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Technology Stocks : America On-Line (AOL)
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To: Dr. D who wrote (3936)1/29/1999 7:50:00 AM
From: RocketMan  Read Replies (1) of 41369
 
This was expected. The cablecos will go to any length to remain second- and third-tier players. Rather than open their access and make a bundle selling their services to companies such as AOL with 17M users and 50+M eyeballs, they would rather try to grow their own portals, such as ATHM. They claim this helps them to justify the large investment needed to grow and upgrade their cable services. Problem is that ATHM currently only has 350,000 subscribers, and their penetration rate is only 5% of existing cable customers. Furthermore, their own growth projections place them at something like 10M or so users by 2002, about half of what AOL has today. So they are rolling the dice and figuring they can compete with AOL, Yahoo, and all the other telephone-oriented portals while giving the competition a 2+ year lead on getting more subscribers, providing bandwidth through DSL and satellite, and perhaps striking relationships with individual cable networks. Don't forget RoadRunner is out there, and could be bought for the right price. And didn't AOL just cash out their Excite position?

But it is little wonder. Cable has been overpromising and underdelivering for the last quarter century. At one time they were supposed to put the broadcast networks out of business. The only reason they have been as successful as they have in getting into the internet is because the phone companies have been even more incompetent. But the phone companies lately seem to be waking up at a faster rate than the cable companies.
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