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

To: RocketMan who wrote (8240)	3/28/1999 7:29:00 PM
From: Vendit™	Respond to of 41369

A refresher course: Why are we here? I want to take you back for a moment. The year is 1992. Few have yet heard of the Internet, however there are many that are pointing towards online services as the future of computing. In this space, there are four companies, three giants and an upstart. The three giants all have large traditional companies backing them, Prodigy is owned by Sears and IBM, GEnie is owned by GE, and Compuserve by H&R Block. The other player is an entrepeneurial player known as America Online. While the online service players with the most backing fight internally to determine who gets the best content placement, AOL is out crafting deals with everyone willing. The providers with corporate backing also look for short term profits, AOL instead blankets the country with disks, forgoing any hope of near term profits. It's now 1998, and the winner in this game should be obvious. AOL last year purchased Compuserve. Prodigy is used by less people than Earthlink, and GEnie is out of business. What did corporate America learn from this exercise? Apparently nothing, if you look to the executives at Disney. Much has been made of Disney's investment in Infoseek. However, in the next few paragraphs, it should become obvious that this investment is a death sentence for an already struggling search engine. To begin, Infoseek is itself a dying portal. Last quarter 44% of their traffic was generated by the Netscape Netcenter site. This dependence on a contract that could be dropped at any renewal point is a concern in itself. Now that AOL has acquired Netscape it is a major red flag. AOL owns 10% of Excite (with warrants to buy more), one of Infoseek's major competitors. AOL's aol.com website search function is powered by Excite. It is quite obvious whom AOL wants to drive traffic to. In fact, in recent contract renogotiations, Netscape left their Excite contract intact, while raising the rent for Infoseek, and lowering guaranteed traffic. Secondly, Infoseek has the weakest offline branding campaign of all the portal players. Yahoo has been active in print and on TV. Excite is receiving plugs during Mastercard's holiday promotion. Lycos started a nationwide radio campaign. Where is Infoseek? Now, on to the Disney investment. Many large media players think that this will give Infoseek the marketing clout it badly needs. What it appears to do instead, is create a new Prodigy: a closed network favoring Disney content, Disney products, and Disney services. While a net surfer using Excite, Yahoo, and Lycos is assured that they will receive unbiased search results, and offerings from myriad advertisers, Disney has already admitted that Disney offerings will be highlighted in the most prominent locations. The ultimate free enterprise system doesn't fit the Disney model too well, and unfortunately Infoseek will be the one that loses the most. So what's a portal player to do? Look at the online gorilla, AOL. Consider a play with Excite. Avoid being onboard for another Prodigy story.

To: RocketMan who wrote (8240)	3/28/1999 8:16:00 PM
From: RMiethe	Read Replies (3) \| Respond to of 41369

The Skybridge uplink (2Mpbs) will be via an ultrasat (9" in diameter) and a sat card in the pc or set top box. The orbits will cover the globe, and will be circular (10 planes, 8 LEOs). I have seen the SkyCache model, but think the Skybridge model is more effective because of the 200 ground stations it will have to promote delivery to the end user. Ellipso I think is using sort of a Molniya orbit, where the sats hover over populated areas, true. But it seems that they have decided to perhaps modify that proposal because a Molniya orbit really does not get you to Latin America, as you know. America On Line is looking to make a major push in Brasil (a friend of mine there tells me that AOL is already sending out the CDs), and will be helped dramatically with satellite delivery since that gets rid of the problems about delivery where there is no fiber or copper, where fiber and copper can't go, but where there are populated areas. Also, in those areas AOL will be paying a lower price to deliver its content. As I said before, however, the Netscape portion of AOL for intranets throughout various parts of Latin America (the intranet capacity there is almost totally by satellite in some areas) is what is going to get a lot of push. These are areas where analysts have not figured the numbers yet. I see the numbers for AOL usage as rising beyond analyst's projections, and at some point I think the analyst numbers will be rising once the Netscape/intranet model in Latin America is worked out.