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Technology Stocks : AOL, now I get it
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To: yard_man who wrote (216)12/16/1996 3:46:00 PM
From: Art Stone   of 496
 
<< According to 10-Q advertising accounts for less than 11% of revenues:

Other revenues are generated primarily from the sale of merchandise, data network services, transaction fees and advertising. The growth of other revenues is important to the Company's business objectives. In the first quarter of fiscal 1997, other revenues represented approximately 11% of total revenues. >>

It is really dangerous to read AOL's SEC fillings and public statements without the full context. AOL is very skilled at lumping together unrelated data to obfuscate their situation. AOL, for instance, started lumping European customers into its subscriber counts, although it is operated through a joint venture, in which AOL is only a part-owner. AOL also blended together GNN and the European numbers so that you can't tell where the growth (if any) is.

In this example, AOL purchased ANS (http://www.ans.net/) in 1995. A substantial portion of the 11% of "other" (non-subscriber) revenue is coming from ANS's operations, which are related to providing Intranet connectivity to business customers and the government - not from advertising..

Has anyone considered why AOL had to contract out $340 million in AOLNet expansion to a competitor when AOL had its own inhouse data networking subsidiary?
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