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To: Mark Fowler who wrote (30545)	12/20/1998 9:39:00 PM
From: Glenn D. Rudolph	Respond to of 164684

The Internet Capitalist SG Cowen Internet Research 7 demands. As we are really seeing this month, if you build it, they will come and in time, come to shop. Company Watch America Online (AOL): That's 5 Continents Down, 2 To Go… AOL continued to execute nicely on its global strategy, teaming with The Cisneros Group (a Latin American media conglomerate with businesses ranging from television networks to grocery stores) to form a joint venture that will provide online services for Latin America. Like the other international deals AOL has struck, Cisneros will supply the cash ($100 million) and the local management and expertise, which means AOL's financial basis is zero and they do not have to consolidate the earnings (or losses) from the joint venture. An important bonus in this deal to create Spanish and Portuguese language content is the opportunity to market that content in the US to the growing Hispanic market. Recall that all international services are available at a few clicks to US AOL members. This could be an especially big win with advertisers who are anxious to reach Hispanic consumers in the right environment, a strategy that Univision, the Spanish language television station (which is owned by the Cisneros Group), has benefited nicely from. AOL Officially Confirms What We've All Suspected AOL released official figures quantifying much of the Street's optimism for the Web as a retailing channel this Christmas, especially for AOL. Among other findings: * AOL Shoppers Spending Nearly 50% More on consumer goods (toys and apparel are leaders) * 750k AOL members became first time buyers over the last two week period * AOL's Shopping Channel is attracting three-and-a-half times more shoppers than last year * 95% of AOL shoppers find online shopping easier and more convenient than offline (principally because of the 24/7 nature of the stores) * Top categories: toys/kids/babies (up +300% y/y); apparel (up 210% y/y); books/music; electronics/videos (up 230% y/y); flowers/candy/cards (up 275% y/y); department stores. * AOL holiday shoppers are making frequent online purchases (2 items every week) and spending more per purchase than last year (48% more on each purchase for an average of $54.00) As importantly, evidence that the merchants themselves have been pleased with their choice of partnership is also emerging: * eToys, the online toy store had 20 times the business from the AOL Shopping Channel this holiday season versus last year. * Eddie Bauer's site on AOL has experienced nice growth: they beat their December '97 sales number in October '98 * Garden.com's sales are up 500% over last year, and are increasing as Christmas approaches. * And our favorite; Omaha Steaks Internet sales more than doubled over the same month last year. Though much of this sentiment has been tacitly understood, it should certainly help investors feel more comfortable that, going into the final two weeks of the quarter, AOL is willing to share quantitative data about how well this important revenue stream is performing against expectations. This is as close as one comes these days to a positive pre-announcement.