Hi, Jenne - Thanks for your response. Agree that AOL - T alliance or collaboration would be a grand slam ! I "boldly" predict AOL share price would go up at least 10 points the day it would be announced. The main obstacle, IMO, appears to AOL's conflicting or competing interests with the "T food chain" which has strong designs via ATHM - XCIT merger of extending position in the CONTENT / PORTAL SITE arena.
With the RBOC's, AOL faces no such conflicting or competing interests.
Of course, AOL would stand to lose some pure, solo ISP revenues through DSL but that could be made up for by premium prices for some co-branded packages. Net gain positive, IMO.
The background on the AOL - T food chain conflict goes back to last year when Case was in extended talks with ATHH CEO, as I have commented on prior posts. After talks failed, ATHM CEO appeared on TV and said the problem was AOL wanted ATHM to be "a dumb pipe" and ATHM wanted to be "more than that." This led ultimately to the XCIT marriage on the rebound, as it were. (Too bad the AOL - ATHM marriage did not take place. Think about that plus the DSL's, etc. !!)
Working up the T food chain, I would venture that XCIT and ATHM are passing the message to Armstrong not to make the playing field "too level" for AOL. Armstrong seems to be a very gifted and skillful "win-win" pragmatist, a la the Comcast conclusion, and therefore, in the end there may be some reasonable resolution with AOL.
IMO, however, I don't believe any eventual deal with T, et al will be on terms as attractive and competitive as the RBOC's can offer. As many have pointed out on this thread, those terms don't need to be either as long as AOL has the opportunity for some "reasonable" presence and market share the in cable modem access.
This, combined with DSL's, wireless (Jubak feels this is greatly underestimated at present) and of course, the exciting prospects of satellite -- would still a great combination for AOL Anywhere. (BTW satellite could be a real sleeper, IMO, if FTC reduces / removes restrictions on local programming -- some feel this could happen and would help considerably to level the playing field vis - a - vis cable.).
Other comments / opinions appreciated.
George Martin |
