No, I mean operating momentum like this....
* Net new members increased to 8.6 mm from 8.0 mm (Q/Q); AOLnet modems increased to 375,000 from 287,000; usage/member increased to 18 1/2 hrs/mo from 18; advertising and commerce revenues/mem increased to $3.47 from $2.46; churn rates were at the lowest level in 2 years.
* Likely hit its 10 mm member goal by calendar year-end. Dominance across all fronts in the industry is a clear sign that its member acquisition efforts will continue to become easier over time (i.e., with critical mass come awareness and brand). For example, in F4Q roughly 40% of AOL's 600,000 new members were generated from co-branding and PC bundling efforts both much lower-cost member acquisition channels than the disk mailing strategies of the past. Poised to continue capturing greater than 50% of new consumer household that come on-line over the next several years.
* Average usage per month increased to 18 hours per member from 5.7 (yr/yr) 18 (Q/Q)and total hours spent on the service increased to 154 mm hours/month compared to 38 mm (yr/yr). AOL's operating model is evolving from subscription-only revenues toward one which resembles a traditional media company, whereby it leverages its existing member base into other revenue streams, such as advertising and transaction revenues. Member usage is a key driver of commerce and advertising revenues--MORE IS BETTER--as is evidenced by the per member increase in Advertising and Commerce revenues per member, per month to $3.47 from $2.74 sequentially. At the same time AOL's member churn was at the lowest level in two years and call center volumes continue to decrease suggesting that member satisfaction levels remain particularly high.
* Importantly,AOL members continue to spend more time on the AOL service than on the Web. Web usage per member declined to 11% from 15-17% in December suggesting that AOL's all-in-one content aggregation strategy is holding its members' attention. According to PC Meter, 55% of all consumer on-line activity is spent on AOL a statistic that has remained constant over the past several months. AOL's audience is reaching mass-media proportions during peak times it reaches the same size as CNN and MTV. A closer look at some of the 4Q'97 subscriber statistics, as compared to the same period one year ago, demonstrates the robust growth of the Company over the past fiscal year.
* More than 384,000 simultaneous users at peak, compared to 120,000 in the same period a year ago.
* 154 hours per month, compared to 38 million in the same period a year ago.
* 13.5 million sessions per day, compared to 4.8 million in the same period a year ago.
* 15 million e-mails sent to 27 million recipients, compared to 6 million sent to 12 million recipients in the same period a year ago.
* July 8, 1997- American Online, Inc. signed a four-year partnership with 1-800-FLOWERS. Under the agreement, the companies said AOL will receive payments totaling $25 million, plus a limited revenue share. 1-800-FLOWERS will continue as the exclusive seller of floral and plant products on AOL's service, a position it has held since 1994.
* July 8, 1997- Amazon.com, Inc. (AMZN-NASDAQ) and America Online, Inc. reported that they signed a three-year promotional agreement for Amazon.com, Inc. to be the exclusive bookseller on AOL's NetFind search engine and on AOL.com, America Online's proprietary website. America Online will receive $19 million over three years, with the possibility of additional payments if Amazon.com's sales exceed specified thresholds.
* June 10, 1997- America Online, Inc. announced an online commercial partnership with CUC International (CU-NYSE). In addition to travel, shopping and auto services currently available, CUC will offer PrivacyGuard to AOL's 8 million plus subscriber base.
* In addition, America Online announced expanded relationships with key content partners; including ABC News, ABC Sports, CBS SportsLine and the Cartoon Network.
* Just a year and a half after launching its first international service, America Online has surpassed the 750,000 subscriber mark outside of the United States. AOL Europe has more than 600,000 members, while AOL Canada has become the largest Internet online service in Canada with over 100,000 members and AOL Japan, launched in April '97, is doing well in its infancy. By expanding its market reach and tapping into the global market, AOL's growth potential has increased dramatically.
* AOL has improved both its reliability and availability, cutting scheduled and unscheduled downtime by more than two-thirds over the prior year. Despite the misgivings regarding AOL's reliability at the beginning of the year, 4Q'97 demonstrate increased usage and the best member retention in two years. On June 30th, AOL had approximately 350,000 modems, a 75% climb since last January. In addition, AOL said that they will add 20-25,000 modems monthly through the end of the calendar year.
* Cost of goods sold, marketing, and overhead costs were slightly below analysts estimates, demonstrating the strength of the brand and the viability of the business model. Gross margins declined to 38.1% in Q4 from 36.8% in Q3. AOL continues to build out its network.
* Also, customer calls to the service center were down to 9 million in the quarter, from 15 million per month in the March quarter. Average hold times in the June quarter were only 1 minute, down from a December peak of 8.8 minutes.
* Usage hours increased to 154 million hours per month during the quarter.
* Average costs per hour decreased a bit in the quarter due to a higher percentage of traffic going through AOLNet, about 86% of traffic during the quarter, up from 83% in March.
* Pure Internet usage declined to about 11% of total usage down from about 20% at the peak. AOL Content Channels viewership increased substantially to 30%. Other categories include Chat at 24%, email at 23%, and Main Screen/Other at 15%.
Hmm..that's enough for now. Happy trading everyone.
S. |
