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

To: CGarcia who wrote (20489)	6/5/1999 6:36:00 PM
From: Benkea	Respond to of 41369

CGarcia: "It seems that may indicate alot of AOL customers remain loyal regardless of cheaper services elsewhere, no?" 1) With ATHM and Roadrunner only having 500k subs with tons on backlog for install, it will be a while before those converts start to make a noticeable dent on AOL's sub base. 2) DSL is just rolling out as well. It really is a no-brainer for AOL users who have learned the web outside of AOL's "channels" to convert, cut loose the extra phone line, and pay the same for faster, more reliable service. AOL is where it is because it sent easy to use and install floppies and CDs. When these machines start coming with cable or DSL modems and the same easy install to your cable co or rboc, I don't think you will see so many people willing to pay MORE for AOL. I could be wrong, but no one knows yet. I think the lack of alternative choices in vast locales to vast #s of users has made this a non-issue, SO FAR. At $130 bil, that is not a risk I would be willing to take. On top of that, AOL is now in a dog fight with its' arch rival MSFT who has now teamed up with the "other monopoly", and I think they are both pissed (not to mention well funded and well connected). If you said here is AOL at $70 bil (max) and here is ATHM at $10 bil, then it might be a better risk/reward scenerio due to AOL's lead and current profitability. I will say that the AOL PC bit is kind of spooky as an ATHM shareholder. I will say this, a month or two ago before AOL crashed, everyone thought AOL would crush everyone. A month or two ago, everyone thought ATHM would crush everyone. Suffice it to say, the action in both stocks (which is VERY related to broadband) makes clear that NEITHER is a shoe in for #1. But AOL has picked its' fight against some very serious companies. MSFT has the dough and T has the dough and connections. The gov't WANTS T to win this thing so they will provide competition in local telephony to the RBOCs. Also, DO NOT underestimate the power of T's bundling of local and cel phone, pager, long-distance, cable TV, high-speed net access service all on one very very reasonable bill. Are yal aware that T NOW offers customers a 3% cash back reward for ALL purchases on its' AT&T Universal Visa/MC when you have certain of T's services? I will also say that AOL is very wise to hook up with satellite and DSL while it cries to the gov't for entrance into cable. ATHM has cable and that is it. However, T has WorldNet and MSFT has MSN and ATHM has XCIT. There have been press releases lately which clearly show ATHM/XCIT's intention to go into AOL's backyard, dial-up! Merging WorldNet, MSN & ATHM would go along way to making AOL shareholders a bit nervous. I have spent much time in the last several hours on as many ATHM and AOL forums as possible as Friday was not a very pleasant SURPRISE. Arguments are very well reasoned and persuasive in both camps. Thus, I really do understand why so many AOL shareholders also own ATHM and vis versa. However, AOL's market cap just doesn't make that kind of hedging smart for me. That said, I am strongly rethinking my earlier decision to add to ATHM here (I left at 2:00 on Friday so didn't get a chance). Good luck to all of you, really. And thanks for the informative posts.