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AOL? Seriously?!?
Old 09-06-2011, 10:26 AM   #1
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AOL? Seriously?!?

I can't for the life of me imagine why a private-equity exec would be drooling over the prospect of "managing declining cash flow".

Why Private Equity May Dial Up AOL - BusinessWeek

I especially can't imagine why they'd get excited over managing the demise of dial-up.

Quote:
AOL’s access service had 3.4 million subscribers as of June 30, down 23 percent from a year earlier, according to regulatory filings. The business will generate about $1.5 billion in earnings before interest, taxes, depreciation, and amortization from 2011 to 2013, Sinha estimates. So a private equity firm could offer $1.5 billion for the access business knowing that there would be enough cash flow to pay off the cost of an acquisition within three years. “Everything after that is pure profit,” he says.
“The entirety of AOL is more compelling for private equity today, whether to take it over or buy it and split it up,” says Clayton Moran, an analyst with Benchmark, a research and investment banking firm in Boca Raton. That’s because private equity firms can create a financial model based on the dial-up unit’s “manageable declining cash-flow story,” he says.
I wonder if Steve Case is still looking over his shoulder, reflexively dodging bullets...

Keep in mind that I'm not considering investing in AOL. I'm just surprised that Business Week was persuaded to publish this dreck.
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Old 09-06-2011, 02:30 PM   #2
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AOL? Still? The word "zombie" comes to mind.
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Old 09-06-2011, 02:39 PM   #3
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Could be a case of money out the wazoo: 3.4 million subscribers, most have their monthly bill auto-deducted from their bank account, half are over 70, don't recall they even have an AOL account, and never turn on their computer. Free money for the next 10-15 years?
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Old 09-06-2011, 03:22 PM   #4
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Could be a case of money out the wazoo: 3.4 million subscribers, most have their monthly bill auto-deducted from their bank account, half are over 70, don't recall they even have an AOL account, and never turn on their computer. Free money for the next 10-15 years?
Could be. My dad used AOL to the tune of about $15 a month. My mom is "cyberphobic" and never used it. When he passed away in 2005, she still had it active for three years before one of us helped her cancel it while visiting her. That would be about $540 in income for providing essentially nothing.
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Old 09-06-2011, 03:24 PM   #5
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My parents (we affectionately refer to them as the Havercamps) still insist on using AOL, laughably archaic, but I guess they have their subscribers. At least they're avid Internet users at 89 years old, not all bad...
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Old 09-06-2011, 04:07 PM   #6
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A friend works at a high tech company in the San Francisco Bay Area; he recently interviewed an executive from AOL who applied for a position in his firm, and this person mentioned that AOL morale was "in the trenches " at AOL.

FWIW.
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Old 09-06-2011, 04:12 PM   #7
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Hmmm...my 81 year old mom has been an avid AOL user for many years. She gets on line everyday for e-mail and stuff. She got used to AOL and tried another provider but went back to what was familiar. I'm proud of her for being connected but suspect there are many like her who stick with what they know.
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Old 09-06-2011, 04:44 PM   #8
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Hmmm...my 81 year old mom has been an avid AOL user for many years. She gets on line everyday for e-mail and stuff. She got used to AOL and tried another provider but went back to what was familiar. I'm proud of her for being connected but suspect there are many like her who stick with what they know.
I guess I'd say that *most* people that age didn't grow up in an era (or pursue a career) where they had to adapt and re-invent their technical skills every couple of years in order to stay out of the "dark ages" and stay current and relevant on their skill sets. I wouldn't expect someone in that situation to embrace the breakneck pace of technological change. Yeah, a few do, and I don't think there's too much cooler than geriatric cybergeeks, but those are definitely the exception rather than the rule.
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Old 09-06-2011, 04:47 PM   #9
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You don't have to pay a penny for AOL any more, if you don't want to use the dial-up services. If you can instead get online in some other way, AOL is free these days.
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Old 09-06-2011, 05:56 PM   #10
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My mom (82) gets online every day, and has been using AOL since day one, whenever that was...lol. Been close to 15 years, I'd say. She's not going anyplace...
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Old 09-06-2011, 08:29 PM   #11
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Originally Posted by ziggy29 View Post
I guess I'd say that *most* people that age didn't grow up in an era (or pursue a career) where they had to adapt and re-invent their technical skills every couple of years in order to stay out of the "dark ages" and stay current and relevant on their skill sets. I wouldn't expect someone in that situation to embrace the breakneck pace of technological change. Yeah, a few do, and I don't think there's too much cooler than geriatric cybergeeks, but those are definitely the exception rather than the rule.
I bet that's how stenographers reacted when the DictaPhone was invented.
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Old 09-07-2011, 11:34 AM   #12
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AOL also has broadband. Much like Earthlink where you subscribe with them but paid through local cable company. It's much like when MCI first came into telecommunication business where they lease from Ma Bell and provide a cheaper long distance phone services.

Many of AOL dial-up service subscribers are in the rural areas where they don't have DSL or Cable available for broadband. Just because you have copper phone line don't mean you can get DSL. I'm sure there are many older folks who didn't keep up with changes may or may not be using the service that subscribed but there is lot who don't have much choice in the matter. My best friend who's 82 years old still pay AT&T monthly maintenance fee of $9.95 per month for his long distance carrier but too stubborn to cancel. He don't make long distance phone call since he got his cell phone back in 2000. He feels loyalty to AT&T.

As for me, I steal my internet through unprotected Wi-Fi of my neighbors cause I trim fat whenever possible and don't spend money where I don't need. A penny saved today is a dollar payout during retirement.
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