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

To: John Carragher who wrote (30098)	8/28/1999 8:05:00 AM
From: puborectalis	Respond to of 41369

CompUSA and AOL in Alliance By THE ASSOCIATED PRESS ompUSA Inc. and America Online Inc. announced a marketing alliance yesterday under which CompUSA will begin selling computers with a custom keyboard that has a key for connecting directly to AOL. CompUSA, a Dallas-based retailer of personal computers and related products, said it would preload AOL and Compuserve software onto its PC's and sell the software in its stores. CompUSA will also offer classes at some stores on how to use the AOL software. Also under the deal, special rates for 24-hour CompUSA customer support will be offered to AOL and Compuserve members. CompUSA operates 210 stores in 82 United States metropolitan areas.

To: John Carragher who wrote (30098)	8/28/1999 9:12:00 AM
From: ChinuSFO	Read Replies (2) \| Respond to of 41369

John, agreed that countless rivals dislike AOL's business model wherein they are assured of a positive cash flow from its monthly member charge. ATT terms it as a "dinosaur business model". But the phone companies have a similar monthly charge of 9.99 or whatever. So when ATT accuses AOL for "dinosaur business model", it is the pot calling the kettle black. Evolution in business practices is a given and I am sure Steve Case and the boys are cognizant of the inevitable which is that they will not be in a position to charge what they charge to their members. They are not asleep either. They are adding value everyday by striking e-commerce related deals such as the recent one with CompUSA. And they have creditably preserved their Instant messaging turf. The very fact that companies like MSFT are trying to take some of their business away, is a tacit recognition that the prize is in AOL's possession now. And AOL management is not asleep. I guess one of the issues that a frontrunner has to deal with is how to defend its position and it is doing that well. Meanwhile let the doomsayers and naysayers have a field day.

To: John Carragher who wrote (30098)	8/28/1999 12:46:00 PM
From: Steve Robinett	Respond to of 41369

John, Barron's evidently comments, That AOL has been forced to ditch the fee in launching its Netscape online service in Britain could well be a precursor of things to come at home. I doubt it. As I'm sure you know, the situation in Britain with local phone companies kicking back some of the local per minute charges to ISPs is substantially different from the situation in the US. As for AOL dropping subscription fees here, that's economically impossible. It costs AOL $17-$18 per month per subscriber to provide internet service. 79% of AOL's revenues come from subscriber fees. The other 21% of AOL's revenues come from high-margin advertising and ecommerce. It's simple arithmetic that even with the high margins in the ad/ecommerce business, that 21% segment cannot cover the network costs currently paid for with subscriber fees. If AOL actually did offer free US access to AOL, they would not only never break even but the stock would be lucky to sell above $25/shr. Best, --Steve