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Technology Stocks : America On-Line: will it survive ...?
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To: Joel Sternberg who wrote (1085)1/16/1997 11:11:00 PM
From: Brian K Crawford   of 13594
 
Access costs:

From 1/13/97 report by Robertson Stephens:

<<GROSS MARGINS: While we understand investor attention to the cost of increased usage, we believe gross margins are under control. The key thing to remember is that the bulk of cost of goods sold are fixed costs associated with running the network, customer service, etc. We estimate variable costs are between 15% and 20% and are primarily comprised of telephone costs. We estimate incremental costs of telephone usage are approximately $0.25 per hour, which is essentially comprised of incremental leasing costs for new modems, servers, and telephone lines. >>

Saw in the 8 mill users announcement that 1.2 mill users were added in 4th quarter, 500,000 in December alone.

Brian
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