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

To: Investor-ex! who wrote (6115)	11/29/1997 8:56:00 AM
From: Ted Murphy	Read Replies (2) \| Respond to of 13594

I'd buy AOL before I'd buy YHOO, EGRP (that one's close), AMZN, XCIT or LCOS. How's that for fancy footwork on the investment merits of the company? Seriously, my note to this thread was on AOL's future prospects vis-a-vis the Internet, which are strong, rather than their admittedly sky high valuation. Making a bear case for the company is legitimate, but not because of their product relative to other cyber offerings. AOL has a good product with great mindshare, and they will be leading participants in any revenue growth from the Internet over the next ten years. You realize the strength of their product by signing on through a T1 line and comparing the frission and usefulness from their proprietary site to websites on the Internet. AOL's proprietary product could become a website very easily, if AOL wanted to put the effort into it. Six months max, and you could sign in from the web to an identical offering in HTML. AOL hasn't done this because they didn't want to lose momentum in subscriber growth -- short sighted in my opinion. As the ANS sub is spun off to WCOM, they'll have less reason to drag their feet. The major new channels from Greenhouse are, of course, websites. Will people be willing to pay extra for AOL's content? Probably not, but I think you're way underestimating the potential for ad revenues. NBC, for example, seems to pull down more than $5 billion in revenues annually, with over $1 bn in profits this year. The overall pool of ad revenues is huge, though mature, and the Internet will take share. I may be a little biased, because my focus is on financial sites on the Internet, and the ad picture here is particularly strong. Look for SI, for example, to be bringing in $600,000+ a month on ads in 1998. I'll bet quote.yahoo.com is 30% of YHOO's ad sales, while providing maybe 10% of their page views. Total guesses on my part. Ted.