Barry,
I see you as conservative - not flippant. Having a person (such
as you) that provides some caution to threads, such as this, is
very usefull. Your comments have not taken the path of being
abusive, as some folks on other threads have.
Given your caution and some of the questions you have asked, last
week, when AOL was about $42.00, I put a stop loss in at $38.50.
Well you know what happened last Friday......I got moved out and
the stock recovered. Well, today I was able to get back in at
an even lower price. A little $$ in the pocket -- not much -- but
some and I also have the shares. I think without your caution, I
would still be holding my original shares and wouldn't have the
$$ in my pocket.
Now, to your questions:
Advertising -- important! I don't have the reference to cite (except
that it came from my broker) -- A large telecom company has placed
$10,000,000 into advertising on AOL. In the US a baby is born every
9 seconds - in November, a new subscriber joined AOL every 7 seconds.
Advertising is the process of getting information in front of
people. Well OK, I guess it is a bit more than that. But, in
general --- There are over 7,000,000 subscribers to AOL. Sure,
some of the subscribers will migrate to other ISPs over time for
one reason or another. But, I think that the rate of people that
join will out number the ones that leave by a reasonable number.
Let's say that the number stays at a constant of about 8,000,000
(the number that leave == the number that join). New members will
see the advertising at a nice rate. AOL has the name. AOL is
very easy to use. AOL is everywhere.
Infrastructure -- AOL is established. Sure, they need to add
equipment - but they have a solid base to work from.
I think the drop in AOL price today was related more to the AT&T
announcements to be made tomorrow than to the NSCP -- Baby Bell
agreement. AOL is not a browser supplier -- NSCP is not an ISP.
AOL currently provides bundled information in a consistant manner
regardless of where you are in the US. The baby bells are
regional. There are currently 7 RBOCs (soon to be 5). A company
would need to contract with each of them to reach their customers.
The RBOCs are new to the internet service. AOL is one of the
longest term providers. Tomorrow AT&T is going to announce price
reductions (according to the press releases today) for their
internet service. I think that could push AOL down a bit more.
If so, I'll be in the buying mood (at around $32-$33).
al |
