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 : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (21531)	4/24/1999 7:21:00 PM
From: Bill Fischofer	Read Replies (2) \| Respond to of 74651

Actually AT&T's cable moves are brilliant and timely They were one of the dominant utilities of the 20th century and they are positioning themselves to be a dominant utility of the 21st. T used to provide dialtone. They will ultimately transform into a major provider of IP-tone, as will the "baby bells" and remaining independent cable companies. And they will be joined by a generous helping of wireless IP-tone providers as well. Remember, utilities provide essential services that everyone needs. This is a very good business as long as you recognize it for what it is and are structured around the realities of the business model. The major reality of the utility business is that it is a debt-service cash-flow machine with huge plant and customer service requirements. Neither AOL nor other ISPs are properly structured for this reality. T and its cousins are.

To: t2 who wrote (21531)	4/24/1999 7:23:00 PM
From: Sir Francis Drake	Read Replies (1) \| Respond to of 74651

t2K - actually, I think the argument is pretty simple. If I understand Bill, he is not arguing the AOL vs Yahoo models, but rather the very concept of any "fixed" porthole. But even if it is an argument between AOL vs Yahoo models, argument would boil down to "content". Actually, you bring in an additional twist, that it's the hardware provider vs AOL, or AT&T vs AOL. Unless the government legislates that AT$T has to be neutral, from a purely theoretical point of view, AT$T has an advantage. Imagine that content is equally desirable across all the models: direct providers, such as AT&T, MediaOne and cable in general, versus piggybacking ISPs such as AOL, versus no-hardware portholes such as Yahoo. Well, if the content is EXUALLY desirable, and absent government regulation, why wouldn't the direct providers be in the best position? They would provide the service - and hook you on to their starting point. Since the content in this scenario is no more desirable on AOL or Yahoo, why switch? Ergo - by sheer inertia, they win. Of course, the thing is, you can't guarantee content to be equally desirable. But here is the key - there is no reason to say a priori that AOL or Yahoo content has to be the best! What if one day AT&T is best? Seems to me, that's like arguing - in TV terms - that ABC will always dominate, or CBS, or NBC. If content is what decides - then one can only say, whoever has the best content wins - for the moment. The point however is more subtle - after all, it's not simply content providers. They are not all equal. AT&T (and other hardware providers) does have the initial hardware advantage - so it's AOL's and even more Yahoo's job to win the customer away with better content (and no guarantee that they will have better content). Initial inertia is a powerful advantage of incumbency. It's the incumbent's to lose. Obviously that doesn't mean that AOL or Yahoo are doomed, but the playing field is NOT level.