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

To: puborectalis who wrote (15457)	5/6/1999 11:00:00 PM
From: nokomis	Respond to of 41369

Having read all the news releases and postings re AOL and T tonight, I think it would be prudent to transfer out of T and into AOL if for no other reason to be on the winning side of a momentum play..at least until the dust settles - or AOL makes their anticipated strategy statement (whichever comes first). Interesting stuff...(and I made money on T yesterday).

To: puborectalis who wrote (15457)	5/6/1999 11:46:00 PM
From: Rusty Johnson	Read Replies (1) \| Respond to of 41369

'AOL Has to Do Something Quickly' Business Week Online Passing on MediaOne could hurt its Internet-access push For America Online Inc., the nation's premiere online service, the coming era of broadband communications represents both a fantastic opportunity--and a grave risk. If it can gain access to high-speed broadband lines, it can start offering all sorts of new digital fare. On the other hand, if it can't move to broadband ahead of competitors, it could start losing the 17 million customers who for now are willing to put up with poky dial-up connections and conventional online fare. That's why AOL's CEO, Stephen M. Case, pounced when he saw that AT&T was trying to trump Comcast Corp.'s bid for MediaOne Group, an Englewood (Colo.) cable operator. By teaming up with Comcast in a sweetened counter-offer, the online service could get a toehold in the cable industry. But AOL got cold feet and backed out even before AT&T clinched the MediaOne deal. That sent AOL's stock tumbling 4.5%, to $127 1/8 on May 4 before recovering slightly on May 5. ''This is a blow to them,'' says Michele Pelino, an Internet analyst at Yankee Group. Adds Miran Chun of ZD Infobeads, another market researcher: ''AOL has to do something quickly. You can't be a laggard in this space.'' ''INFLATED PRICE.'' Suddenly, the holes in AOL's strategy are out in the open. Without a cable deal, AOL is in danger of being late to the broadband future. For now, it will rely on local phone companies to supply high-speed links through their digital subscriber line (DSL) technology. But that technology isn't nearly as widespread as cable modems, which are available to some 10% of cable subscribers. And it doesn't look as if DSL will catch up soon: According to Yankee Group, there will be some 4.3 million cable-modem subscribers in 2002, vs. 2.7 million DSL users. AOL President Robert W. Pittman says the company backed out because it wouldn't have been able to generate adequate returns from its investment. ''We weren't willing to pay an inflated price,'' he says. But analysts say AOL--with just $2.7 billion in cash reserves--did not have the wherewithal to take on AT&T, which has inked a cash and stock deal. ''They didn't have the bargaining power to be a dominant force in these negotiations,'' says Abhi Chaki, a broadband analyst at Jupiter Communications. AOL insists that its current plan to pave the way for high-speed access is working. It has already teamed up with Bell Atlantic Corp. and SBC Communications Corp. And Pittman argues that since the Bells and the cable companies are selling their services in the same markets, it won't matter to the consumer who provides their speedy access. More deals will be announced with Baby Bells in the next few months. But the cable route to broadband service has more advantages than simply a headstart. Internet-over-cable service costs about $40 a month, vs. $50 to $60 for the Bells' DSL service. If it takes too long for AOL to jump on the cable bandwagon, ''their opportunity to capitalize on their brand may have gone,'' says Chaki. And, until it nails a cable deal, AOL may be stuck with a huge disadvantage: The companies that offer cable modems usually bundle them with a service such as Road Runner or At Home. Customers who want AOL, too, now have to pay a monthly fee on top of that. AOL is pushing Washington to force cable companies to provide equal access to high-speed lines, and Representatives Bob Goodlatte (R-Va.) and Rick Boucher (D-Va.) were set to introduce such a bill on May 6. AOL does have one compelling advantage: 17 million subscribers. ''AOL is still in a good position to find broadband distribution over cable,'' says Cynthia Brumfield, president of Broadband Intelligence Inc. ''Any cable operator would be thrilled to offer AOL service through its pipes.'' But for now, with AOL dealt out of cable, that thrill is gone. By Catherine Yang in Washington, with Heather Green in New York and Andy Reinhardt in Silicon Vall

To: puborectalis who wrote (15457)	5/6/1999 11:47:00 PM
From: Rusty Johnson	Respond to of 41369

How AOL Plans to Fight Back Business Week Online BUDDY UP WITH THE BELLS AOL will continue partnering with the Baby Bells to offer fast Internet access through the phone companies' digital subscriber line (DSL) technology. AOL has deals with Bell Atlantic and SBC Communications. MAKE A CABLE CONNECTION AOL will continue to seek cable allies who would offer the online service via speedy cable modems. AOL figures cable companies need AOL's 17 million subscribers to profit from their fast Web connections. RELY ON THE KINDNESS OF CONGRESS AOL will press lawmakers and the Federal Communications Commission to require cable companies to give all Internet service providers access to their high-speed networks on a nondiscriminatory basis.