
AOL generates revenue from advertising and online commerce. In late-1999,
such revenues were about 25% of online service revenues but growing fast.
Let us take the optimistic view that AOL will be able to maintain online ser-
vice revenue of roughly $20 per month despite heightening competition. Being
optimistic, let us also assume that advertising, commerce, and other revenue will
soon grow to 50% of online revenues, or $10 per month per AOL subscriber. This
allows AOL to expect total revenue of $30 per month, or $360 per year, for each
of some 22.2 million subscribers. This means that the anticipated annual revenue
from AOL’s 1999 customer base of ...