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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: ld5030 who wrote (21276)	4/21/2000 1:22:00 PM
From: David Nelson	Read Replies (2) \| Respond to of 29970

Thanks for your comment. It's a very short term perspective, though, and ATHM has to build a franchise with staying power. AOL is growing their subscriber base at roughly 600,000 per month and ATHM is growing at a much slower rate. AOL users know that they can migrate to broadband as the need arises. Brand name, content, ease of use, price, a sense of community, a sense of security, the everyone loves a winner syndrome, and the newbie factor are all reasons why more users sign up with AOL each month. Content is why they stay. As AOL users grow up, they tend to develop a love/hate relationship with AOL. Many, like me, maintain more than one ISP (one for me, and one for my travel and the kids) and stay with AOL for very good reasons. Among these are the following: 1. Worlds largest portable ISP. In the professional fields, particularly journalism, my field, reporters travel all over the country. AOL acts as a base since you can plug into a phone line in at any hotel, dial "1 800 give me a local access number," and you're are online. I use this feature frequently. 2. You can run any browser on top of AOL so you never have to actually use AOL if you don't want to. 3. Instant Messenger. This is the most widely used and valued feature of most AOL users. In an attempt to compete, Microsoft introduced an Instant Messenger system and tried to access AOL's user base but lost in court. Yahoo offers an equivalent but has far fewer users. Of course there is ICQ, the grand daddy of all instant messengers, but AOL owns that too! There is also an internet version of Instant Messenger which is available to download. This version is also packaged with Netscape for non-AOL users to tap into this mammoth resource. This is a very powerful and compelling feature. 4. Newsgroup access is free including all the hardcore newsgroups which are either censored or not available on most other ISPs. Want to build a thermo-nuclear warhead but need some tips on the handling of enriched plutonium? Newsgroups are where you find out. 5. AOL works over T1 or DSL so any user at can install and use AOL at work... or run it on top of another isp. Countless users do this including me. 6. AOL users can access their mail over the internet too without having to use the Pop3 account most ISPs require. This makes access to mail possible from anywhere in the world, including behind firewalls. 7. Multiple screen names under one account so each child can have their own email address. 8. You can email 50 megabytes files. None of the usual 2 megabyte email restrictions. 9. Kids love AOL and have access to a wealth of content without having to venture out on the net for their fun. This acts as a fairly good control for concerned parents. 10. And parents can stay in contact with family members while at work or vice a versa. 11. Every commercial Java chatroom system attempts to emulate AOL's chatrooms including their profiles, and dice rolling capabilities (for the gamers). People love the AOL chat system. There are countless other reasons to numerous to go into here... I am not a salesman for AOL, but ATHM is hard pressed to compete with AOL's wealth of content and features such as these in a community environment that millions of users love. Some here may consider these to be trivial but over 22 1/2 million users paying 21.95 per month (that's $493,875,000) don't think so. That's one fifth of the computing public in the US. And they continue coming back. AOL has too many shortcomings to go into here, but many find AOL's environment to be too stifleing, too confining, and don't appreciate censorship at the corporate level. It's kind of a big brother that is always watching. Eeeeeek! AOL can be knocked off if users are offered something better. It's kind of the same story as Microsoft. Find me someone that can meet my needs, make it easy for me to make the move and I will do it. No one has ever succeeded in offering the combination of content, ease of use and price that keeps AOL user's coming back for more. Compuserv and Prodigy tried, but failed to recognize what AOL seems to know. Since AOL will be able to offer everything that ATHM offers now within a year or so, it seems to me that ATHM has to respond and offer what AOL does just to keep up. Management recognizes this and Excite was their first forray into the content area but it is only the beginning. They must add more content. Otherwise who cares which pipe you use since the "pipe" is (or will be) made available by everyone and his brother. That means a price war is inevitable. Then only the content providers can hope to survive. Long distance service is nothing but a protracted price war played out on our television sets that ultimately will end up in free video phone access over the internet. And you don't have to use the video if you don't want to. Free! T knows that. Why do you think they are working so hard to offer more? That has to be ATHM's goal... to offer more than AOL. And it can't be done without superior content and a compelling reason to make the change. Speed is the only reason ATHM offers right now and that advantage will go away over time since everyone will offer the speed. Still, the technology is young and I believe that ATHM can successfully steal customers for the short term. Long term, ATHM has to provide content though. Where I live in San Diego, I have oodles of high-speed options from which to choose and ATHM is only one. I canceled my ATHM subscription in favor of DSL last year because of security issues which Cox@home has since resolved. I'm happy with DSL and can tell you that countless others are too. The problem with offering access only without content is that then the only reason an individual will stay is if he or she can't find a better price somewhere else. Once a DSL modem is installed, you can shop for price among many providers within any given marketplace. In San Diego there is a DSL war going on among providers. It's interesting because most of them simply resell Pac Bell's service. Deregulation in action (har-dee-har!). These guys fight for pennies and give the real money to Pac Bell. It's akin to the old cell phone and satellite wars. It's ironic. Only two years ago there was no DSL available in San Diego. Now there are price wars. It will happen to cable too. Sooner than you may think. Soon we'll have people dressed up like computers selling internet access on street corners. With cable, so far, this is not the case since the cable cos. still have an exclusive on the wires (not for long). When cable is deregulated like the phone cos., the story will change. You will be able to shop price on cable just like you can now with DSL. Just something to chew on! This is one of the reasons why I still think ATHM has a great chance in the short run if they can build their subscriber base fast enough. If they don't move fast, AOL and others will close this window of opportunity. Not to mention that there will soon be viable cable alternatives to ATHM. They have to move fast. Profitablility has to be sacrificed in favor of market share to play this game now. But, as I said in another post, I think they can do it. My money is on AOL, YHOO, ATHM and MSFT as the major players in the future. --Dave