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: Steve Robinett who wrote (7856)	2/14/1998 10:05:00 PM
From: Pancho Villa	Read Replies (1) of 13594

>>Assuming for the moment the $21.95/mo rate doesn't stick--that is, AOL learns the meaning of elasticity of demand--how will AOL roll back prices? << IMO whatever they do they will be screwed. their announcement was a huge mistake that will result in a no win situation. If they raise rates they will lose people. If they don't their margins will be pretty bad particularly if a revenue game with pre-paid advertising was played last quarter. They have let the community know the 19.95 rate does not work for them they are the high cost provider. If they go back to it the y will suffer. Actually for market share the right move would be to go back but who wants 100% share of an extremely low margin business with no significant barriers to entry. Pancho

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