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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Pruguy who wrote (27218)	7/28/1999 12:37:00 AM
From: VICTORIA GATE, MD	Read Replies (1) \| Respond to of 41369

AOL - Cutting Prices - Investment Ideas By The-Adviser.com - Tuesday, 7/27/99 New York - Last month, we broke the news that AOL was going to offer free Internet access in Europe. Today, we continue our exclusive coverage on AOL's new pricing strategy in the US and AT&T's aggressive new growth plans. The-Adviser.com has learned that AT&T is considering slashing Internet access pricing as part of a new war on America Online. The pricing strategy would push telephone-based unlimited Internet access pricing to as low as $9.95 per month and would result in cable-broadband access pricing declining to $19.95 per month. This new pricing strategy may force AOL's hand to cut Internet access prices in the US as a pre-emptive strike. Although AT&T and AOL management refused to officially comment, we understand that AT&T's new pricing strategy is based on the success of its Digital One Rate Plan that resulted in Digital service becoming the new standard in US cellular service. Under the Digital pricing strategy, AT&T absorbed roaming and long distance charges for wireless customers and reduced the overall cost of owning a cellular phone. Excite@Home, a leading provider of cable access which AT&T owns a significant portion, is believed to be supportive of the plan which reportedly includes the possibility of an additional equity investment by AT&T and Microsoft into Excite@Home. Such a partnership would put AOL on the defensive and may accelerate AOL's new US pricing strategy. We are not certain about the timing of the introduction of this new strategy and if it has been finalized. The-Adviser.com first reported that AOL's overseas price cuts were just the first phase of a radical new pricing model that AOL management was considering. AOL continues to charge US consumers over $20 per month but finds itself with the sudden possibility of losing this annuity type revenue. Price cuts under consideration are believed to be as steep as 50% for some consumers. The move would be an attempt to thwart potential customer losses and maintain loyalty.