To: equalizzer who wrote (1352 ) 7/29/1999 6:45:00 PM From: Eric Fader Read Replies (2) | Respond to
EQ - Glad you're still around. As I've posted on the KOOP thread, I've been reading an increasing amount of commentary recently on the legitimacy (or lack of same) of the Internet advertising revenue model. The best explanation I've seen of why it will fail is that it's a "zero-sum game," in which companies' advertising revenues, collectively, are canceled out by their reciprocal advertising costs, guarantees, "access charges," or other outlays of one kind or another. That's basically what the affinity programs are. My personal favorite, though, is KOOP's agreement to pay AOL $80+ million. Hey, if KOOP has another few hundred million to spend, it can probably sign "deals" with many other entities and the ignorant mass investing public will drive its stock to the moon, but ultimate success will require that significant revenues eventually be derived from consumers. Unfortunately, however, another thing that is becoming obvious to the more intelligent commentators is that the public loves being able to easily access information over the Internet but is generally unwilling to pay for it. PartyTime on the KOOP thread may be onto something when he says he expects KOOP to start acquiring companies with tangible products and real revenues, using its own overvalued stock as currency. They'd better hurry, though, because as the stock price erodes those theoretical acquisitions become increasingly more expensive.
