. . .growing membership, brand awareness, usage, and revenue, while others competing
directly with them have done poorly. Investors have recognized this and rewarded
the company for it, on par with how this industry seems to reward its perceived
front runners
****
nothing personal, but you couldn't be more wrong again. Investors don't give a shit about membership, brand awareness, usage, or revenue--investors care about one things which is profit. All this other stuff is only has good as long as it leads to profit (and it usually does, except in AOL's case, at least so far). The bottom line is that individual investors now believe one of two things 1) AOL is going to make a lot of money sometime in the reasonably near future, or 2) there are enough other people who think AOL is going to make money that I think the stock price will go up so I'll buy even it I think the company sucks (the bigger idiot game). Wait, I guess there is a third option--maybe everybody thinks everybody else thinks the company is going to make money so everyone buys and before you know it we have an investment bubble. We can argue about exactly which scenario is the most true--in all likelihood all three probably are, but the point is that all of this is going to end in a bad way for AOL investors unless AOL actually makes some money. Just curious, how many more quarters can AOL disappoint investors before they start looking like Netscape? I'm betting that they've got another 2 or 3 quarters at most. . . |
