America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: charlie who wrote (6592)	12/28/1997 9:39:00 PM
From: Steve Robinett	Read Replies (1) of 13594

Charlie, My numbers for the effectiveness of this sort of shotgun advertising in newspapers--2%--was just a guess, and probably a generous one. Since AOL gets about $17.37/subscriber as an ISP (about $208/year), your $1000/subscriber valuation by the street must assume customers hang around for 5 years, about 4 years if you include "Other Revenue". Do they? I have no idea. AOL may not know either. On the effectiveness of online advertising, a topic that comes up on this thread frequently, there is a theory that magazine advertising has about 2 seconds--the amount of time it take to browse and turn a magazine page--to make an impression and after four or five of these impressions, the product name begins to stick whether or not the person actually read the ad. Something like the same theory probably applies to web advertising. On some level, we're sort of aware of it. If we actually click, that's a bonus. Best, Steve

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