America On-Line (AOL) Message Board

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Technology Stocks : America On-Line (AOL)

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To: Jorge who wrote (4404)	2/5/1999 9:16:00 AM
From: Steve Robinett	of 41369

Jorge, Re: free AOL The last time I figured it out (about 6 months ago), it cost AOL about $17.36/customer/month to provide internet service. That's why they had to bump prices to $21.95/mo. The AOL business model is still to let the subscriber fees pay the bills and let other income (advertising, partnering, etc) provide the margins. Other income in the most recent quarter accounted for a little over 18% of total revenues, up from the previous 16.5% but still nowhere near enough to provide free service. If AOL actually went to free service, the stock would tank worse than it ever did after the flat rate move a couple of years ago. Best, --Steve

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