Actually, I DID get five bucks on my first attempt at this!
Infrastructure is called "barrier to entry"...something you need to keep out competition. Like Intel has. Like AOL doesn't have.
Sears was bid up to fantastic levels because of the Sears Catalog, that brought the convenience of home shopping to every tiny frontier town. Honestly, I don't see any difference between the hardcover and catalog versions of catalog merchandising..except it's theoretically easier for me to find the cheapest price on the internet. This is called "deflation"...it means that severe price wars will eat up profit margins and drive prices down. It means that stock prices will go down, not up.
Content and advertising revenue is a business expense, not a profit.
The big difference between AOL and a utility is money derived from advertising revenue (like the Yellow Pages). The big IF: if companies find the cost of the internet maintenance and advertising cost doesn't give an adequate return on investment in an era of deflationary pricing, they won't pay the advertising costs or go to a cheaper competitor.
Conversely, the utilities are getting into the internet business..
If you got free ISP with your utility bill, would you switch?
I think the biggest sales pitch AOL (or Yahoo, for that matter) is its addictive quality. I need to see more studies here, but it looks like an increasing number of people are literally addicted to the internet sites..just like Ko or Mo, there's a certain set of the population who are addicted for life and form a repeat audience. The stock market, as a form of gambling, feeds a lot of the addictive qualities..it's also leading to a level of bankruptcies without equal in US history.
These are interesting times we live in. |
