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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (29070)	9/30/1999 9:29:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

FWIW....BancBoston Robertson Stephens (BRS) issued a "strong buy" rating on AOL and believe that the stock provides a good buying opportunity at these levels since the stock is still well off its 52-week high of $175. Shares fell from $175 to low-$80s on concerns over subscriber growth, international competition, pricing and broadband and AOL has addressed some of these issues in recent weeks. Now, BancBoston believes that once investors get a chance to better understand those issues, they would start to buy the stock. As far as subscriber growth is concerned, AOL is expected to add 850,000 new subscribers this quarter, higher than last quarter and above BRS's expectation of 800,000. Its CompuServe unit is also seeing healthy growth after the $400 rebate. CompuServe plays an important role so that AOL can target the value segment of the online consumer who are looking for low price. Also, the fact that Microsoft's MSN Network raised its Internet price suggests that a large part of the consumer is willing to pay $21.95 for premium service. AOL UK is beginning to take on competition head on by offering a flat rate per minute charge when they connect to the Internet. AOL UK introduced fix rate price, which appear to be enjoying a wide acceptance. If this strategy is successful, AOL might be able increase its overseas customer base. On the broadband side, AOL is on scheduled to roll out high-speed access via DSL and satellite, but is looking to provide service through cable. Much has been said about a deal between AOL, Excite and AT&T. If there is a deal, it might work something like this. AOL would buy Excite and then have a broader deal with AT&T. Several analysts said that such a deal would make sense from AOL's point to view, in which case, AOL would get access to high-speed access through cable. AOL said that in such an event, off the $40 subscription fee that a consumer would pay for access through cable, AOL would be willing to pay $30 to anyone that brings cable access (in this case, say Excite). Excite currently receives 35% of $40 that it charges its subscribers for high speed access and the other 65% goes to the cable company. However, by teaming up with AOL, Excite would receive 35% of $30, which means that Excite's revenue might decrease. The other issue is the timing of any deal. While there are rumors that a deal might take place within the next few days and while that still is a possibility, others believe that such a deal might not happen until early next year. This is because AT&T might want to wait until it closes its acquisition of MediaOne. Overall, BancBoston remains positive on the stock and believes that investors should use current opportunity to buy the stock, which still has more room to the upside.