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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: Shafik Habal who wrote (23053)	7/16/1999 7:04:00 AM
From: Jeff Dryer	Respond to of 27307

I still like Tim McCormick's funny post #reply-10416309 after Yahoo announced earnings. You do make a convincing case for AOL. At some point it's a question of faith and obviously you are a believer at this valuation level. I'm not sure that I am, because I do think AOL has much more competition than Microsoft had at a similar stage in Microsoft's development. Clearly, Microsoft has a monopoly on the operating system (and therefore other products and services) which generates monopoly profits. I don't believe that AOL has a monopoly now or in the future, so net profit margins will never be Microsoft-like. It will be interesting to see how Free ISP affects AOL. NetZero has filed to go public and will be raising more than $100 million. AOL makes almost all of their money from subscriber fees. If Free ISP catches on big in the U.S. like it has in Europe, then NetZero will hurt AOL. Since AOL has about 18 million subscribers and a market cap of $155 billion, AOL users are valued at $8,600 each. This kind of valuation per user makes it easy for free ISP companies (such as NetZero) to justify providing Internet service for free. AOL management has done well, but I often wonder if the real management power is at the Wall Street level where most analysts who cover AOL have a strong buy rating on AOL regardless of valuation or competitive threats.