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Technology Stocks : America On-Line (AOL)
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To: Steve Robinett who wrote (5314)2/20/1999 6:55:00 PM
From: RTev   of 41369
 
I'm still not sure exactly how AOL fits into the slowly-coming broadband universe, so I'd love to hear comments on that. Does AOL need to do something big like a merger to fit into this possible future? Or does the current business model allow AOL to gracefully slide into it?

It seems to me that the problem with answering that is that AOL has wisely decided to hedge its bets by becoming several different things at once. Among them:

     OLS -- Online service provider. This is where the 16 million subscribers come in. They use proprietary software to dial into modems owned or leased by AOL which then connect to a proprietary network which gives them proprietary content (using proprietary protocols). There were a dozen or more of them in the 80s but AOL is just about the only OLS left.
     ISP -- Internet service provider. In addition to the OLS stream, AOL gives each user a temporary IP address that allows the user to get onto the internet using any IP tools available (but with preference given to AOL-supplied tools). There are hundreds of competitors in this market.
     ICP -- Internet content provider. Anyone with access to the internet and with the proper IP tools (which are usually supplied as a standard part of current computer setups) can access and interact with content provided by an ICP. AOL has a strong presence in this market with the soon-to-be-acquired Netcenter, with ICQ, DigitalCity, aol.com, and through cross-agreements with other ICPs. There are thousands of competitors in this market.

Does AOL need to maintain all those parts to be successful in the future?
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