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Fate of America Online

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IS AOL TOAST OR NOT

  • Toast

    Votes: 76 65.0%
  • NOT Toast

    Votes: 41 35.0%

  • Total voters
    117
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God I hope they go bankrupt...

Tricking parents into sticking their kids with the ****ing slowest connection around with all that "Parental controls" and "You've got mail, dumbass!" garbage...
 
FleshEating Bob said:
God I hope they go bankrupt...

Tricking parents into sticking their kids with the ****ing slowest connection around with all that "Parental controls" and "You've got mail, dumbass!" garbage...

Now more or less everyone has broadband. Alot of ads on TV actually compare their service/price to AOL, saying how they are better (they are). All the majority of consumers know about computers is from ads and all. Back in the day, most of the ads on TV for ISP's were for AOL, but now, Optimum Online, Net Zero, MSN and all have more ads. Now people actually have alternatives, which people are told are better and cheaper, so AOL is suffering.
 
I really wouldn't mind if they crapped out, but seeing as they are still the proverbial 800lb. gorilla, I think they will be around for a while, albeit with much lower revenues.
 
Rabid Snail said:


Now more or less everyone has broadband. Alot of ads on TV actually compare their service/price to AOL, saying how they are better (they are). All the majority of consumers know about computers is from ads and all. Back in the day, most of the ads on TV for ISP's were for AOL, but now, Optimum Online, Net Zero, MSN and all have more ads. Now people actually have alternatives, which people are told are better and cheaper, so AOL is suffering.

Not true on all points.

While broadband has become more available its market penetration has stalled. Over two-thirds of internet users still connect with 56K, despite the growing availablity of broadband in rural areas and smaller cities and aggressive pricing and marketing. There is a much higher than expected rate of churn among broadband users, too. Aside from P2P programs there hasn't been a free killer high-bandwidth app to convince people to move up.

People have had ads and promotions crammed down their throat. Most notorious was the MSN and Compuserve "instant rebates" at your favorite electronics store if you signed up for four years of their service at a premium price. (I can't forget the NetZero/Juno/Blue Light spyware, too. That went over well.) Anyway, Joe Sixpack felt like he was being screwed. This has actually worked to AOL's favor. Hard as it is for us to believe, casual users honestly believe AOL does a better job of looking out for their interests than any other national dialup provider.

Why is AOL suffering? There are enough reasons to fill a whole post so here we go...
 
Hey fellas, know how when your girlfriend becomes an ex-girlfriend, and her true colors come out, the way that makes you hate all women for a while?

That's how the stock market feels about AOL/TimeWarner. It has become the whipping boy for all of the hype and idiotic promises made during the dotcom hysteria.

If you look at the fundamentals there is no reason on planet earth why this companies stock price should hovering around ten dollars a share.

And before we go any further, AOL/TW is not going to file bankruptcy. A stock price often reflects the financial health of a company, like American Airlines which is buried so deep in debt that it is on the verge of bankruptcy. But this isn't one of those times.

Last year AOL/TW lost four billion on revenues of 45 billion, and most of that was from a change in accounting rules that forced a lot of companies to change the valuation of something called "goodwill". Their revenues are down not because of AOL, but because of a slump in advertising spending that has hit the TimeWarner half of the company very hard. Not enough to cripple the company, however, and it shouldn't be enough to force the share price down to $12. Viacom, another media conglomerate with similar holdings, hasn't seen its stock price suffer nearly as much. Neither has GE, which has extensive media holdings through NBC and RCA.

The depressed stock price becomes especially confusing if you look at the AOL side of the business. Ad revenue has fallen for the ISP. But AOL makes money and has survived intense competition from other ISP's. Their customers are remarkably loyal. They haven't moved into broadband, but neither has MSN and broadband providers haven't exactly set the stock market on fire. Most that were in business two years ago aren't today.

So what gives? Steve Case showed incredible moxie when he announced AOL, not even twenty years old, was buying one of the oldest and largest media companies. He also did little to hide the arrogance in his voice when he talked up the synergies of the deal, how the "new media" would make the "old media" more profitable and vice-versa. He also did this just as the internet stock market bubble was launching on his final upward surge.

