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Technology Stocks : America On-Line: will it survive ...?
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To: John Howell who wrote (1839)2/24/1997 10:16:00 PM
From: Brian K Crawford   of 13594
 
<<Would still appreciate your comments on a business model that will allow AOL to turn a profit.>>

Sorry. Did not realize I had a challenge put to me that was outstanding.

Short and sweet:

1. Cut marketing expenses back to 15-20% of revenues
2. Hold access pricing where it is today...ie $19.95 with lower rates for 1 and 2 year commitments.
3. Keep working the ad and transactions side. This was $2.00 per member in the latest qtr, up from $1.35 the prior qtr. Think this is easily at $10.00 per member annual rate in current fiscal year, and growing over 100% annually.

That's it for current business model.

For a little blue sky, add the following:
1. Work on rolling out premium services (gaming, probably) that are based on very modest timed charges, over and above the base charge.

From the Q2 conference call write-up on the Motley Fool:

<<AOL STUDIOS. AOL Studios and its operating units Greenhouse, Digital Cities, and Imagination Network manages more than 50 original programming titles, properties, and channels that have all seen their AOL usage soar as a result of their move to flat-rate pricing. >>

<< Imagination Network is about to premiere CyberPark, a 3D community with interactive games, entertainment, and social activities. CyberPark will be carried on AOL networks and other ISP partners they will announce later. That will give CyberPark the broadest Internet online distribution of any multi-player game and entertainment platform.>>

Brian
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