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: Dell-icious who wrote (10831)	7/30/1998 12:20:00 PM
From: M.J.	Read Replies (1) of 13594

<<Earnings don't matter. The value of AOL depends on number of members, member growth, member retention and revenues>> Earnings always matter. In young, developing companies, people use measures like that because the company is not expected to make a profit yet. I think AOL is a mature company and its time to look at actual earnings. Their 3% profit margin doesn't impress me especially in light of the fact that their accounting practices have been questioned so much. I don't what a conservative accountant might put them at (-3%?). So what the bulls here are saying is, "Hey I know they aren't making money now, but they'll make it up in volume!". Maybe this just isn't a very profitable industry. Why do you think AOL says they don't want to be in the ISP business anymore? In any other business model, they have no track record. Show me any mature company historically that has been able to support a P/E like this for an extended period. How many more members can they expect to gain anyway?

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