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

To: Investor-ex! who wrote (8681)	3/9/1998 9:55:00 AM
From: Craig Richards	Read Replies (1) \| Respond to of 13594

Although it's not clear to me if $20/month flat rate internet access is profitable or not, I do know that AOL has higher costs for its access than pure ISPs. This is due to all of the content they provide, not to mention the lame way they route all AOL traffic through their servers in VA. So if someone signs on to AOL and visits Yahoo!, the traffic first goes through AOL's servers in VA, then the request is forwarded to Yahoo!. The return trip goes back the same way. So not only does the customer get really bad performance, but AOL needs to continually upgrade its servers and routers to be able to handle ever increasing amounts of traffic. These are 2 of the disadvantages AOL faces with their proprietary service (poor response and added equipment expense.) Another longer term problem they will face is cooler content and applications are more likely to be developed using industry standard protocols instead of AOL proprietary protocols. This means ISPs will be providing better access to the best on the web in the future.