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


To: Pruguy who wrote (31338)9/22/1999 9:52:00 PM
From: StreetAdvisor  Read Replies (1) | Respond to of 41369
 
News on this deal is coming from executives at the companies involved. Why is it good for AOL if they drop the subscription fee for AtHome users, but keep the ad revs?

- AOL makes nothing, that's nothing, from the $21.95 a month fee. This covers infrastructure. With AtHome providing the infrastructure, there is no need for this $21.95.
- Broadband users are online more. That makes the AOL model more appealing, which is more similar to a TV model than anything (the more you "watch it" the better).
- AOL Plus enhances the revenues that AOL can get from advertisers by enabling them to serve rich media ads. AOL Plus is only enabled over broad band connections. DSL deals let them dominate some of the market, add satellite and you have a little more (anyone else noticed those new DirecPC commercials?), add cable and you've got broadband wrapped.

Kevin Prigel
streetadvisor.com