Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: tang who wrote (4464)	2/6/1999 2:39:00 PM
From: RTev	Respond to of 41369

somewhere in the future AOL will team up or being bought by some phone companies to offer free dial-up and collecting fees from ads I wouldn't be surprised to see something like that eventually, but I suspect it would only come when the utility model of AOL's now-multifaceted business model had just about run its course -- when AOL's prime business had moved toward a different path. For now, though, AOL seems to be doing just fine selling connections and collecting on ads. AOL is the only one of the private networks that has survived competition from the internet. The others -- Compuserve, Delphi, Prodigy, MSN, GEnie, and a dozen others -- are either gone, subsumed by AOL, or insignificant afterthoughts. The private proprietary network is still vital to AOL's business since it provides both the subscription revenue stream and the "eyeballs" for advertising, but the company seems to be building its future in different ways. One problem with the utility model is that it's very expensive. For every new user added to AOL, they need to have available a modem and a phone line. They also need to be sure their servers in Virginia can pump out the proprietary AOL-only content fast enough that the user won't become frustrated. On top of that, they have to be able to pull in and pump out content from outside their net: from the internet. That's all working for now, and they might just stick to that path forever, but it sure does look to me like AOL is building a business that could eventually flourish without the constant capital costs of maintaining and upgrading the private network. But before that happened, they could pull the last penny out of their old system by giving it away to users' "eyeballs".