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

To: RocketMan who wrote (5304)	2/20/1999 4:00:00 PM
From: stockman_scott	Read Replies (1) \| Respond to of 41369

FYI...from Robertson Stephens latest Web Report: AOL CONTINUES TO SET THE PACE -- AOLs stock has demonstrated remarkable resistance to the recent weakness in the group. The mass market continues to move online, with AOL announcing record subscriber additions of 1 million to 16 million members for the AOL service from the end of December to February 9, less then half of the quarter. For reference, AOL reported net additions of 1.6 million in the entire December quarter. While we should expect some seasonal dip in pace by summer, AOL‚s growth prospects, we believe, remain relatively open-ended, with more people worldwide spending more time at home and at the office on AOL services. BROADBAND POSITIONING---POLULARITY, POLITICS AND ECONOMICS -- For many years, most AOL members will be busy and happy on telephone lines. While greater consumer availability of cable modems may help spur the effective roll-out of broadband access, the cable companies still need to send a technician to each home, which remains an inconvenient hurdle. Still, AOL needs to establish broadband partners now or at least this year, in our view. The telephone companies have already acknowledged that AOL can deliver customers through an easier if not more economic route than trying to market independently. We expect more deals with telephone companies after GTE and Bell Atlantic to cover other geographies. In the meantime, AOL and others are putting political pressure on the cable companies, particularly at the local level, to require open access. Local franchise approval is required for the AT&T and TCI merger. Consumers have a history of demanding more from cable and using the power of local community politics. We believe consumers have more passion for AOL than MTV. E-mail is part of our daily lives while MTV is just for fun. We wonder if AOL could get lucky with its regulatory efforts, although regulatory debates could drag on for years. In the meantime, we fear AOL has made few friends among cable companies, with the possible exception of Time Warner. We expect cable companies will also appreciate the economic argument. Time Warner has offered access to its pipe for telephone service to AT&T, soon to merge with TCI, which owns part of access competitor @Home. Time Warner has its own online service, RoadRunner, but seems open to swapping it out for a bigger brand. We expect Time Warner is more likely to do an on-line deal with AOL, because it makes more business sense. Time Warner has valuable media content, which AOL can use. AOL seems likely to give a more generous cut of the revenues to Time Warner than to @Home. While the negotiation seems to be dragging, we have hope for a deal in 1999, with something possible sooner rather than later. It's curious that AOL's current market capitalization is greater than Time Warner's - at 85 Billion."