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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (7366)	1/19/2000 3:08:00 AM
From: Scrapps	Read Replies (1) \| Respond to of 9236

Aware's Perspective on AOL/Time Warner Merger & The Effect It Will Have on the DSL Market 01/12/00 Many people are trying to decipher how the AOL/Time Warner merger will affect the Internet landscape due to its potential to affect a broad number of Internet-related companies. Because Time Warner brings cable network operations to the new company, an obvious question is how will that aspect of the merger affect the DSL market. What follows is our opinion on that particular question. First and foremost, we believe the merger between AOL and Time Warner is about moving old content into a new medium. AOL is a terrific Internet portal with its 20 million plus subscribers, and Time Warner brings an enormous amount of exciting content to the new entity. The logic of combining their respective strengths is compelling. AOL's strategy has been to serve the mass market. They have grown to be the most powerful ISP/content provider in the world by delivering user-friendly service to the masses via analog dial up modems. Their market opportunity is 100 million US homes and hundreds of millions of homes outside the United States. Time Warner's cable networks, which serve 13 million subscribers, only reach a small niche of the entire market. AOL's phenomenal success is predicated on its business strategy of providing solutions for everyone. It does not make sense for AOL to limit content distribution to any one broadband approach let alone Time Warner's cable networks exclusively. We believe that AOL/Time Warner and other content providers are well served by the rapid growth of all forms of broadband services. The widespread availability of broadband services helps them to enhance the value of their content by increasing the speed at which it gets delivered. AOL had already recognized the importance of multiple approaches to broadband services as evidenced by its deals with Bell Atlantic and SBC to offer DSL services to its customers, and its investment in Hughes satellite. AOL has been a leading advocate of open access to cable systems by ISPs. AOL re-iterated that position when they announced the merger earlier this week. While open access is a different issue than high-speed Internet access, AOL has demonstrated a mindset that indicates they understand that they are in the mass-market content business, not the distribution business. While it's much too early to tell in what form regulators will approve the merger, we should point out that Time Warner's cable business may or may not be part of the deal. Therefore it is our conclusion that this merger is positive for all forms of broadband services, including DSL, for the following reasons: The merger should drive more and higher quality Internet and other content offerings. These new content offerings will require more bandwidth and will continue to increase consumer demand for high-speed access. Consumers will demand and receive more choices for high-speed access as the market unfolds. The resulting consumer demand and competitive broadband services will exert even more pressure on the telephone companies to deploy DSL services. -------------------------------------------------------------------------------- This commentary contains certain statements of a forward-looking nature relating to future events or the future financial performance of Aware. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include the risks that Aware has a new and unproven business model, that Aware depends on a limited number of licensees, that Aware depends on equipment companies to incorporate its technology, and that DSL technology competes with other technologies for broadband access. These and other risks are described in various filings that Aware has made with the Securities and Exchange Commission, which risks are incorporated herein by reference. aware.com