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Technology Stocks : EARTHLINK (ELNK) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (2236)	1/13/2001 9:01:08 PM
From: Glenn Petersen	Read Replies (2) \| Respond to of 2553

From RedHerring.com: redherring.com THE MISSING LINK? Yes, Earthlink is an Internet service provider (ISP), and we all know that's a highly competitive business that has become increasingly commoditized by companies like Netzero (Nasdaq: NZRO) and Juno Online Services (Nasdaq: JWEB), which offer free Net access. But Earthlink, which has a market value of just $1 billion and trades at $7.97 a share, had about $750 million in cash as of September 30, which works out to $5.77 a share. The amount of cash the company has is actually 9 percent higher than it had at the end of 1999. And I do see some other positives that suggest maybe the stock has bottomed. Investors are continuing to fret about the outlook for ad-addicted Internet companies like Yahoo (Nasdaq: YHOO), Netzero, and Juno. Earthlink, however, is not dependent on advertising for its survival, something I think is often overlooked. During the first nine months of 2000, only 3.4 percent of Earthlink's total revenue came from what the company refers to as content, commerce, and advertising, while 84.6 percent of revenue came from narrowband access fees. Broadband access is also a small but growing part of Earthlink's business, with broadband revenue increasing 114 percent in the first three quarters of 2000 over the same period in 1999. Broadband revenue accounted for 5 percent of Earthlink's overall sales. And with the America Online (NYSE: AOL)/Time Warner (NYSE: TWX) merger set to close soon, the company stands to benefit in the latter half of 2001 as Time Warner will be forced to open its cable lines to Earthlink. Earthlink is already the second-largest ISP, with 4.6 million subscribers, and I think the fact that it is more immune to the dot-com advertising slowdown than its free-ISP competitors enhances its chances of surviving the shakeout.