Chuzz, you forget that AOL will have other profits beyond subscriber dues. AOL is an electronic shopping mall, a utility company, and a tv-like media network.
In the mall, you will have stores ranging from Fidelity Brokerage, to Hollywood at Home to Macy's to Victoria's secret to Wal Mart and maybe even Home Depot. You will have a health care center for vitamins and prescriptions and a doctor on call on line. You can order a pizza
One day you will order a movie from your storage of titles in your internet file and download it onto your PC then burn it onto your own DVD obviating the need to go to a store.
Like a shopping center mall, AOL will charge rent for its space and charge a fee on transactions conducted in the mall. (5% of profits?)
As a utility company, like telephones, AOL can charge a fee for using its on line chat rooms, a modest long distance charge.
As a Tv like media company, there is of course advertising. Proctor and Gamble is the first major big company to sign such a contract.
So there are other sources of income beside AOL's subscriber base.
Also, AOL recently contracted to do all of Latin America on Line and there is Europe waiting as has been pointed out.
And then there is steve case and his new pal, Mcnealy of Sun. It would be hard to find two more savvy CEOs to navigate this new terrain.
If internet usage doubles every 100 days...
If Java become the "dial tone" for the Web so the interne appliance with a simple non-Windows Operating System is ubiquitous...
Do you still think AOL is insanely valued. This is just off the top of my head. With some research, one can discover many other possibilities fr revenue
jhg |
