reinharden

Internet Still Offers Abnormal Positive Returns

AOL isn't *really* an Internet company. It's original value was that it aggregated a bunch of dial-up customers into a proprietary walled garden. Eventually it opened the garden gates so that those customers could make it to the Internet.

AOL looked to partner with media companies because it knew it wasn't a media company and thought it needed to become one to grow/sustain the business.

Unfortunately, AOL and TW never really combined forces after the "merger". And AOL became increasingly less relevant as it was unable to hold on to its dial-up customer-base as cable and DSL and FioS all came along to take their customers away.

Now AOL is really just a bombed out shell of a company that doesn't know what it is...


What really is an Internet company?

Facebook, MySpace, Twitter, et al, at the end of the day, are simply websites with some users. It's not clear that they've any particular intellectual property providing a moat around their businesses.

CSCO and GOOG are definitely Internet companies. Without the Internet, they don't exist.

Yahoo! isn't sure what it is (it was almost a media company). MSFT wants to be an Internet company, but they're not sure what that means. AAPL is maybe on the verge of becoming something as yet unnamed (but who knows how that'll turn out).

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