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

To: TARADO96 who wrote (33251)	10/26/1999 12:17:00 AM
From: Dwainster	Respond to of 41369

To all: Some separate, interesting observations from Briefing.com concerning ATHM and AOL -------------- Excite@Home (ATHM) 40 +15/16: Where is Leo Hindery when ATHM needs him? The outgoing head of AT&T's (T) broadband division was a proponent of keeping ATHM out of the content business and focusing on its strength: fast Internet connections. Hindery has clearly lost that battle, and as if to flaunt the victory, ATHM purchased bluemountain.com today for $780 mln in stock and cash (and a potential for $270 mln more if Bluemountain meets unspecified performance objectives). For the few who don't already know, Blue Mountain Arts is the purveyor of free online greetings cards, or as ATHM President George Bell calls them, "event-based commerce opportunities." While Bell may well be able to turn these non-revenue events into revenue events, it is still unclear how this mixture of connectivity and content helps ATHM shareholders. Though you will hear Bell use the word synergy often when speaking of the @Home/Excite merger or today's acquisition, we don't see it. Subscriptions to ATHM's fast Internet access, which is the core business, are not significantly helped by Excite's portal offerings and are certainly not helped by greeting cards. Gaining subscriptions is all about building out the network and competing effectively on price and speed against DSL and wireless offerings. So neither Excite nor Blue Mountain will significantly help to build @Home subscriptions. It is even more obvious that @Home doesn't do anything to benefit Excite or Blue Mountain offerings. Both of these sites have a tremendous number of users already, @Home doesn't bring much to the table by guiding its relatively small user base to these sites. There is simply no compelling reason to combine these companies -- @Home's focus on providing the best Net access can only be blurred as it worries about greetings cards. ATHM is once again wasting stock and cash on an investment that has more to do with building a big Internet company than an efficient Internet company. Leo Hindery had it right, but he's gone. Who will save ATHM from itself now? ---------------- America Online (AOL) 118 3/8 -2 : This day may mark the first real concrete evidence of the coming of the next era of the internet: the broadband interactive era, when the distinction between TV and the PC-internet really gets blurred. Why today? Because OpenTV, a private company, announced that they will launch their interactive service in the US over EchoStar's Dish Network satellite service, starting around late Q1, 2000. And, as part of today's announcement, AOL has invested an undisclosed amount in OpenTV. AOL previously made a $1.5 billion investment in Hughes Electronics, whose DirectTV and DirectPC services compete with Dish Network. OpenTV however, is working with both satellite companies. While it is clear that OpenTV is going to be a hot IPO when it finally gets around to it (on the Amsterdam Exchange, however), the presence of AOL on both sides of the satellite TV battle is intriguing. America Online also invested an undisclosed amount in TiVo, the digital VCR manufacturer. TiVo boxes record shows for time-shifted watching, but it makes a CPU and hard drive present at the TV end. There are now possibilities for non-PC internet broadband applications. Things are getting very interesting, very quickly. Put together the pieces of America Online recent investments and the vision of the broadband internet future starts to get a lot clearer. First of all, it is more like TV than like the PC. Secondly, the interactive portion probably is secondary to the video portion. This is where the other investors in OpenTV, who include TimeWarner, and News Corporation (parent of Fox TV), come in. (Are we looking at chat rooms to discuss episodes of the Simpsons in real-time?) While it still isn't clear just what broadband internet applications really means, or what will actually sell, in just six months we will start to see the offerings. It should be very interesting, especially when we see how America Online content is present in the offerings. AOL was the one who first started using the term "channels" for areas of content, back in 1996. OpenTV interactivity is already used in 900,000 homes in France, but it isn't really integrated with the internet. OpenTV shares will be tough to get, since their IPO is planned for the Amsterdam Exchange. However, the set top box is all Java based, since Sun Microsystems (SUNW) was an original investor in OpenTV, along with Thomson Multimedia, and Myriad International Holdings (MIHL), an international pay TV company. Add AOL to that list today, and we are just six months away from seeing some of the next era of the internet.