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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: polarisnh who wrote (13150)	7/30/1999 11:51:00 AM
From: Jing Qian	Respond to of 29970

Balance out the equation a little bit. If you have 100,000 customers you can charge much higher advertising rates than you could for 4000 customers. Who knows that maybe enough to justify the cut in half of the monthly fees if you can prove high user hit counts to the advertisers? Exactly. 100K customers is very different from 4000 customers. 17 million customers is even more different from 1 million customers. They award you the title of King of the Web if you can service 17 million customers. Then all the advertising money comes your way. With a higher customer counts and higher access speed, you have the momentum to accelerate growth. It must be the critical mass threshold that will mean more to ATHM's success than recouping the fixed cost short term. Although it's still a rumor that they may reduce price, it must be in management's mind many many times. If they do the calculation and find out that the long term good can far outstrip the short term loss, I am sure any savvy management team would see that.