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Technology Stocks : America On-Line: will it survive ...?
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To: yard_man who wrote (2166)3/5/1997 5:04:00 PM
From: Eric Jorgenson   of 13594
 
<<Question is: can AOL subsidize the losses on subscribers and still
come up with a profit from these advertising revenues?>>

Barry--Thanks for your reply. Starting back in the days when almost everyone was receiving TV signals via rabbit ears or monstrous rooftop antennas, several cable TV companies (i.e., the ones providing the content) were unprofitable for years but eventually succeeded despite overwhelming competition from the original Big 3--ABC, NBC, CBS. Early critics doubted that the cable companies could attract enough advertising revenue to survive and that Big 3 would in the end prevail.

Also, AOL is now attracting the right sorts of people to bring in advertising revenues--I've noticed top notch media advertising VPs joining AOL recently. And I think AOL has will continue to have captive audience--I read a statistic from one study showing that 50% of children said they prefer exploring the internet to watching TV.

Regards,
Eric
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