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To: yellowfintuna who wrote (35434)	12/15/1999 1:30:00 PM
From: JayPC	Respond to of 41369

It doesn't make sense? Did you check the numbers before you posted that? Did you do your research? I did. Here's the links. You are right, shame on us. from last earnings: Subscription Revenues: Quarterly subscription revenues reached $995 million, up from $723 million during fiscal 1999's corresponding quarter. and advertising, commerce, and other revenues reached $350 million First quarter revenues rose to $1.5 billion Now, do the math. 1 billion from subs, that's 66.6%. Adds, Ecommerce and other, thats 23.3%. That leaves about 10% for operating income (AOLs numbers dont exactly add up) $995 million for subs+350 mil for adds +265 mil for operating income. =1.610 billion not 1.5... media.web.aol.com Is it the @HOME part that doesn't make sense? They receive 13 a subscriber. Last earnings quarter they had 840,000 subs. thats 11 mill a month x 3 months is 33 mill for the quarter. their total revenue was 113 million ATHM) today reported revenues of $113 million for the quarter ending September 30, 1999 home.net so of that revenue sub money was only 30%, the rest was from adds, Ecommerce and other... actually 70% So again, what doesn't make sense? AOL gets its bread and butter from subs. Excite@HOME gets its from adds and Ecommerce. Will these percentages change over time for both companies? Obviously. But it doesn't change whats happening now. Seems pretty obvious its the advertising that will drive the free access. In fact, Advertising and Ecommerce is a much bigger part of Excite@Home than it is for AOL. Its 70% of Excite@HOME's business. Perhaps you thought I was talking about total dollars? I wasn't. Regards Jay

To: yellowfintuna who wrote (35434)	12/15/1999 1:53:00 PM
From: gpowell	Respond to of 41369

This just doesn't make sense. We should all check the business models ourselves before we make up our minds. Advertising and e-commerce is a function of the # of subscribers. The percentages I used are taken directly from ATHM's and AOL's 10Qs and 10Ks. Your assertion is correct, absolute advertising and e-commerce revenue is primarily a factor of the number of subscribers. A secondary factor is absolute time spent on the net, which itself is a function of the ease of use. Having an always on connection certainly helps. Given that ad/e-comm revenue is a function of the number subscribers, one should consider the growth rate of all revenue streams as AOL subscriber growth rate slows. It's not a particular encouraging picture for AOL's future revenue growth. However, I wouldn't overreact, it's a fluid situation and the growth of e-tailing isn't done. The percentage of e-tailing to subscription revenue is something I would watch closely; one would like to see the e-tailing portion become greater than 50% of the total revenue. One thing is clear, broadband users spend a lot more time on the net compared to dial in users. While it would help AOL to have a clear broadband strategy, I'm not sure this would actually help them retain their customer base. I assert that the primary driving force of AOL's subscription growth is the use of instant messaging and chat rooms, hence AOLs near manic attempts to block access to the IM system from outside ISPs. If my suspicions are correct then the majority of their users will not pay up for broadband access. ATHm has almost no advertising and e-commerce revenue, that's why they bought excite to get some Where does this come from, do you people just make this up? ATHM's business plan has always included advertising and e-tailing. The excite purchase was considered by most ATHM investors as a completely unnecessary move which has added zero value to ATHM, although we may have already been proved wrong. From ATHM's last 10Q (Three Months ending September 30) "Revenues: Media and advertising services $ 75,610 Subscriber network and other services. 36,952 Revenues consist of revenues earned from media and advertising services and subscriber network and other services. Media and advertising revenues primarily consist of revenues from advertising, sponsorship commerce agreements and ad serving and targeting revenues." "Media and advertising revenues increased to $75.6 million, or 67% of total revenues, for the three months ended September 30, 1999, from $1.7 million, or 12% of total revenues, for the comparable period of the prior year" One note of caution, lest you get too hyped about ATHM, also from the last 10Q, We do not believe that it is appropriate to compare our media and advertising revenues from periods subsequent to May 1999 with periods ending prior to that time. In addition, you should not rely upon increases in these revenues from periods prior to May 28, 1999 as an indication of future performance."