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America Online has one more year to pull itself together. After that, it may be lopped off from the AOL Time Warner conglomerate, the New York Post reports. The idea of an online spinoff is not new. The scenario was first floated soon after the 2000 AOL and Time Warner union when company stock began to fall. The resignation of AOL Time Warner chairman Steve Case has fueled rumors that it may become reality. Case, who helped engineer the merger, was staunchly opposed to a spinoff. The Post reports that AOL head Jonathan Miller, who’s held the job less than six months, will be given at least a year to revive the internet arm by the company board. His plan to return AOL to its late-Nineties glory, hasn’t exactly gotten rave reviews. Stock fell 14 percent on the day of Miller’s presentation. Under Miller’s new approach, AOL vice chair Joe Ripp and broadband chief Lisa Hook will take on increased responsibilities. As the company tightens its spending, a third round of layoffs, following December’s 300 and November’s 90, is expected soon. This round may reach up to 1,000. AOL laid off 850 workers total last year.
Booming Yahoo will bloom bigger this year
Thanks to a revised economic model, Yahoo experienced a double-digit fourth-quarter boom over last year, and predicted that it will break the billion-dollar mark for the first time since 2000 this year. After 2001’s loss of $8.7 million during the fourth quarter, Yahoo reported a net profit of $46.2 million for fourth-quarter ’02. The company out-earned analyst predictions by 2 cents per share (for a total of 8 cents per fourth-quarter share). Last quarter’s revenue increased by nearly $100 million versus 2001 to $285.8 million. That bettered analyst predictions by about $8 million. Because of the weak ad market, Yahoo adjusted its earnings strategy last year by putting a greater focus on paid content. That helped the company’s revenue from personal ads alone jump by 120 percent, to $89.4 million. Broadband growth also boosted the company, which will expand its broadband reach from 13 states to the entire country this year through deals with local cable stations. Yahoo, which hit 2 million paid content subscribers in 2002, predicts revenues between $255 million and $275 million for the current quarter.
DirecTV's fortunes up in '02, but will fall in '03
Last year DirecTV signed up 292,000 new subscribers in the fourth quarter alone for a net 2002 total of 1.05 million subscribers. But the country’s largest satellite TV provider doesn’t expect such a rosy 2003. Company analysts predict that new additions will slump to just 750,000 to 800,000 for the new year. Although that will still push DirecTV past 10 million total subscribers – it’s at 9.49 million now – it also will force the company to boost its prices. President Roxanne Austin says that a $2-per-month increase will be added to certain packages during the second quarter, offsetting programming costs. DirecTV earned fourth-quarter revenues of $1.97 billion last year, a 15 percent jump from the year before. Increased cable competition and the shuttering of DirecTV DSL caused the lowered outlook for 2003.
Lindows targets schools to expand brand
Software maker Lindows, the San Diego company that produces a simplified Linux-based operating system, hasn’t been very successful in challenging the market dominance of Microsoft’s Windows. But here’s a small step that should help the product gain a bit of buzz. Lindows has begun a licensing program designed to help schools install the system for $500 per year on as many computers as the buyer wants. Until recently the Lindows system had been sold only with cheaper computer brands, such as those sold at Wal-Mart. Now the software is available autonomously. The company hopes that it can build loyalty by offering the discount to educational facilities, a growing market. Research company IDC predicts that educational IT spending will near $10 billion by 2005; Dell and Microsoft have both entered the market recently, after years of domination by Apple. The school version of Lindows includes web browsing and email tools, as well as several other straightforward applications.
Why WiFi? So Canadians can surf from anywhere
Canadians can log onto the internet via WiFi technology from a select group of public telephones starting this week. The wireless technology consulting firm inCode Telecom has partnered with Bell Canada to test the new service, which provides high-speed connectivity. Users up to 300 feet away from the phones will be able to log on using the WiFi’s standard unregulated wireless airwaves, also called 802.11b. Many airports, hotels, restaurants, convention centers and even a select few towns offer such access in the U.S. With the increasing proliferation of laptops and PDAs, inCode says it expects a spike in demand for publicly accessible WiFi service in the coming year.
Lycos surfers give Atkins, Pilates thumbs-up
It’s the only time of the year when the search term “Richard Simmons” outranks “Jennifer Lopez.” Terra Lycos reported a big surge in diet and exercise terms for the week ending Jan. 11 as New Year’s resolutions kicked in. The most popular search was “Atkins diet,” followed by “Weight Watchers” and simply “diets.” Although Lycos experiences this health craze every year, the company says that diet-related search terms jumped more than usual this year. For the past two weeks, for example, Atkins searches have tripled, pushing the carb-phobic query past perpetual Lycos favorites Harry Potter and Britney Spears. Since 2001, searches looking specifically for women’s fitness have doubled. Other hot-topic weight loss terms include Pilates and weight training, while yoga, aerobics and tai chi have fallen.
January 17, 2003© 2003 Media Life
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