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Technology Stocks : AMERica on-Line, Another over valued company?
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To: Jingsheng Sun who wrote (205)8/11/1996 11:58:00 AM
From: Art Stone   of 222
 
<< $240 per new user, that's wrong. AOL added 700,000 - 800,000 new users last Q. The average marketing cost is 100M per Q (last two Qs), which gives $130 per new user. The $240 per new user must come from the same analyst who downgraded AOL three months ago based on 300,000 net user increase per Q. >>

Could the source of this discrepancy be that AOL has suddenly started reporting membership "worldwide"? In AOL's press release, they indicate that 400,000 of the 6.2 million alledged members is in GNN and the European Joint Ventures. Up until the last quarter, AOL reported only its own membership, not those of its joint ventures. But AOL -needed- to be able to say they reached 6 million and were still growing. People buy AOL because of growth, not because of actual earnings or hard assets.

Steve Case's own statement is that he expects to add only a couple hundred thousand new members in the July-Sept quarter - yet predicts by the end of the fiscal year (June 97) AOL will have 10 million members. That's pretty darn optomistic. However, the same press release carries the "safe harbor" legal language with protects the management of companies from stockholder lawsuits if their predictions don't come true. Go figure.
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