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

To: Ed Zhao who wrote (14148)	8/12/1999 2:42:00 AM
From: yihsuen	Read Replies (2) \| Respond to of 29970

Zhao, Man! You really know how to punish me by those six points. Sigh! It's kind of late now but I will try my best. First of all, I want to apologize to you for being harsh on your profile on the previous post. I am a typical lazy person, contribute only occasionally over here, but the recent rumors on ATHM force me to come out to defend this company and try to clear a few things out with my limited knowledge. AOL clearly needs ATHM: Calm down first, needs doesn't mean have to own. 1. regarding the news that MSN is about to reduce or even eliminate connection charge in order to compete with AOL, AOL stressed that AOL's strategy is to compete in service quality. Without a broad band offering, it can hardly say anything about high service quality. Lack of broadband solution from AOL is no news. Not just because the recent MSN event. Go dig out 3rd quarter conference call from AOL, Pittman even said most AOL users have no need for speed. You, as an analyst, I strongly suggest you to follow Pittman, this clown is fun to watch. Instead of working out a reasonable deal with ATHM, AOL told its shareholders that it has DSL, satellites, and wireless solution. Were you told that DSL available around summer time? Where is it? 2. Acquiring ATHM makes economic sense for AOL: if one million of current AOL members are willing to convert into cable access at $40 monthly fee, it translate into $200 million/year in cash that will go straight to the bottom line. if five million subscribers is to convert to cable access at $35 monthly fee, it translates into more than $600 million in profit (after taking the effect of losing revenue from existing ATHM customers). Nice numbers isn't it. How about AT&T paying $110 billion for cable and get a fraction of control of ATHM, does T deserve some income just to cover a portion of the payment? Look what AOL did in the cable open access! Would you be shaken by anger and tears if you were the party got raped - gang and butt raped. 3. ATHM's Excite portal site is more successful than AOL's own portal site and attracts more views. Wow, this is the first time ever I see such statement. You should convince some gurus who really resented Excite on this thread. I am parallel exchanging thoughts with gpowell and you now. Basically, I want to let him know AOL is a 99% content player but want to insist on staying closer to the ISP quicksand. Let's assume AOL IS 99% content player just like Excite. Base on your statement, I can almost conclude that ATHM got at least 95% discount on buying Excite! LOL! By the way, where in the world did you get the statistics? My friend, what are you smoking now? LOL! 4. AOL has $3 billion in cash and generating annual cash flow of more than $1 billion, enable AOL to make stock + cash deal that will further reduce impact in earning dilution. Sound like awful lot of money isn't it. Go dig out the financial statements of T, MSFT, RBOCs, or a few other Fortune 500 could be ATHM suitors in YOUR mind, AOL is very impressive on market cap, unfortunately that amount of cash can't afford some expensive toys. Now, do you like cash on hand or stock? 5. For AT&T, putting all eggs in the ATHM basket is a risky strategy if DSL catches up quickly. By allowing AOL to acquire ATHM, T will own 8-10% of AOL. Cable and DSL, which one is better, is beyond the scope of our discussion, but I suggest you to give yourself some more time to find out the answer. My friend, I thought you said ATHM worth $48/share to AOL, if AOL bought ATHM, Armstrong can only sit on the lap of Case as a pet. That's why I told you that it would bankrupt T in no time if the deal ever happen. But, to own my right testicle is still not entirely impossible. 6. AOL has demonstrated it's willing to swing between rival parties for its own interest. Remember AOL first made a deal to use Navigator then turn its head a few day's later to accept IE as its default browser. And then again two year later, bought Netscape (effectively dumped Internet Explore). Agree! What a swing! But, what does that has anything to do with buying ATHM? By the way, Netscape, it better be good - it only cost AOL $10 B. Oh, have you tried IE5? It's worth a looking, you can download for FREE, and it's more compatible with various sites, has even better Java support than Netscape browser. Go Asp Hi you Asp again. But "Go Asp" for what? Hyping AOL?