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

To: Tie Zeng who wrote (28960)	8/9/1999 8:56:00 AM
From: RocketMan	Respond to of 41369

AOL has over 2/3 of revenue from subscription fee. I may be wrong, but I thought I heard Pittman say it has come down to around 50% now, with the other 50% from e-commerce. In either case, their goal is to decrease sub revenues as a percentage of their overall revenue. If MSFT makes ISP free, AOL will lose quite a bit of their profit. It would hurt, but AOL would not lose much of their current profit, IMO. I don't think the current 18M subs are going to switch over from a service they are comfortable with for the sake of saving 21.50 a month, especially if they have to deal with having to purchase something else in order to get that "free" service, as MSFT said they might have to do. I also don't think new subs, except for those who can not afford it, would go to MSN only for that reason. After all, there is NetZero, full of banner ads, there are cheaper ISPs out there. No, I think they will either go with AOL, in which case the monthly fee is not a major obstacle, or go for price in which case MSN would be only once choice out of many. And MSFT never intend to make money from subscription fee. Yes, I know they say that now, since they are not making any money. LOL.