To ALL;AOL GAME ENTHUSIASTS WILL NEED TO PAY TO PLAY
Six months after America Online Inc. switched to a $19.95 per month
flat-rate pricing plan, the nation's largest Internet service and online
content provider plans to start billing subscribers extra, hourly charges
for access to the company's online multiplayer games. Industry analysts say
that the company will be looking at this special pricing for "premium"
services to determine whether subscribers are willing to pay extra for
access to other content, such as financial services, news, etc. (San Jose
Mercury News 11 Jun 97)
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And
MICROSOFT RETHINKS THE NETWORK BUSINESS
Microsoft says it plans to get out of the Internet business over the next
few years and focus instead on creating original content for the Web.
Microsoft Network is the third-largest Internet service provider, after
America Online and CompuServe. While the company says it will provide
Internet access "for the foreseeable future -- or until the Internet becomes
a mass medium in a few years," Microsoft will concentrate on providing
content to selected Internet service providers -- a far more lucrative end
of the business than providing network access. "Microsoft is good at
building markets, then moving to the most profitable part of that market,"
says an editor at ZDNet. "They don't want to be in the pipeline business.
The money isn't there. They want someone else to carry their stuff over the
Net." (St. Petersburg Times 9 Jun 97)
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MSFT sees the writing on the wall, no profit in the ISP biz,
at least for a big company..the longer AOL hangs on to her
modems the more she will lose. She has to re-make herself,
and there is no way even a re-made AOL will ever turn the amount
of profit it takes to justify even a 4th of her present market
capitalization..
A resent check shows AOL down from 8 milliom ( I doubt she ever had )
to claiming 6.2 million subscribers..( which I also have reason to
doubt )..
The ongoing exersize of insider options continues to flood the
market with new shares..she now has about a 5.8 Billion Market cap.
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Yahoo who has no were near the expence and over head AOL has is
now leading in user friendly content, and has the highest hit rate
of any internet station..and is turning up the heat, with chat
rooms that operate smoothly and far faster than AOLs, personalized
news and stock quote retrevial, and also Real Audio content of
a wide range..Yahoo has come a long way from being just a serch
engin to being one of the largest Data Bases on the Web. It
will not try to compeat as an ISP to comsumers..( a losing situation for any but small local providers )..who more and more have to
compeat with non profit ISPs..which are on the increase.
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The market cap of AOL is rediculas $5.8 Billion ! do to the huge
amount of shares the puplic has been scamed into buying.
Were Yahoo who could turn out to be AOLs number one compeditor,
has only a $ 8 million market cap..
It's not exactly accurate to say the public bought all these shares
AOL has stuffed into the market..as 74% of them are held by
institutions and mutual funds that are primarly managed by people
you could say are brain dead when it comes to understanding
what is happening on the internet, momentum buyers..and bean
counters that have bought into the scam..but being they are
supposed to be professionl stock pickers cant admit their
blunder..who will be the one or two out of 313 institutions that breaks the bond and sells off enough of that 74% to cause the panic
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Mean while only 29 institutions hold 1.8% of yahoo..due to her
small market cap she does not qualify for many mutual funds
at this time..yet she is by a factor of about 9 to 1 a better buy
than AOL..however this theam could take several years to prove
it self, I would wager that by the year 2002 any one invested in
Yahoo will be at least 5 times better off than one invested in
AOL..so put this up for 5 years then look at it..I would not
be suprised if it turned out to be 10 times or more..
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AOLs future is full of gloom and doom..the market will shake it
off as an almost no event..but 5 billion dollars will have been
lifted from the pockets of people invested in the mutual funds
that own this dog..and they won't even know what happened to
them <G>
Jim
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