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

To: Francis Gaskins who wrote (7920)	2/15/1998 4:24:00 PM
From: Steve Robinett	Read Replies (1) \| Respond to of 13594

Francis, <<AOL accounted for 13% of Micromuse rev. in Dec. 1997 quarter. Micromuse IPO up 50% last Friday.>> I may be missing the point. This says what about AOL? Best, -Steve

To: Francis Gaskins who wrote (7920)	2/15/1998 4:26:00 PM
From: Keith J	Read Replies (1) \| Respond to of 13594

Here's a couple items that I found on AOL. From Cowen update: <<So, for at least the next five years, WorldCom has agreed to be AOL's primary source of network capacity, at an average hourly rate starting around $0.30-$0.35 and declining over the term of the deal; though this range is a bit of a guess, we do know that the deal is much more favorable than the last re-negotiated Sprint deal (which we believe to be around $0.50-$0.60 per hour). As well, we know that the company expected to eventually achieve approximately this level of hourly usage cost on its own had it kept ANS, but now gets to lock that in without execution or capital risk.>> From AOL's 1st quarter 1998 Conference Call: <<We also, by the way, do sell a bring-your-own-access plan. We have done a number of tests with it at various price points, and it appears only a limited number of people are interested in this at any price. On the other hand, we are seeing our cost-per-hour decline: it was about 10% less in the September quarter compared to the June quarter. We also had an opportunity to manage and fine-tune our network operation. We expect to be able to manage our gross margins over the next couple of quarters. Our expectation is that they'll remain somewhere between probably 35% and 37%.>> Couple other points. 1st, is the XCIT deal does mean about $1 million/quarter in income. The Sept. quarter was backloaded with 3 quarters, that's why it was higher than it should have been. 2nd, it does appear that AOL "counts" a subscriber when they join up for a free month, and doesn't wait until they actually start paying. Interesting about the "bring your own access" quote. Others indicated they're only paying $4.95 for the BYOA (apparently got when the busy signals were a major problem). And now they price it at $9.95. Apparently, now they've decided to keep it higher so they keep subscribers using AOL as their ISP, instead of trying to lure other ISP customers to join AOL using the BYOA. Just some observations. KJ