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

To: Czechsinthemail who wrote (5693)	11/8/1997 12:55:00 AM
From: craig	Read Replies (1) \| Respond to of 13594

IMO aol states the high sub #'s in order to lure more advertisers to its service. nobody really knows how they get the #'s....i guess we just have to trust them.(b.s.) -Craig

To: Czechsinthemail who wrote (5693)	11/8/1997 7:39:00 PM
From: jack rand	Read Replies (1) \| Respond to of 13594

>>How does AOL account for subscriber revenues? As with any credit card transaction, charging of the card is the revenue event. However, you raise interesting issue in that AOL does not disclose (as does Compuserve) balance sheet reserves for 'doubtful accounts' resulting from disputed/defaulted/fraudulent charges. Surpluses/deficits of actual bad debt versus the reserve established are moved to the income statement, impacting EPS. Thus, for example, if AOL over-estimates last quarter's bad debt by say $5 million, current quarter pre-tax increases by that amount.