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

To: C Nelson Reilly who wrote (33135)	10/21/1999 9:13:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 41369

A Stellar Quarter At AOL Kevin Prigel Oct 21 1999 America Online NYSE:AOL Internet \| Technology \| Quote \| News \| Research America Online turned in results that once again blew away street estimates, and met "whispers." I have not yet been able to break down the results to find any weakness or particular strength, but will offer my quick take on the quarter: America Online's subscription services alone have more than 20 million subscribers. That represents a number 7 times higher than their nearest competitor (Mindspring-Earthlink), and almost 25 times larger than Excite@Home. In fact, America Online's network reaches into as many households as two-way cable does. AOL's subscriber growth is on pace to exceed 30%, this year. Despite all the broadband hype, AOL's subscriber growth is not significantly trailing the organic growth at the cable access providers. Likewise, it does not appear that "free" ISPs are significantly impacting the AOL story. The future of the AOL story lies in advertising and commerce revenues, and their high profit margins. Based on this quarter's results, the future looks bright. This category of revenues was up 100% compared to last year, and most likely provided the vast majority of AOL's profit growth. With America Online's advertising backlog in the billions, this trend does not look like it will end. America Online continues to use its cash and stock hoard to make savvy investments. Last night's announcement includes a $800 million investment in Gateway that will allow the company to immediately acquire 600,000 subscribers currently, and hundreds of thousands more in the future. According to AOL's current valuation, the 600,000 acquired users (a good portion of which will switch to AOL service) is over $3 billion. Daily use for AOL members is approaching an hour a day. TV is dead, and AOL is the future.