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Technology Stocks : AOL, now I get it
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To: Gary Walker who wrote (16)7/1/1996 11:57:00 PM
From: sohony   of 496
 
gary, rick how nice to have a civilized conversation about this after all those rude shorties. one more try. my point is that the current aol newbies are different from you when you were a newbie. as long as aol keeps reasonably up to date (for example they have offered 28,800 in all major markets for over a year now and their new 3.0 has most of the functionality you describe and more) they will stay. why? because for them the computer is a means to an end, not an end in itself. they're not sufficiently interested in the technology to need to go further. and the price will continue to come down so they wont have to look further for that reason either. why will the price come down without collapsing aol's stock price/profitability? because aol's business model will move from usage funded to advertiser funded revenue (which it will as the huge critical mass of their user base becomes the product they have to sell--in the finely targeted/response sensitive detail that advertisers crave). you are right about the reduced new subscriber rate. that IS what has driven the stock price down. however that was a deliberate strategy--dont know if you've noticed but aol has decimated marketing til the fall--rationale--then they'll have the new system in place and marketing money is best spent on the run up to the massive influx of newbie computer owners each xmas. and yes i do own the stock but i would sell it if it was overvalued temporarily (which it was at $70, a level which nonetheless will be exceeded by xmas of this year if i am right about this)
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