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

To: Eric Klein who wrote (5978)	11/15/1997 5:52:00 PM
From: Steve Robinett	Read Replies (1) \| Respond to of 13594

Eric, I think you're right about brokerages liking the idea of a name-brand internet play. Whether AOL can develop a viable long-term business model seems to me still an open question. Longer term, given a world with digital TV and more bandwidth, if AOL adjusts to that world and lets people download, say, movies or live events on a pay-per-view basis, that might help. If they can get the advertising model to work, that might help, though as someone on this thread pointed out, there are only so many good sites for advertising. If they can get online vendors to cough up enough cash, that might help. Without some dramatic change in their business model, they will wind up being a very large ISP with very thin margins, IMO, not a good place to be. Until that question about AOL's future direction is answered--megasales machine or gas company--the stock will trade at a premium, yet another triumph of hope over reason. It seems to me impossible to predict when we will know the answer. Best, Steve

To: Eric Klein who wrote (5978)	11/15/1997 5:57:00 PM
From: David Lang	Read Replies (1) \| Respond to of 13594

"AOL will be selling for $40. When, I don't know". ......when it splits 3 for 1

To: Eric Klein who wrote (5978)	11/17/1997 10:56:00 AM
From: The Duke	Read Replies (1) \| Respond to of 13594

>>I think that all the brokerage houses want to have a stock that they can recommend in the Internet sector. People are excited about the Internet, they want to invest in it. AOL is big enough that it can be bought by mutual funds. There are few other Internet stocks that are big enough to be bought by big mutual funds.<< Unfortunately, I think this is the post of the month. Combine AOL's size as you mentioned with the fact that it meets the Buffett criteria of being a brand name we all know like coke and gillette, and its beginning to sink into me that this dog of a stock is going to continue to soar until one of two things happen; either: A) The investment hype over internet stocks spontaneously dissipates. When this happens, the AMZN shorts are going to make alot more money then us, but oh well. B) Investment hype over the internet continues, but a clearly and concrete picture begins to emerge of what kinds of business models will be successful in this marketplace. IMO, this is where AOL really loses. Again unfortunately, this could take a very long time. I think everyone has the gut feeling that the internet will be a good place to make money over the next 50 years, but we also have the gut feeling that some fundamental factors have to develop before well have a good understanding of how this will work. comments?