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Technology Stocks : AMERica on-Line, Another over valued company?
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To: Ed Zhao who wrote (13)3/1/1996 11:54:00 AM
From: Scott Maxwell   of 222
 
The question is really whether their investment in subscribers and
POPs is going to return more revenue than it costs, in a time frame
faster than they have assumed in their financials. If it does, all
will be well so long as the subscriber base grows rapidly. IMHO
much of their revenues are derived from the junkies who spend a lot
of time in their social spaces; when similar and cheaper spaces are
readily available, the mass of people can suddenly shift away, and
AOL will have much less to offer.

This space is an example -- the Motley Fool crew is interesting,
but the people here are definitely more knowledgable about tech
stocks. I no longer bother with AOL since I have found better,
cheaper services on the Internet -- how long will it take the
other AOL customers to notice this? And when the best AOL customers
have left, it degrades the quality of the community there, so more
leave... etc.

The only hope I see for AOL is to hook up with another monopoly-
minded telecomm to provide it as the standard consumer service
rather than WWW. This appears increasingly unlikely, especially
since the ATT announcement. If it becomes clear that much of its
investment has to be written down, the big losses will hammer the
stock -- sure it's good that they're losing the proceeds of equity
sales rather than debt, but that doesn't mean they won't go into
a death spiral and be forced to acknowledge their decline in assets.
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