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To: Stuart C Hall who wrote (3663)	12/30/1998 8:00:00 PM
From: trouthead	Respond to of 29970

I know I said eyeballs was a major factor in the aol nscp deal, but doesn't nscp bring more to the table than a website and a browser? Don't they have a lot of server tools for e-commerce and web hosting as well? I think that is where most of their revenue has been coming from even when they were charging for the browser. jb

To: Stuart C Hall who wrote (3663)	12/30/1998 11:54:00 PM
From: ahhaha	Respond to of 29970

Thanks for handling the four points. You did a good job. Some further considerations: The NSCP deal could be a major disaster for AOL. It is easy to associate AOL and NSCP because they are in the same business. As operating companies they are unassociated. AOL has to take on this unutilized programming organization and run it for profit. NSCP believed their management was the one of the best around and they couldn't make a dime, so how is AOL's management going do it? How can AOL engage the capabilities of NSCP's engineering abilities in scale to add to what AOL provides? An enhanced browser doesn't "grab eyeballs", and AOL's programming needs can be satisfied by a 90% reduction in NSCP's personnel. The alternative is to run NSCP as an independent division. NSCP is notoriously unprofitable and has no identifiable way to make a profit. This course is a major drag on AOL's earnings which would constrain their ability to develop broadband capability. When you consider why AOL would buy them, you are left with NetCenter. You hear a lot about "portals", and presumably NetCenter is a profitable portal, but as you state, they have no competitive advantage. NetCenter doesn't hold a brand and has little attraction. It has to be that AOL will add the attraction. They didn't need to buy the browser mfger just to do that. Why not simply make a marketing agreement? How about NETUX? AOL has a plan to displace MSFT in low end net OS. Even that is too risky because of the advent of enhanced WinCE in STBs. Maybe run NSCP like GE runs NBC. Then why bother with purchase? Purchase gives you control. The only thing to control is NetCenter, to control what is placed in NetCenter. Like you, I can't see how that generates revenues, and surely not the extra revenues that are implied in taking on NSCP's costs. I keep going round and round with this but I can't see any reason for this purchase. The believers are all hand waving. They haven't got a clue. They're just betting that big money is smart. When the market runs out of gas, unless this deal is fleshed out with some real meat, NSCP will be the best short sale since IBM.