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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Bob Trocchi who wrote (2673)	2/10/1998 8:30:00 PM
From: Bill Wexler	Read Replies (1) \| Respond to of 18691

I still stick by my theory. The growth in AOL ad and commerce revenues are extremely significant compared to Yahoo's last showing. I think investors will start getting the impression is that AOL is the TRUE "internet media" leader and reshuffle positions accordingly. AOL is becoming Microsoft to Yahoo's Borland. True, everyone "in the know" likes Yahoo's web site better, and uses it frequently; however, just like Microsoft, AOL knows how to make money by appealing to the mass market and establishing a virtual monopoly, but just like Borland, technical superiority will not win this war. I still say that if the market continues higher it may be interesting to 1) Sell AOL puts 2) use the proceeds to buy YHOO and LCOS puts. Remember, Yahoo recently announced that it was getting into the ISP business with MCI. Considering that AOL is kicking MSN's butt, I think that investors will now think twice about paying 25% of AOLs market cap for a venture that most likely will fail in light of AOL's seemingly unstoppable momentum and brand recognition, and the fact that AOL is growing rapidly into media space at a rate that makes Yahoo pale by comparison. I think you finally have the "monkey wrench" in Yahoo's momentum. Most of us have been wrong all along about AOL, but I think that time will prove us out about Yahoo. Ironically, I think we have just seen the turning event that will help out the short cause on the latter. By the way, I know think that targets for $150 a share may now be conservative. To go a little bit further with the Microsoft/Borland analogy....I see a very similar situation developing in AOL and YHOO to MSFT and BORL in 1990 - 1992.