The market looks beyond reality, it judges AOL on perception.
We all know CABLE modem will not be a threat to AOL in
3-5 years, not even the DSL, because most consumers
are not willing to go that far due to cost.
An average family concerns more about their monthly expense on
items other than internet because Internet is not like
bread and milk, you can still live without it.
But the market thinks AOL should be in broadband now and
the market decides AOL's price based on its 'now' perception not
the reality.
Steve Case and Pittman wasn't that worry about the broadband issue
during January 1999 conference call but they show they are
concerned now, why? The market tells them that they better
act on it now disregard what AOL thinks.
With any relation with MediaOne going forward will help AOL's
perception, it tells the market that AOL is serious about
what the market concerns, AOL can then focus on reality, the
business.
Steve Case and Pittman are market sensitive, they 'heard' what
the market asks for, that is why they express their interest in
this MediaOne issue.
Just waiting for Federal to help is not fast enough for the
market.
'Why buying the building if you only have to access the elevator?'
because you can't get inside the door! Because the ticket to
get into the building is more expensive than buying the building
in the long run! This is the same reason why most people
buy car not leasing one if you plan to drive it for 10 years.
It may cost AOL some stocks but AOL share price will get a big boost
from the perception. There is no room for AOL to wait, AOL must
lead the internet world not follow someone's foot step.
I am for this AOL's bid because if not now, when? |
