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

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To: Andrew Shih who wrote (7474)2/10/1998 8:00:00 PM
From: craig crawford  Read Replies (2) of 13594
 
<<< There are two fundamental problems to look out for in AOL's future:

1) Heightened increase in competition
2) Increase in average usage. >>>
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1) Competition is a fact of life in all businesses. AOL seems to be doing fine with all the competition now so why should that change?

2) Increase in average usage just means that AOL will be getting all that much more revenues from advertising.

<< 1) While there is currently no competitive service for new users, AOL is probably one of the worst ISP as far as connections and quality of service >>
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I have used several different ISP's. AOL at present is just as fast if not quicker than lot's of other ISP's. I rarely ever lose my connection to AOL. At other ISP's I have used I lost the connection a lot and had to dial back in.

<< Cable modems and xDSL will begin to emerge and become the connections of choice. Thus, the Baby Bells and cable companies are going to become the ISPs of note. >>
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Not exactly. Phone companies will need to have equipment to run DSL but they can still farm out the rest to an ISP like AOL. They don't have to become an ISP. AOL will probably strike up many deals to do DSL.

<< Is $19.95 even a profitable price point? >>
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AOL earned 17 cents this quarter didn't they? The rates haven't been raised yet so I assume they did it with $19.95 rates.

<< When cable modems and ADSL is common, and video/audio is broadcast
over the Internet, who is going to stay with a 56K connection? >>
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You think AOL is going to lose it's position in the industry just because new transmission techniques are utilized?
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