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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: robert duke who wrote (3209)	1/24/1999 1:49:00 AM
From: musea	Read Replies (2) \| Respond to of 41369

Robert, I am embarrassed to say that in all honesty I don't have a good way of estimating earnings on AOL. Without getting overly technical, I usually like to try to project revenues, costs, margins and so on to come up with a number. But I have not been able to get a real handle on AOL's business, in part because it seems to change from quarter to quarter. If it were just an ISP, it would be fairly straightforward to project the size of its subscriber base and infrastructure costs and work from there. But for example AOL has seen an incredible surge in e-commerce last quarter as well. I don't know what AOL gets from the merchants and other businesses it hosts. So I have to apologize for not being able to give you numbers. But I suspect for various reasons that from the beginning of last quarter to the end, there was a larger gain in revenues than even the management thought at the beginning of the quarter. So if the analysts' estimates are based on guidance from the beginning of the quarter as might be reasonable to expect, then my SWAG is that there will be an upside surprise. Kind of a feeble response, but it's honest. And a lot of the reasons I have trouble analyzing the numbers are the same reasons I feel like AOL will be a strong company going forward - diversification of its core business, growth in subscriber base, economies of scale, increased clout. -musea