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Technology Stocks : America On-Line: will it survive ...?
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To: yard_man who wrote (9209)4/1/1998 11:59:00 PM
From: Tim Kenney  Read Replies (2) of 13594
 
>Buyers have taken the news of price increases from other ISPs as bullish for AOL. Clearly, it is not.<

Please explain. If others do not compete with AOL on price and most users are too stupid to know how bad AOL is, won't more people be attracted to AOL? This allows AOL to gain even greater critical mass which generates more advertizing revenue and eventually enables them UNDERPRICE the competitors and gain a quasi-monopoly. I do not see how competitors raising prices does anything for them. If the smartest move ATT can think of is to raise prices, they ought to just close shop on the ISP business. If they want the business, they ought to make short-term monetary sacrifices to attract business. Once users are used to their service, then ATT can stick them with higher prices. I can only see price increases in this atmosphere as a way of marginalizing ATT as a player.
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