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Webreference.com: Of AT&T, AOL and ISPs: Whither On-Ramp Intermediaries?

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Of AT&T, AOL, and ISPs

Whither On-Ramp Intermediaries?

by Prof. Sunil Gupta (sunil_gupta@ccmail.bus.umich.edu)

Are cheap prices and the ability to commit large resources all that matter?

The rush to connect Jane and John Citizen to the Internet is well under way. Who will strike gold, and who will end up with a pan of wet sand? One day the major on-line services are declared dinosaurs, facing extinction at the hand of nimbler, cheaper Internet Service Providers (ISPs). The next day, the ISPs themselves find investors fleeing their stocks as Ma Bell weighs in with WorldNet. What's a poor Wall Streeter to do? Are cheap prices (currently favoring ISPs, and potentially favoring anyone with deep pockets) and the ability to commit large resources (favoring AT&T and other large telcos) all that matter? Based on ongoing research conducted by the HERMES project at the University of Michigan Business School, I identify some fundamental technical abilities and related business skills that can be a counterbalance for large resources and cheap prices. In fact, these will be the essential skills required of any company hoping for long-term profitability as an on-ramp intermediary. If you see a company mastering these, invest and hold. If you see them falling behind, prepare for price cutting, wasteful spending, underperformance, and demise.

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Copyright © 1996 Prof. Sunil Gupta and Created: Apr. 17, 1996
Revised: May 21, 1997

URL: http://webreference.com/worldnet/