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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: MW who wrote (5138)	10/21/1997 12:23:00 AM
From: Investor-ex!	Respond to of 13594

Hi MW, <<While there will be plenty of ways to use the internet free I maintain that there will be a big business out there for a co. that organizes the content well as well as provides content of its own.>> I would like to suggest that even the organizing of content may be something of a dead end, vis-…-vis ad revenues. I see the Internet eventually turning into a series of (mostly) free "best of breed" sites (sort of like SI already is <g>), each competing to establish and maintain an audience. Any decent search engine will be able to point you to these sites with minimal effort, and the variety available will boggle the mind. In fact, Yahoo may already doing this, both as a top-rated search engine, generating ad revenues for the short term, and as a specialized content provider (news & quotes), generating ad revenues for the longer term. Yet they don't have any of the baggage of once being an on-line service provider and having to cover up those tracks or of once being an ISP and having to cover up those tracks. At best, the search engine folks will be able to flash a few ads at you on your way to where it is you are going. Eventually, after the novelty of the Internet wears off for the majority of netizens, people will browse somewhat less, and visit their usual haunts more often for work, play, info, whatever. It is these "usual haunts" that will be in the best position to pull in ad revenue, if they so choose. But they will have to quickly find a proper balance between ads and content, or they will lose audience share to a competitor site that isn't quite so annoying. A "best of breed" situation demands specialization. It will be very difficult for any one entity to successfully aggregate, much less originate and maintain this level of quality in more than a very few categories. The Internet is not TV (yet, thankfully). It is not limited to but a few mass appeal channels, take it or leave it. The whole channel approach in IE4.0 is absolutely ridiculous. Who wants it? That's the TV model, and we all know where that would lead. Been there, etc., etc. I suppose for the time being, AOL could get away with throwing different content providers under one roof, but sooner or later the really good ones will realize they can save their nickel and do without AOL. On the other hand, there will likely be challengers to the superior content sites (any decent business will draw imitators bent on earning ad revenue too, plus product sales, plus??), so maybe these challengers would strike up agreements with AOL, just to get established. But once established, bye-bye. In fact, I think we are already sort of seeing this with the second (third?) tier travel agency AOL recently partnered with. Of course, these lower tier players will not be likely to produce a whole lot of revenue for AOL, but who knows. I certainly don't. I can only imagine some likely trends and run them through the "its only business" and "human nature" modules this planet comes equipped with and arrive at some probable outcomes. ~:)

To: MW who wrote (5138)	10/21/1997 4:59:00 AM
From: Yikes	Respond to of 13594

MW, I will Stick My Neck Out! I shorted AOL at $82 9/16 on 10/14/97. But I am looking at the charts carefully so I could write puts and buy protective calls accordingly. The idea is to collect option premiums for insurance until the price breaks the upward trend line. I suspect that is why the institutions stayed with AOL for so long. From the plot of 50-day moving average, AOL never crossed the MA except late August just prior to the WorldCom and CompuServe announcement. I believe without that announcement, AOL would have reverse the up trend. Next time it will not be so lucky. Yikes