about AOL. BTW, I stopped reading MF just about when the stock hit $70 and their MF AOL stock hype artist declared AOL valuation should be determined like a CABLE company, something like $2000 per subscriber! MF then justified some further ridiculous target price based on this cable analogy. -Even a real fool would reject the cable analogy on its face. As if AOL installed and owned the phone line! It's truly insulting to read such crap. And although I'm unsure of the precise legal relationship MF has to AOL, wouldn't this hyping be considered a conflict of interest anywhere else? (A far more accurate analogy would be among AOL and pay cable channels except that most premium cable channels come sans paid commercials. Therefore, an argument can be made that AOL should lower its service fees to compensate its members for the unwanted intrusions.) Analysts are correct in disregarding phantom advertising revenue in their projections. Expect more downgrades on AOL as the air continues to come out of that balloon. Regards

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