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

To: Brent D. Beal who wrote (6502)	12/18/1997 12:44:00 PM
From: Eric Klein	Respond to of 13594

Ad revenue, what ad revenue? From today's Wall Street Journal: Leading Web-Ad Seller Says It Sees Red Flags It's one of the Internet's most vexing dilemmas: Despite the Web's explosive growth, on-line advertising isn't paying the bills. Now there's new evidence that any payoff from Web ads remains years away... With Web ad revenue continuing to disappoint, some observers are starting to question whether it ever will be the Web's economic foundation. Talk is growing that on-line shopping and other commerce, not ads, will finally make the new medium profitable. To make matters worse, many media buyers say the price of Web ads is falling due to heavy discounting by big sites and competition from cut-rate space sold by companies such as FlyCast Communications Corp., which auctions off the thousands of unsold ad spots that plague Web sites. Here's the link for those who have a WSJ subscription: interactive.wsj.com.

To: Brent D. Beal who wrote (6502)	12/18/1997 1:07:00 PM
From: steve lipson	Read Replies (2) \| Respond to of 13594

Seasons greetings to you as well Brent. I was only trying to share some heart-warming stories for the holidays. Unfortunately, I can see your mood is much too sour to be cheered in that way. Have you considered therapy? It might help you work out some of your frustrations about having failed so utterly to predict AOL's price movements despite your unbelievably thorough analysis of its P/E (it's like really, really high man) combined with your keen grasp of investment and business history (once there was a tulip mania, I'm sure this is the same thing happening all over again). In further observance of the season I have a parable for you. Brent (not his real name) bought a lotto ticket. The jackpot was to be a $1 million. When the lotto drawing started the first number picked matched one of the six Brent had picked. So did the second number and the third. Then the fourth and fifth numbers were picked, and they too matched those on Brent's ticket. At that moment Steve looked over Brent's shoulder and saw what was happening. That's some ticket you've got there, Steve said. If you want to sell it before they draw the last number I'll buy it from you for $100. Brent thought and thought. How could a ticket that once cost a dollar now be worth $100. I know, he said, the earnings must have increased by a factor of 100. So he asked Steve, did they increase the jackpot of this drawing to $100 million. No, Steve said. Brent got out his calculator to figure out the P/E if someone was willing to pay $100 for a lotto ticket that at this moment wasn't earning anything -- since the drawing hadn't even been completed. The numbers went right off the screen of his calculator. That's it, he thought, that guy must be the biggest idiot in the world and I'm too smart an investor not to take advantage of that. So he sold his ticket to Steve.