Report Of Slow Net Usage Not Good For AOL
According
to Nielsen Net Ratings, Internet usage among
US households has slowed dramatically. At first, the new online users’ growth of
16% might seem robust, but that would be before you compared it to a 41% growth
rate from the same time period last year. There were other tidbits in the report
that, on the surface, seemed bullish, such as the fact that 14 million more
Americans accessed the Internet last month than did so at this time last year,
but what was damning, especially for AOL Time Warner
(
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PowerRating) was the pace of growth has flattened
considerably.
As most of you remember, the Internet and its clicks and mortar backbone were
the new paradigm. You had to create new metrics to measure these beasts because
the “old standards†just didn’t apply. Unfortunately for those companies,
the more measurable they became, the more the effects of economic gravity
weighed on them. In other words, once you could actually touch and feel, the
mystery was gone and the normal rules applied.
Nobody knows this hard fact better than AOL shareholders, as they’ve seen the
value of their holdings drop by 14% since August 3. The puts
continue to draw interest as traders in the pits and up on the institutional
trading desks seem to be betting on a continued slide.