I agree that it is tough for ELNK to survive and prosper. With current PSR = 5 price I will definitely wait at sideline. Any one know cash situation for ELNK? current ratio?
However I do believe Business model like ELNK or MSN has a better chance than AOL. Two reasons:
(1) ELNK or MSN lease physical network mainly, so they are less capital intensive, more growth potential, they can build Physical network where it is needed, and lease whenever possible, so more cost-efficient.
(2) ELNK and MSN now use INTERNET-standard techniques, while AOL has its own network technigue which is not very compatible with INTERNET. You are wrong if you think AOL is internet. Web content has way more larger content and faster growth. Even MSN changed mind to endorse open internet standard from a proprietary network like AOL.
The second point is very important because AOL simply can not buy a local ISP and put it into part of AOL. All the local ISP use internet standard so they have different software at several layers, and maybe at physical layers level. It is very costly for AOL build and maintain their own network. It is even more costly for AOL to be compatible with internet with all kinds of applications. Market leader is internet, not AOL network.
It is "content, and software application" that counts: for example, I am GO/chess player, I saw all questions like "how can I play Go/chess in the IGS(international go server) with AOL account?" My answer is "drop AOL account, get a real internet account". No doubt , I am sure AOL user can use a special software to play GO or chess in internet, but at what cost? who will program it? You are absolute wrong if you think internet is only web page content.
I do not know whether AOL users can play realaudio, Xing streamworks, or internet phone. For sure, internet programmers will program first for internet, and then consider AOL later. AOL has its own nitch, which can be successful by its own merit, but I just do not see AOL can keep up with MSN, ELNK, or MSPG in terms of cost, content/application, and service. I do not believe $20 unlimited of AOL will work when Netcom failed.
I forsee in the future MSPG, ELNK, MSN great potential when speed goes to 56k, or 128k ISDN with explosive more killer applications coming out. Great business future for ELNK! |
