Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: craig crawford who wrote (7468)	2/10/1998 5:45:00 PM
From: yard_man	Respond to of 13594

AOL factoid: A stockholder who bought 1,000 shares for $11,500 at the company's initial public offering on March 19, 1992, and held the stock would, after March 16, 1998, own 16,000 shares valued at about $880,000 based on current prices.

To: craig crawford who wrote (7468)	2/10/1998 6:04:00 PM
From: S. M. SAIFEE	Read Replies (1) \| Respond to of 13594

Craig, How many subscribers are on free ride?? AOL still sends me free 50 hours discs once every two months!! Sorry but I bought Feb 110 puts at 2 1/2 thday. I see another OXHP in AOL. Striking similarities, rapid rocketing subscriber growth and then a bust out of blue. Reasons being very thin financing and poor balance sheet.

To: craig crawford who wrote (7468)	2/10/1998 6:26:00 PM
From: Andrew Shih	Read Replies (2) \| Respond to of 13594

The problems with AOL. There are two fundamental problems to look out for in AOL's future: 1) Heightened increase in competition 2) Increase in average usage. 1) While there is currently no competitive service for new users, AOL is probably one of the worst ISP as far as connections and quality of service. In the next year, Cable modems and xDSL will begin to emerge and become the connections of choice. Thus, the Baby Bells and cable companies are going to become the ISPs of note. In the next two years, AOL will need to slowly transform itself into a pure content player. There will no longer be any need to connect via modem. 2) The other fundamental problem is the cost of servicing 10+ million accounts. The average user usage rose from 21 minutes to 41 minutes a day. I can only see this increasing as AOL's user base becomes more mature and finds more uses for the Internet. What if this rises to 60 minutes a day? AOL's gross margins will fall greatly if this happens. Is $19.95 even a profitable price point? Mindspring is now posting profits, but obviously AOL can't support this price point. I personally use IBM Global Net and they will soon be moving to $19.95 for 100 hours a month. When cable modems and ADSL is common, and video/audio is broadcast over the Internet, who is going to stay with a 56K connection? -Andrew