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

To: Pat Lombardo who wrote (31526)	9/25/1999 6:17:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 41369

America Online Surges After Microsoft Says It Will Raise Internet Charges By Aimee Picchi AOL Surges After Microsoft Raises Internet Charge (Update1) (Updates with closing stock prices.) Dulles, Virginia, Sept. 24 (Bloomberg) -- Shares of America Online Inc., the largest Internet service provider, surged 12 percent after Microsoft Corp. said it will raise its Internet access fee by $2 a month, relieving concern that a price war would erupt between the companies. America Online rose 10 1/8 to 97 5/8, while Microsoft fell 1/4 to 90 15/16. Last month, AOL shares tumbled after Microsoft said it was considering cutting or scrapping fees for its MSN Internet service. Yesterday, Microsoft said it would increase its monthly fee to $21.95 from $19.95. America Online, with more than 20 million subscribers, charges $21.95 a month for unlimited Internet access, about $2 more a month than most of its rivals. Investors were concerned that AOL could see a repeat of its troubles in the U.K., where it has been battling free Internet service providers such as Dixons Group Plc's Freeserve, if Microsoft lowered or eliminated its fees. ''It means one competitor won't be nipping at their heels and it tells you that if you want to offer premium content, (consumers) are going to have to pay for it,'' said Ned Brines, an analyst at Pasadena, California-based Roger Engemann & Associates, which owned 5.3 million shares of AOL in June. AOL said in July that it would start a free Internet service in the U.K. after Freeserve leapfrogged it as the top provider just three months after it began offering free access. ''It's wonderful news for AOL investors because it's been this cloud overhanging AOL for the potential for a price war,'' said Arthur Newman, an analyst at Schroder & Co. Inc., who rates AOL a ''strong buy.'' Microsoft is raising its monthly fee because it's offering new services such as 24-hour, seven-day a week customer service, a Microsoft spokeswoman said. The company, which is also offering $400 rebates on personal computers to people who sign up for the MSN service, figured that consumers would rather have a rebate than a reduced monthly fee, she said. AOL's CompuServe unit offers a similar rebate for people who agree to use the CompuServe online service for at least three years. CompuServe has signed up more than 300,000 new subscribers this quarter, boosted by the rebate offer.