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Technology Stocks : America On-Line: will it survive ...?
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To: Steve Robinett who wrote (5989)11/16/1997 8:11:00 PM
From: PAL  Read Replies (1) of 13594
 
Steve, with the "less aggressive marketing", the growth of AOL membership will slow down as well. AOL has always included the free trial membership as subsriber. The new approach will have less growth in the numbers. This coupled with commercial ad-revenues down by 15%, how can AOL justify a PE of around 150? There is no way AOL's earnings can grow by 150% annually. To make profit AOL has to continually reduce costs as it has started to cut marketing expenses. Another possibilty is to cut personnel costs. Whenever layoffs are announced, watch out. Let us wait what Steve Case will way on Monday's CNBC.

Good Luck.

PAL
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