Frank,
...sticky portal. Imo, aol is very sticky, and I know from personal experience that users find it near impossible to change from the aol gui.
Good point. One issue the book fails to discuss (I think) is the consumer market in which people's emotion and time can be factors equated with the high cost of switching. There may not be a dollar cost of switching, but there may be equally strong preventative issues that are just as important.
For me, the important issue is that we, as investors, address the gorilla-like characteristics of any company and appreciate them for what they are worth. A brand name is another characteristic that is comparable to a high cost of switching because switching to a different brand might be considered risky to the consumer. As an example, you might have confidence in the brand name of the shiniest, most durable, longest lasting lunch pail with cartoons on the side that never fade or come off. That being the case, you probably will insist that your wife get you that PERFECT lunch pail, not one with a different brand.
My long-winded point is that it's less important to be confident we are using the exactly appropriate category of Gorilla or King, especially when examining companies selling consumer products, than it is to recognize a company's inherent strengths.
--Mike Buckley |
