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

To: Ralph E. Daugherty who wrote (13552)	2/13/1999 10:10:00 PM
From: PHarris	Read Replies (1) \| Respond to of 13594

Is this the beginning of the end? The Year 2000 problem might cause more worries for America Online than the company had expected. AOL's engineers have not yet determined how many systems are infected with the Y2K bug and only a handful of AOL's suppliers and partners have responded to requests for information, according to new financial disclosure documents filed this week. "The Company is in the process of asking its vendors, joint venture partners, and content partners about their progress ... but has received very few complete responses," said a document filed with the Securities and Exchange Commission on Wednesday. Further, AOL (AOL) reports that it began testing its hardware components -- such as computers, routers, and telephone equipment -- for Y2K glitches only last month, long after experts say the process should have begun. "If they finish the assessment and find out by some miracle everything was fine all along, they've escaped. But if it turns out they do have compliance problems, there's no time left at this point," said Ed Yourdon, author of two dozen books on software engineering and a Y2K consultant. Y2K problems are particularly troubling for companies that rely on computers as much as AOL, the world's largest online service. Manual workarounds are not a realistic option for an services running proprietary software. Last month, the venerable Prodigy online service announced it was shutting down because of Y2K glitches. Prodigy Communications said it decided to retire its Prodigy Classic service after 11 years because the clunky 1980s-vintage hardware and software was full of "spaghetti code." "The implementation of these Internet functions and technologies predate current standards and aren't readily upgradable," said spokesman Dan Levine. "It's not that we couldn't do it, but it's based on standards that are pretty cost-prohibitive." Prodigy has encouraged its 208,000 Classic customers to switch to the company's Internet service. Will AOL experience similar headaches? Don't bet on it, the company says. "We are in the midst of testing. We've encountered very few, if any, major problems," said spokesman Rich D'Amato. "We're pretty comfortable and confident that we've put into place the kinds of systems and task force that's necessary." He declined, however, to reveal what percentage of systems AOL has that might be affected by Y2K, and how many of those have been fixed. According to SEC documents, AOL has made scant progress in the last year. In February 1998, AOL said it had created a task force that was "currently in the process of completing its identification of applications" with problems. Wednesday's filing reports uses very similar language. "This Task Force is undertaking its assessment of the Company's compliance," it says. AOL says it expects to spend a total of $8 million on Y2K fixes and will have a contingency plan in place by July 1999. wired.com