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Technology Stocks : America On-Line: will it survive ...?
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To: The Duke who wrote (4759)9/10/1997 12:39:00 PM
From: Thomas C. Donald   of 13594
 
Duke: When the CSRV/WCOM deal closes, AOL will be simply a re-seller of internet access services (with some attractive content for value-added), probably only breaking even and possibly losing a little money on each reported subscriber (net of its advertising sales). To justify its current market cap, AOL should earn at least $4 per month per subscriber on its advertising sales. I, too, am very interested in the feasibility of the models for this end of the business. Is it possible for AOL to sell four dollars of advertising per subscriber per month? If it is, then all AOL had to do is build its subscriber base to build its stock value. Do you or anyone else here have any financial details on this advertising end of the business? What are the advertising revenues per subscriber per month for other online/internet companies in the content business (such as search services and news services, etc.)?
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