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

To: Pancho Villa who wrote (7169)	2/9/1998 3:17:00 PM
From: Keith J	Respond to of 13594

From briefing if no one else has posted: <<AMERICA ONLINE INC. (AOL) 106 1/2 +8. Investors are reacting favorably to the news announced today by this leading online service provider that it plans to raise its monthly fee for unlimited use for its services, including Internet access, by $2 a month to $21.95. Given the movement in the stock, it appears that investors are very confident that the company will not have any problem raising prices and that many of its current users will pay the higher price. With more than 11 million subscribers currently signed-up for its online service, the company plans to utilize the added revenue for funding continued improvements to its product offerings and network. According to AOL, the average monthly usage has risen from 7 hour per month before it changed to a fixed-amount pricing method to 23 hours per month. To AOL, this suggests that it should not have much of a problem increasing its monthly fee as users have grown accustomed to having unlimited access to the Internet and prefer to keep their current e-mail addresses and pay the higher price than make a change to a new access provider. Hence, the company is comfortable that the fall-out form the price increase will be minimal, allowing AOL to raise revenues, although earnings in fiscal 1998 ending in June are not expected to be impacted due to its April implementation. The stock price move comes a day before AOL reports its fiscal 2Q results. Already Cowen & Co. is making positive comments on the proposed price hike and has raised its price target from $105 to $150 a share. According to First Call, AOL is expected to have earned $0.16 a share, versus year-ago loss of $0.60 a share.>> You know, could be that increased use of AOL for Christmas shopping et al (which also raised page view at YHOO and XCIT) could have made costs go up more than expected. Don't know about sales of Christmas items on AOL though. BTW, one of the AOL Motley Fool posters I know indicated he was going to kill his account already. KJ