It is logical to assume AOL will go DSL, since they already made a mistake buying NSCP.
Although I never understood NSCP's allure, I am not ready to concede the purchase is a mistake. AOL has great penetration of the home consumer market, so would it have been wiser for them to expand/fortify this with broadband at this point, or to try to enter the business market with NSCP/SUNW? But I agree that the NSCP deal does point to their going DSL.
That's what unearned success and the resulting arrogance does to you, blinds you so you make bad decisions. The end is near when the institutions have to buy you because they need another reason to under perform the SP500.
Well, Dell has done pretty well on the S&P. And unearned success and arrogance has not kept MSFT down. It does seem that every time AOL's end has been predicted over the last five years it comes back stronger than ever, strong enough for another stock split. And the reasons for counting AOL dead have always been good, even great. MSN, unlimited usage, busy signals, low BTEs, etc. This is but the latest, so I am looking for another split soon. AOL is not called the cockroach of cyberspace for nothing.
The difference in the phase of company evolution as represented in price is strongly indicated when ATHM and AOL are contrasted. It's a matter of early versus late.
More like premature versus young adulthood, IMO. ATHM is like a Corvette forced to drive in a 55MPH zone. ATHM can not grow its subscriber base faster than the growth of cable subscribers. The projections I have seen are for 1M cable internet customers by the end of 99, as contrasted with 14M AOL subscribers today. And that 14M does not even count the victims of their latest carpet bombing of AOL discs nor the hordes who will be looking for a mate after seeing You've Got Mail. Even by 2004, there are expected to be only around 25M +/- broadband users, as contrasted with many times that narrow band users. And that is just US. Furthermore, AOL can go after global users with existing infrastructure, which can not be said of ATHM. And even if ATHM wins the last mile, don't forget backbone bottlenecks. Having said that, I still like ATHM's BTE and think it will grow nicely until the gummint figures out they have an unfair advantage.
Breaking out of a base versus breaking into a base. AOL is breaking into a base, an upside down base, a general topping structure.
This is true. I expect AOL to churn for a while, even fill in a lot of unfilled gaps. At least I hope it does. However, I suspect it will act like an internut for a while.
Nonetheless, this top in 5 years will also be seen to be only a correction in the long term. However, you will have wished you had sold just like it was ok to sell IBM in 1987.
I don't think you can compare the two. I think MSFT in 86 is a better comparison, due to the expanding market. IBM in 87 was playing in a mature, shifting market that was moving out of mainframes and into minis and distributed systems.
My every trade analysis has not given a sell signal in AOL. It is just my guess that they don't have much upside potential.
My gut tells me the same thing, but it's hard to stand in front of the momentum train. When the entire sector is insane, AOL looks like General Motors. But I have to say that when I look at AOL's one year chart it scares the heck out of me. Then I have to sit and foget rationality, and I feel better.
I'd like to say that MSFT wasn't anything like the government has portrayed them. The trial is a complete dishonorable sham perpetrated by the resurgence and glorification of populism and latent socialism in this country.
Mmm... I think MSFT is every bit as the government portrayed them, and if it were not for the latent (I always thought it was creeping) socialism I would have all my marbles in MSFT.
MSFT in reaction to the absurdity of government's complicity in the conspiracy to destroy the spirit of the power of determined competition, has now started to become the very thing government claims.
I don't think they had to change much to become what the government claims. It was Gates who told Case in 92, "I can buy 20% of you, all of you, or go into the same business and shut you down."
The motivation is pure, undiluted anger. Justified or not it has the power to destroy the company that wrote the book on high tech competition, saved every aspect of it, and even though they've driven us all crazy, also have enabled most of the technological revolution going on today. Not one of established old guard would have hatched the PC.
Ahh.... have you forgotten Xerox? The Mac? Any number of innovations that were stifled by fair and unfair market forces? Microsoft, like Coke, didn't win the taste test, they just won.
Well, enough for now. Interesting ideas.... If I had to predict, I would predict that all of our predictions will be wrong, but in five years it will not matter. We will all have been handsomely rewarded. |
