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Technology Stocks : America On-Line: will it survive ...?
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To: cody andre who wrote ()8/12/1996 11:38:00 PM
From: Stratajema   of 13594
 
A Classic Industry Market Shift

After using a PC in the workplace for over 10 years, I finally decided
it was time to buy one for home use last month. With my brand new 33.6 BPS modem I couldn't wait to get online to anywhere! I evaluated AOL, Compuserve and my local ISPs. Without hesitation I chose a local ISP offering 150 hours/month for $11.95/month with consistent 28.8 BPS access. I found AOL to be very overpriced, essentially offering the same information that is available on the WWW. Don't you think other rational consumers will sooner or later arrive at the same conclusion? If not by themselves then when their friends (i.e. peers, the 'Joneses' ) tell (i.e. influence) them about the better choice of choosing an ISP over AOL?

Remember some time ago when not one but thousands of PC manufacturers nibbled away at IBM's PC market share? Big companies like AOL can fight against two or three major competitors but not thousands of different competitors (i.e. ISPs) that have the swiftness to implement changes and maintain low overhead.

AOL is caught up in a classical industry market shift much like the Mainframe / PC market shift of years past. Like mainframes, AOL will not go away but their role will need to be different. For anyone who doubts that an industry market shift is underway in the online industry, ask yourself where is most of the new development taking place, AOL or the WWW?

Classic business cases teach that victims of the market shift such as AOL almost always post record sales and earnings before their turn of fortune occurs. If one even has to ask the question of whether AOL will survive then perhaps the threat is real.
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