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

To: E. Davies who wrote (14644)	8/17/1999 7:14:00 PM
From: matt gray	Respond to of 29970

It appears that the critical issue with the 2002 expiration date is inertia. Most customers once committed to an ISP won't engage in the painful process of churning unless there is an important reason for changing. In the case of a churn between AOL vs ATHM this is obvious.. the catalyst for killer apps will be based upon speed/bandwidth. Frankly, doesn't 2002 seem like an eternity in this business? The reality is that AT&T is a "lock" unless they can arrange or buyout the contract with ATHM. Subsequently any effort by AOL to eliminate this arrangement would need to be economically favorable for ATHM. Also the talk about open systems with regard to ATHM is bogus. The system is open and always has been. The system is open based upon price. AOL wants to pay chump change [$3 per user give me a break] which doesn't approximate the real cost of delivering this service. They'll need to get out their checkbook. If they wait, as time goes on they'll realize their loss of market share and be forced into paying a higher price. Unfortunately for them, if they wait too long they won't be able to dish off their deflating market cap in a stock swap. Their best chance is to immediately strike a huge deal with ATHM/T. It will cost them alot, but they have no real choice in the matter. Their only other choice is to sell their soul to the RBOCs....their other alternative which is 12-24 months away from real implementation. CATV/HFC and RBOC/DSL are the only choices. No sane CLEC would attempt a business plan based upon residential ADSL. AOL should drop their shorts, pay a huge amount to merge with ATHM [and me:)], and declare victory to its stock holds.