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Subscriber Values: April 2002
United Online rose as investors gained confidence in the stock, while AOL dropped and Go America lost steam but remained high. Overall, the trend for ISP valuations remains flat.
| [April 18, 2002] |
 |
United Online leaps past Earthlink in our ratings of value per subscriber of public companies, due mostly to good news coming out of the merged Juno and NetZero. United Online reported cost cutting measures and upsell results that the market liked.
Although Go America stock has dropped, the company retains a healthy $493 per subscriber market value, which is a premium that seems to express the market's faith in Go America's partnerships with big deal names like mySAP, IBM Global Services, and Dell.
AOL stock has dropped in part due to analysts' pessimism about future earnings, pessimism about broadband in general, and pessimism about the accounts of large companies. The only specific piece of negative news we found is that Saudi Prince Z has finished acquiring $450 million worth of AOL stock. When that news hit the market, along with the fact that the Saudi multi-billionaire wouldn't be buying any more, the stock dropped.
Overall, the market remains flat, but there are some purchases, not all of them of distressed ISPs, that should make the market interesting again soon. Of particular note are two: FASTNET's acqusition of Netaxs for undisclosed terms that were more stock than cash, and NextWeb's acquisition of Wi-Fi provider Innetix. It's possible that some CEOs of Wi-Fi ISPs may make money selling out to rollups, but that doesn't seem to be happening yet on a large scale.
|
ISP Subscriber Value:
$808 |
||||
|
Stock Symbol |
ISP |
Value per subscriber |
Market Cap |
Number of subscribers |
|---|---|---|---|---|
|
|
||||
|
[AOL] |
AOL |
$2,598 |
$94,839 |
36,500,000 |
|
[ELNK] |
EarthLink |
$293 |
$1,407 |
4,800,000 |
|
[UNTD] |
United Online |
$314 |
$459 |
1,460,000 |
|
[GEEK] |
Internet America |
$25 |
$3.5 |
142,000 |
|
AOL
subscriber numbers include RoadRunner and CompuServe. Juno and NetZero have merged into United Online. We report only paying subscribers for the merged company. The company claims 5.6 million active users (combined paying and free subscribers). EarthLink
includes 172,000 Webhosting accounts in its subscriber numbers. ISP subscriber values without AOL would average $211 per subscriber.
|
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|
Cable ISP Subscriber Value: $256 |
||||
|
Stock Symbol |
ISP |
Value per subscriber |
Market Cap |
Number of subscribers |
|
|
||||
|
[RCNC]
|
RCN
|
$256
|
$123
|
481,587
|
|
RCN subscriber numbers include subscribers to the StarPower joint venture (a joint venture with Pepco Communications, L.L.C., a utility's subsidiary). RCN reported 119,955 cable Internet subscribers and 361,632 dialup subscribers.
|
||||
|
Mobile Wireless ISP Subscriber Value: $493 |
||||
|
Stock Symbol |
ISP |
Value per subscriber |
Market Cap |
Number of subscribers |
|
|
||||
|
[GOAM] |
GoAmerica |
$493 |
$53 |
108,446 |
|
GoAmerica subscriber data is as of Sept. 30, 2001. Motient filed for Chapter 11, and will be added back to the chart when restructuring ends.
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ISP Sale Prices |
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|
Buyer/Seller |
Value per subscriber |
Price
|
Number of subscribers |
|
|
|
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|
EarthLink (ELNK)/ |
$156 |
$5 |
32,000 |
|
| OmniSky, a mobile wireless ISP, was in Chapter 11 when it was acquired by EarthLink in January, 2002. At its peak, OmniSky was valued at $1.6 billion. Forbes estimates that in 2001, EarthLink paid about $150 per subscriber for 36 other ISPs with a total subscriber count of 304,000, a total of $46 million. If Forbes' estimates are correct, the average size of the acquired ISPs would be 8,500 subscribers. This data suggests that EarthLink pays the same price for dialup and mobile wireless subscribers. | ||||
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