America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: DOug MaGdaleno who wrote (3483)	6/18/1997 2:12:00 PM
From: Todd Daniels	of 13594

In the home market, growth of PC sales, especially of brand new buyers, has been weak all year -- less than half the 25-35% rates AOL's growth rode. (And more than 60% of sales now are upgrade and additional, not new buyers as was the case '92-'96) The techs now are on tanking on prospects of slowed demand for PCs overall. Yet the market continues in disconnect about import of that for AOL sub growth and general growth of audience for net advertising overall (YHOO, XCIT, CNWK etc.) AOL is UP 1/8 on announcement it will deploy X2. Despite that its own stats (on www site) say that less than 15% of subs have even 28.8; and despite that X2 sales have sucked in face of the standards issue. I call the complete disallowance of any negatives or possibilities that might impact AOL "irrational isousciance" (After the G man). AOL now trades more 70 times FY 98 concensus which is 40% premium to concensus 5 year growth rate -- in other words, it's being valued better than is MSFT, and as if it already has demonstrated ability to deliver Microsoft-like profit history.

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