No I did not. In my simple arithmetic exercise I doubled revenues per subscriber to count for increased "other" revenues.
Only doubled? You've got to be kidding. On-line shopping alone is expected to triple by 2002. Take a look at the graphs in
forrester.com
And that is a conservative estimate. Take a look at this estimate:
* Earlier this year, eMarketer's "1998 eCommerce Report" stated that consumers will buy 14 times more goods and services via the World Wide Web in 2002 than they did last year. eMarketer's report also said that consumers will spend $26 billion in
purchases on the Web by 2002. Consumer-based e-commerce revenues totaled $1.8 billion in 1996. Such revenues will reach the $26 billion mark in 2002 because of improved technology, security, user-friendly Web sites and increased worldwide penetration of PCs and modems,eMarketer said.
Business to business e-commerce will account for the majority of
Web-based revenues through 2002, which is estimated to be at $268 billion. By comparison, business-to-business e-commerce totaled $5.6 billion in 1997 and $16 billion in 1998.
That projection is for an increase of 14 times by 2002. Now, sub revenue right now is around $20 per month. And that is just ecommerece. What about value added services, broadband, internet telephony, etc etc.
How much of this can AOL get? I have no idea, but I'm pretty sure it will be a major chunk, and much more than $40 per month per current sub (as your doubling reflects)
As to international growth - Do you mean Canada and Mexico?
I mean the entire world. Right now AOL is in Japan, Germany, and has an initiative into South America. It's a big world out there.
>>But if you want to value AOL strictly on U.S. subscriber revenue, you are right.
I challenge you to find in any of the most bullish analysts' recommendations a future, even far future, EBITDA number greater then $10B.
If I based my investments on what analysts predicted, I would be broke. Tell me one analyst who predicted today's AOL market cap four or five years ago.
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