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Technology Stocks : America On-Line (AOL)
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To: robert duke who wrote (5148)2/16/1999 10:26:00 PM
From: RTev  Read Replies (2) of 41369
 
About AOL-ATHM:

Another point is this: It just isn't a good fit. ATHM isn't worth much without the "last mile". It needs to have the wire into the house and the cable modem. AT&T, when it swallows TCI, will be the country's biggest cable supplier. They already have co-marketing agreements now with the other biggie, Time-Warner (which uses its own ATHM competitor). ATHM has separate agreements with several other major cable companies. ATHM without the cable companies isn't worth what they've invested in it so far.

And the other point: Do you really want to see the bottom line of AOL drained for years and years by the massive capital cost of building itself into a utility company? To keep its current subscriber model alive with broadband, it would have to make massive changes in its private network. I'm not even sure that part of it is IP-based even now. What's going to happen to that network if it has to serve two-way connections back and forth from their servers in Virginia to the west coast when each of those connections is live all day long at a minimum speed of 256K compared to the current maximum of 56K?

AOL just is not a technology company and it isn't a good fit to try to throw technology-dominant companies like ATHM (or, especially, RNWK) into the mix of what is an impressive media and marketing company.
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