Markets & Finance

Lehman Says AOL Subscriber News is 'Overdue'


Lehman says AOL Time Warner's (AOL) news that the company has surpassed 34 million users is "overdue."

Analyst Holly Becker says based on her forecast of 1.7 million net additions for the first quarter, AOL should have achieved 34 million users on Feb. 9. She says the most recent one million members were accumulated in 74 days, at a rate of 13,513 additions per day. AOL has now added 760,000 members thus far this quarter, implying a rate of 10,704 additions per day.

Becker says the delay highlights her concerns that domestic growth is slowing dramatically, that international subscribers may not be picking up slack, and that the churn may be increasing. She says it appears the increased adoption that was fueled by the release of AOL 7.0 has stalled.

She cut her 1.7 million first-quarter subscriber growth estimate to 975,000, and trimmed the 5.7 million growth rate estimate for 2002 to 3.9 million subscribers.


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