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Technology Stocks : AMERica on-Line, Another over valued company?

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To: Russell who wrote (9)2/29/1996 11:31:00 AM
From: Scott Maxwell   of 222
 
AOL *does* capitalize subscriber-acquisition costs, more so than
any other provider, although NETC et. al. also do so to a lesser
extent. Good accounting practice attempts to divide such costs
according to a conservative estimate of the expected future revenue
from each customer; AOL's estimates are far from conservative, and
no one knows how many "free trial" customers are included in their
subscriber numbers. It *is* a time bomb waiting to go off, like any
Ponzi scheme, and would only succeed if they grew rapidly until
profit margins rose.
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