Latest cyberdeal seems to have room for two winners

Article Abstract:

America Online and Worldcom seem to have reaped the most short-term benefits from the Sep 9, 1997, three-way transaction that also involved CompuServe. America Online should position itself as a legitimate media company that can increase its revenue through advertising and electronic commerce. Around 15% of America Online's revenue is currently derived from advertising and electronic commerce, compared to nearly 0% in 1995, but the company envisions reaching a 50% total. Adding 2.6 million CompuServe customers would swell America Online's leading on-line service subscription total to 9 million. Forrester Research analyst Kate Delhagen said America Online's assertiveness and growing subscriber base would attract larger advertisers. Worldcom stock rose significantly, but not as much as America Online's stock. The deal calls for Worldcom to pay around $1.2 billion in stock for H&R Block-controlled CompuServe. Worldcom then would sell CompuServe's on-line service to America Online for the equivalent of $250 million.

On-Line Information Services, Videotex & Teletext, Mergers, acquisitions and divestments, Online services, Internet services, Company investment, Investments, Online information services, Information services, WCOM, Information services industry, MCI Inc., Online information service, CompuServe Corp., CSRV

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America Online reports good quarter and new members

Article Abstract:

AOL has reported quarterly profits and a rise in membership for its first fiscal qtr, ended in Sep 1997. The ISP saw a 49% increase in revenue, totaling $521.6 million. AOL stock rose 16 cents a share, to reach $19.2 million. During the first fiscal qtr of 1996, AOL's stock slipped $3.80 a share and the company lost $353.7 million during a restructuring of its business model and a strategic change it receiving revenue from electronic commerce and advertising rather than monthly subscriptions. The ISP gained 821,000 new subscribers during its first fiscal qtr. Analysts report that advertising and electronic commerce sales were down from the Jun 1997 quarter. This weak spot was explained by AOL's chmn, Stephen Case, to be the result of more conservative bookkeeping.

Finance, Internet service providers, Internet service provider, Company sales/revenue, Company sales and earnings, Company earnings/profit

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