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Technology Stocks : America On-Line (AOL)

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To: LLCF who wrote (41321)2/22/2003 7:41:22 AM
From: Demetre Deliyanakis  Read Replies (1) of 41369
 
The rise and fall of AOL is a classic case of companies investing large amounts of money in new and unproven technologies. Time Warner would have been better off pursuing a more cautious expansion into the internet.

Convergence is a term that will be studied in MBA programs for the next few years.

Diversification and Conglomerates were the rage in the 1960's and 1970's and fell out of favor in the late 1980's and 1990's.

You have to remember that unlimited sums of money were made available to the TNT (Telecom,Networking,Tech) sectors during the 1990's. Thus, many companies over expanded, because they thought that demand for the new products would continue to grow at astronomical rates.

It is my view, that AOL will recover, and shareholders will be rewarded with a much higher stock price over the next 3-5 years.

In the future, there will be less free content available on line. People that want content from Time Inc magazines will have to start paying for it.

Dow Jones has been charging for Barron's and the WSJ for at least 6 years, and they are making a tidy profit.

I think that AOL will begin to copy the Dow Jones business strategy of charging for content.

I currently own shares of AOL, and would buy more on weakness, below $10.
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