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Time Warner Inc. Message Board

  • Direction_Finder Direction_Finder May 30, 1999 4:28 PM Flag

    Barrons was very positive about AOL

    in spite of their article being so negative about
    AMZN. The part of the Barrons article pertaining to AOL
    follows below:

    "When you command 10 million
    customers, then you become attractive to advertisers," says
    Ravi Malik, a portfolio manager at Froley-Revy
    Investment Co. "In the short run it's going to be volatile,
    but in the long run, I think Amazon is using the
    right strategy."

    This line of reasoning usually
    ends with Amazon being compared to America Online. The
    idea is that Amazon can increase its customer traffic
    enough to attract advertising dollars, just as AOL has.
    But there are some important differences between AOL
    and Amazon. First of all, AOL provides a service for
    which users get charged $20 a month. It also offers
    e-mail, which insures steady traffic and is a pain to
    change once a client's friends and business contacts
    have his or her address. Simply put, torpidity keeps a
    lot of customers coming back to AOL.

    AOL also
    has amassed what's considered to be the biggest
    audience of users on the Internet, 16 million subscribers
    in all. Amazon has only half that many clients, and
    most view the site as a retailer rather than as a
    source of information or entertainment. That's why they
    don't tend to hang out on the Amazon site for hours at
    a time the way they do at AOL.

    AOL also has
    amassed what's considered to be the biggest audience of
    users on the Internet, 16 million subscribers in all.
    Amazon has only half that many clients, and most view
    the site as a retailer rather than as a source of
    information or entertainment. That's why they don't tend to
    hang out on the Amazon site for hours at a time the
    way they do at AOL.

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