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Technology Stocks : America On-Line (AOL)
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To: xfiles who wrote (13432)4/27/1999 6:46:00 PM
From: Alok Sinha  Read Replies (3) of 41369
 
Can somebody help figure out the revenue math for me.

If AOL has 19 million subscribers who pay on average 19.99 per month, the quarterly revenues from subscribers alone should be 1.1 Billion +.
Excluding Netscape if the rev fig. is 1.1 B and the advertising rev is 275 MM; then one of two possible conclusions can be reached:

(i) a significant number of subcribers are not the paying kind (maybe more than 15%)

(ii) A substantial number of subscribers pay less than the 19.99 monthly rate (concessions for low usage , etc.)

In any case it is clear that subsrcibers are a low margin business, and you can't cross-sell much to them. The startegy to acquire Netscape seems like it was a smart move.

My guess is stock heads back to the 130s in the near term. Long term who knows.

Alok
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