Case put himself, and his company, in a spot where if they didn't change the world and make more money than God in the process, the investors who bought AOL/TW stock would turn on them. Hard.

And that is what happened. AOL/TW is the biggest and best-known of the companies who inhaled the internet smoke. Investors are pounding their stock price like the posterchild that it is, despite the underlying fundamentals of their business. The company doesn't have a lot of debt, has the best-known brands in their businesses, strong customer loyalty, and when the ad market turns around it will make money by the gigabuck. The promised synergy hasn't worked, but the attempt hasn't crippled either side of the business.

But it won't do so together. My fearless prediction is that the AOL/TW merger is undone by the end of 2004. I also think a lot of people ten years from now will wince when they remember when the price was only $12. Intel at $18 won't make them feel good, either.




BHD
 
Lets look at the potential assets the company can spin off to reduce its curent debt load to manageable levels. AOL/TW has three sports teams(Braves, Hawks, and Trashers). Combined, they should bring in 500-600 million in cash to AOL. Thats without selling TBS, Turner South, and TNT with them for the broadcasting rights.

Next you have CNN which would be fairly easy to sell. Disney has interest every once and a while. That would be a fairly profitable sale.

TW Cable could be sold as well for a LOT of money to other companies such as Cox, Charter, etc.

You also have the music companie, the movie company(New Line which among other films has the LOTR trilogy), and other substantial holdings that would save it from bankruptcy. If push came to shove, it would easilly avoid Chapter 11. They are busilly fixing their problems and are not going to die at all. Their situation just isn't comparable to AMR or UAL.

What went wrong at AOL/TW was the AOL guys pushed the TW guys aside, and that meant that all of a sudden, an internet business was running a real business, and whoops. Now the TW guys are coming in and kicking some butt, and things will end up being ok. Its going to end up sord of as a GE/NBC relationship, they are the same company, but don't exactly "work" together if that makes any sense.
 
Don't get me wrong, I still don't like AOL, but imagine if they go under. Suddenly millions of AOLusers will signing up for accounts on your ISP. Just imagine how slow cable modems will get... And you can bet if AOL goes under other ISP's will jack their prices because all the users will have to go somewhere. But thats worse case, most likely they will be bought out, lets just hope its not by Microsoft or some other evil company.

-Rav
 
not nesscarly

some one will definetly buy them out or soemthing

they do have a pretty good infrastructure that another isp could put to uses

so its not like there just going to blow up
all the equipment will be used just not for aol
 
I feer this poll includes a bit of wishful thinking... AOL sucks but a company with that amount of market penetration is not going to go down easy.
 
It won't be an easy fight, but together we can kill the grease in the corporate computer machine called Microsoft, AOL/TW, and Intel! :eek: :p
 
How could AOL be going down. There are a million people out there that are computer illiterate. They pay $20+ for dialup that is slow. They own an instant messanger program that has even more members.
 
Personally I can't stand AOL, I think they are the anti-christ of the computer world. That said stock prices really are only part of the picture when talking the success of a company. All technology stocks have taken a beating in the past year or 2. I would say thats by far the least reliable way of predicting how healthy a company is.

I do think they have issues though. They were too slow to get into the broadband market and eventually as more and more people switch to broadband they will lose business. Alot of people forget just how massive of a company they are though. There is more to AOL than just an ISP. The magizines, tv stations, movie studios etc that they own is just mind boggling.
 
My fear is that, if AOL goes under, this will show that they were not charging enough for their service, then other ISP's can inrease their service fees. I was on Cable was paying 82.00US/month...It went up $10.00US per year for the past 3 years :mad: and they added a $10.00 Access fee 2 years ago:mad:...Now on ADSL 1.2M/384.

BTW I dont like AOL :D Never did never will. :cool:
 
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DIE AOL SCUM DIE I SAY!!!!!!
I would think everyone in their right mind would stay away from aohell, that prog is for newbies who don't know crapola about anything and just want e-mail and that stupid saying "you've gone to AOhell"
 
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