America Online Inc’s chief executive Steve Case seems at ease with his company’s current state of affairs and is as confident as ever about the future. After a morning keynote speech at Fall Internet World in which he trumpeted the internet as a vast resource that should be driven by what the mass market wants and not by technology trends, Case explained that his vision for AOL is nothing short of being the primary public interface to that resource. At the same time the internet increases its saturation of households across the nation, Case believes there will be a massive shakeout among internet companies and ISPs – similar to the paring down of the PC software industry in the 1980’s – within the next year. And Case feels that those who will fall by the wayside will be those who don’t make it their mission to cater to the mass market, something he believes that AOL does well. The fact that AOL offers a wide variety of services seems to guarantee its appeal in Case’s mind. When questioned about a recent survey that found AOL to be the worst ISP, Case said he didn’t feel particularly good about it. But he was quick to explain that he doesn’t put much stock in such surveys. True to his mass market preaching, he explained that the consumers are the ones who cast the real vote and pointed out that AOL’s membership ranks have been growing rapidly, eclipsing 10 million recently. As far as the financials go, AOL has never really made any money – it lost nearly half a billion dollars in fiscal 1997. To be fair, huge amounts of money have been spent fueling the company’s growth. But there has to be a time for every company to stop bleeding money and stabilize itself financially. With a slew of large advertising and promotional deals in the last six months as well as the additional subscriber revenue, it would seem that for AOL, now is that time. Case feels there is still plenty of growth to come, though, and is not aiming for maximizing profits at this stage. And as far as the string of recent quarterly debacles goes, Case said merely that AOL could be profitable but we don’t choose to be. Instead, he wants to best position AOL for five-to-ten years down the road when some form of internet access hardware is in just about every American home. And although AOL may not have reached its pot of gold yet, Case obviously feels it is in a somewhat adolescent position, where it can begin showing at least some consistent profitability. He clearly indicated his comfort with ball park expectations in the near term. The company’s balance sheet has been troubling at times, with current liabilities sometimes dwarfing current assets. While Case seemed to acknowledge that some balance sheet work had been done, and there was more to come, he said I’m confident with our financial strength, adding that the company’s market capitalization bears out Wall Street’s agreement.
