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

To: Jenne who wrote (13561)	4/28/1999 9:16:00 AM
From: Tunica Albuginea	Respond to of 41369

Jenne,Washington Post : AOL May Aid Comcast Against AT&T washingtonpost.com AOL May Aid Comcast Against AT&T By Paul Farhi and Shannon Henry Washington Post Staff Writers Wednesday, April 28, 1999; Page E1 America Online Inc.'s chairman suggested yesterday that his company would support Comcast Corp.'s bid for MediaOne Group Inc. as AOL seeks new ways to expand its high-speed access to the Internet. AOL's financial support could be key to Comcast, a Philadelphia-based cable TV company, if it tries to outbid AT&T Corp. for MediaOne, the nation's fourth-largest cable company. AT&T last week offered $58 billion for MediaOne, topping Comcast's month-old offer, which originally was valued at about $50 billion. MediaOne is desirable because it serves 5 million cable subscribers and its up-to-date cable systems can be outfitted to provide customers with high-speed connections to the Internet. MediaOne also owns 37 percent of Reston-based Roadrunner, one of two major cable-Internet access companies. Although Internet access is a small, money-losing service for cable companies now, many analysts suggest that it could grow into a multibillion-dollar business in a few years. Cable companies are racing regional phone companies to offer this service. Bell Atlantic and other phone companies are counting on a technology called digital subscriber lines to compete with cable in the high-speed race. AT&T, which already owns the nation's second-largest group of cable systems, would be even more formidable if it bought MediaOne because it owns the majority of At Home Corp., the leading cable-Internet provider. AOL and other Internet service providers are concerned that they will not be allowed to offer this service over cable lines, or that they will have to pay cable companies a steep price to use their networks. Both of these are potentially harmful scenarios for AOL, a company that now offers Internet access to 17 million customers over slower-speed modems and phone links. An investment in a combined Comcast-MediaOne would likely ensure cable-Internet access for many of AOL's customers. In an interview yesterday, AOL Chairman Stephen M. Case said his company was seeking multiple avenues for high-speed service. He added, "Some new possibilities have emerged over the past few weeks." When asked what, Case replied, "Well, MediaOne." AOL already has agreements to offer service over super-fast DSL technology offered by Bell Atlantic and SBC Communications Corp., the two largest regional phone companies. In an earlier conference call with analysts, Case strongly hinted that AOL was leaning toward supporting Comcast. He said AOL was "pursuing what will be a bigger and multifaceted effort" to ensure fast connections, although he was not specific. "We want to do something as soon as we can with as many companies as we can," he said. He added, "Things are getting interesting in that space. With what's happened in the last week or so, we're more comfortable than ever." Dulles-based AOL is part of a coalition that has lobbied the Federal Communications Commission to require so-called "open access" to cable lines, but has so far been unsuccessful. Microsoft Corp. and Comcast had no comment yesterday on a report that Comcast was also soliciting Microsoft's help. But analysts doubted that Microsoft would want to support one side because it would risk offending the losing bidder, which is likely to be a future customer for the software Microsoft sells. Microsoft owns a 10 percent, non-voting interest in Comcast following its $1.1 billion investment in the company in 1997. MediaOne also had no comment. Separately, AT&T Corp. said yesterday its first-quarter profit jumped 39 percent, excluding one-time items, beating Wall Street analysts' expectations even as its core long-distance phone business continued to slip. The company also said it formed a partnership with Nippon Telephone and Telegraph Corp. to provide data services. On Sunday, AT&T and British Telecommunications PLC said they would jointly buy 30 percent of Japan Telecom Corp. for $1.8 billion. Excluding extraordinary items, AT&T reported first-quarter earnings of $1.78 billion (61 cents), compared with $1.2 billion (46 cents) a year ago. Including the one-time items, AT&T's profit fell to $1.1 billion, vs. $1.3 billion in the first quarter last year. Revenue rose 6.1 percent to $13.6 billion. AT&T shares rose 6¼ cents to $53 per share. MediaOne lost 87½ cents to $81.25, and Comcast rose $2 to $66.25. In after-hours trading, America Online lost $9, falling to $153.

To: Jenne who wrote (13561)	4/28/1999 9:50:00 AM
From: John F. Dowd	Respond to of 41369

Jenne: Wouldn't it be odd to find AOL and MSFT on the same side through Comcast. Would this not really throw present anti-trust myth into the a cocked hat. My question is what is AOL going to help with? If they use their stock as currency they will suffer PE dilution-if they use cash they only have 2 billion. They will find themselves being sucked into the vortex of MSFT who holds the upper hand at Comcast vis -a -vis outside investors. This could be very interesting and might be the reason for the recent weakness inMSFT and AOL. Certainly it was not their respective earnings reports. JFD