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Technology Stocks : America On-Line: will it survive ...?
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To: chenys who wrote (3234)5/27/1997 11:05:00 AM
From: Zoltan!   of 13594
 
Saw AOL's Pittman on recent "Charlie Rose" show.

Basically said hyping, usually thru mega advertising, to build "brand" is more important than the product. He's followed that credo throughout his career where he successfully built the business of pedestrian products such as Century21 and Great Adventure into "great" brands.

Gave the example that Pepsi always beats Coke on taste but consumers pick Coke because of superior "brand". Inference: So Csi, internet etc. may be superior but AOL puts the $ where it counts, aggressive promotion and training the consumer to pick its brand.

So while AOL seems to be built upon the maxim that "no none ever lost money underestimating the intelligence of the American public" is it that AOLers are dumber or simply less informed? Pittman noted that AOLers use only 20% of their online time surfing the Net - something Charlie Rose could not believe, (after all he's seen AOL's content vis a vis the Net). But Pitt basically said Rose was not the typical AOLer - too savvy.

But is that a permanent state, and if not, will AOLers remain with AOL? They will if they are dumber, as implied, they may not if they are just uninformed. If that 20% moves to something more like 50% the answer may no longer be so clear nor may AOL's future.

Pittman stated there will be only a few winners in online access business and AOL is so big that it will be one of the few survivors. I am not so sure, it may be the biggest "brand", but it's more than surely tainted - the reputation for poor service is as much a part of AOL's image as anything.

Which will win? Blind allegiance to brand or actual service? The cynical will have to side with AOL.

Regards
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