If the market ever had a meltdown, I would bet that MSFT will do better than AOL.
Yes, indeed. But still, I wish I had a few shares of AOL right now -- future be damned.
My prediction for one year from now (after a general market "correction"): MSFT 140-180; AOL 85-95. My view of MSFT is that it will have to climb out of a hole after the resolution of the DOJ suit (whatever form that resolution takes), but will do so rapidly and confidently after investors realize the extraordinary money-making potential of the company even if its focus must shift a bit away from the consumer desktop goldmine.
I figure AOL will start to face a rough road in Sept. to Dec. time frame. Problems:
-- Since they're spending very little on Y2K testing, I'm guessing that they'll run into unanticipated problems with their 80s-era system. They'll probably be small, but a press corps hungry for something to go wrong will pounce on the glitches.
-- By then, the sheer mass of users will slow the growth rate of subscribers. As analysts look at even the rosy numbers released by AOL, they'll notice that the company is standing still, with a low rate of retention among users.
-- Broadband will be exploding by then with telco rollouts of DSL and rapid deployment of cable modems. News stories will explain the benefits and explain how users can hook into the fast wires. AOL will barely be mentioned. A couple of the DSL agreements they've signed will fall apart as telcos realize they don't need to give sweetheart deals to AOL. Even AOL's in-your-face GUI will be ridiculed as something that just doesn't fit with the new always-on broadband internet era.
-- Their portal sites will still be #1, but the percentages will drop as Microsoft, Yahoo, Go, Snap, Excite, and Amazon's new [this is pure assumption, folks] portal rapidly gain on their sites.
But then again, I could be completely wrong and if I had a few more spare dollars would buy some AOL today even at these prices since none of those horrors has happened yet (and even though I despise the company but like the stock). |
