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Technology Stocks : America On-Line: will it survive ...?
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To: Dick White who wrote (691)11/24/1996 11:40:00 AM
From: Todd Daniels   of 13594
 
>Outspending, Creating Content,Software & On Ramp
>IMHO AOL's content is the winner.
>Mama told me to always get a full box of chocolates not
>a partial box.

Yeah, but if the seller can't make money on it at the price
charged...........

AOL's made clear that going forward, profit is to come
from advertising and merchandising. So, a bet on AOL is
a bet that AOL can do what no one else among the multitudes
trying (including major media outfits0 have yet done.

Further, AOL's made clear that it will have to create `new,
compelling content' to attract and retain eyeballs and advertisers. IOW, a bet on AOL also is a bet that it can come up with more killer content than any single cable outfit ever did. IOW that Leonsis and Pittman will on the net exceed Ted Turner's achievements in cable
and William Paley's in broadcasting.

It boils down to new media R&D. If I want to speculate on that
in the public market I'll buy MSFT. At least they can afford it.

(In fact MSFT charges MSN losses as R&D, so it doesn't hit
earnings that badly. Maybe the practice is as arguable as was
AOL's deferral of marketing expense, but nobody's gonna go
after MSFT over accounting for a `lousy' $300m a year.
OTHO, imagine if AOL tried to charge content development as
R&D!!!)
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