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

To: Solid who wrote (26238)	10/25/2000 8:46:06 PM
From: gpowell	Respond to of 29970

I haven’t confirmed this with ATHM, but I believed the freebies are put down as a Sales and Marketing expense. This would explain the rising S&M expenses, while the subscriber revenue per subscriber has been constant. The lowering of the estimate is my estimate, not ATHM’s. The lowered estimate is definitely not attributable to the freebies. It is a result of a lower yield in ad/e-commerce revenue per subscriber. I justify this by considering that, pre-merger, Excite was earning revenues independently of @Home. Therefore, the ad/e-commerce revenue of the merged Excite@Home has been an aggregation of the revenue derived from the narrowband portal and the miniscule BB subscriber base. The logical result is that ad/e-commerce revenue is nearly independent of the subscriber base, as has been observed by TMFNico and others. Given the current trend of flat ad/e-commerce revenue of the dot.coms, I’m assuming the portal contribution will become inconsequential as ATHM adds more BB subscribers, so eventually the ad/e-commerce revenue will scale with subscriber count. If the proceeding can be believed, then we can go the extra step and reason that ATHM should eventually yield from ad/e-commerce per subscriber about the same as AOL, which, the last I checked, was somewhere around 25%. BTW, I like the idea of giving away the service for a period, but I hope they don’t drop the price. The freebie removes the risk for the consumer and the higher price implies that it is a premium service.