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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Jing Qian who wrote (6455)	3/22/1999 4:15:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 29970

Is such a merger desirable? It is definitely getting into regulatory issues. Is it in Comcast's bigger interest to present a better content under the auspices of TWX or under the auspices of ATT's ever increasing control over ATHM? Comcast and others partners may jump as the FCC phone drag implications hit cable company bottom lines. Co-carry telephony and broadband has negative effects for cable companies even though they're getting a cut of the thin margin telephoney action. T forces ATHM to co-carry, but it remains an option for Comcast if they bust loose. It is better to wait and let telephony become established since providing it after the fact is not an issue. The right action is to rush in and grab as much of the broadband market now as possible. T/TCI has the lion's share and so there is plenty of incentive to jump so your broadband growth isn't inhibited by subservience under the cable partner agreement. If I were Comcast I would jump even if it meant breach of contract and in this case, that's a very big deal. The thing is that jumping and grabbing UMG has so much potential that it is worth it. That's why I have stated repeatedly that RBOCs would be buying cable companies. Comcast may have a concept where they see themselves as providing both services and giving the consumer choice. It is a good question whether that can be done under the cable partners "exclusivity" clauses, but the deal may not close until after the clauses expire. ATHM has been bid up on expectations, but a development like that would be a negative expectation because it dilutes what they would have gotten from Comcast anyway. Comcast has a small stock stake in ATHM and ATHM is not largely impacted by the loss of some market under such a scenario, but it sets up a precedent and shows that there isn't anything necessarily unique about the ATHM arrangement. Rogers has already moved somewhat in a similar direction. The cable companies have to look at it as if they were TCI, but independent of ATT and not a recipient of what ATT might do as far as capital expenditures go. They have to fend for themselves. Accordingly, the bigger cable companies should be looking for the possibility of doing a deal with other large interests like RBOCs.