Strategy Analysis of America Online Inc.
Prior to 1995, AOL was very successful in the commercial online industry relative to its competitors CompuServe and Prodigy primarily because of its pricing rate structure which was the easiest for customers to understand and plan for ahead of time. CompuServe and Prodigy offered the same pricing as AOL for its standard service, but, charged additional fees for premium services and downloading which made it more difficult for customers to anticipate their monthly spending.
The key changes taking place in the online industry in 1995 are the introduction of the Microsoft network and the coming of use of the Internet World Wide Web which offered alternative channels to content providers that provided more control over their offerings and potentially higher revenues. Microsoft Network took only a 30% commission fee (versus 80% taken by AOL from its content providers’ revenues) from its content providers and offered providers the option of choosing any format and font to display their content (versus the standard screen displays offered by AOL and its rivals). Also, the per-hour pricing policy offered by Microsoft was superior to AOL’s. With the development underway of a way to provide on-line currency collection, the World Wide Web offered huge incentives for providers to start publishing material on the internet by their own means without having to go through a middle-man such as an online provider. Both of these offerings do not bode well for AOL’s future prospects due to the huge incentives for customers and content providers to switch to these alternative distribution channels.
Prior to 1995, there is substantial evidence in the case (Exhibit 2 in the case) to suggest that the benefits of the expense of the free-trial CD marketing programs in acquiring customers will accrue over multiple periods. The average lifetime of a user was projected to be approximately 32 months (prior to 1995) and this makes a strong case, in my opinion, for capitalizing these expenses, as AOL did.
With the advent of competition, as discussed earlier, compounded with the difficulty of retaining retail customers, especially online, it is highly unlikely that AOL’s customers are likely to stay for an extended period of time just because of the initial inducements. Hence, I would recommend that the accounting policy be changed gradu...
... middle of paper ...
... $87,471 Million
Adjusted Book Value of Capital = Book Value of Capital –
Value of Subscriber Acquisition Costs Asset
= $239,754 M- $130,473 M = $109,281 Million
Subscriber Acquisition Costs Capitalized Subscriber Acquisition Costs Expensed
Return on Assets (ROA) (19,294)(1-.34)/406,464 =
-3.13% (70,131)(1-.34)/ 275,991 =
-17%
Return on Equity (ROE) (33,647)/217,944 =
-15.44% (84,484) /87,471 =
-97%
Return on Capital (ROC) (19,294)(1-.34)/
(21,810+217,944)
= -5.31% (70,131)(1-.34)/109,281 =
-42%
C.3 Differential Tax Benefit
Subscriber Acquisition Costs in 1995 = $111,761 million
Amortization of Subscriber Acquisition Costs in 1995 = $60,924 million
Tax Deduction if Subscriber Acquisition Costs were expensed = $111,761 million * 0.34
= $ 37,999 million
Tax Deduction if Subscriber Acquisition Costs were capitalized = $60,924 million * 0.34
= $ 20,714 million
By expensing instead of capitalizing, AOL is able to derive a much larger tax benefit ($37,999 million instead of $20,714 million). The differential tax benefit can be written as:
Differential Tax Benefit = $37,999 - $20,714 = $17,285 million
The term, ischemia, denotes inadequate blood supply to tissues due to blockage of the arterial inflow, while, reperfusion injury is defined as the injury caused by the restitution of blood flow after an ischemic peroid, leading to death of cells that were only reversibly injured at the time of blood flow restitution. [63]. The final infarct size after an MI event is therefore the result of the ischemic and reperfusion damage. For this reason, the term that best describes this process of myocyte death in reperfused MI is myocardial ischemia/reperfusion (I/R) injury [64]. In the early hours post myocardial ischemia, injured cardiac cells can release several molecules, including adenosine, opioids, and bradykinin, which activate the G protein signaling pathways therefore promoting myocardial survival. While in the late phase, myocardial ischemia induces upregulation of growth factors and cytokines, including VEGF, ILGF and SDF-1, in the injured myocardium, hence promoting a cardio-protective state. The liver also participates in cardioprotection through the up regulation and release of secretory proteins, including FGF21 and TFF3, which also promote cardiomyocyte survival. [65]. Foundational studies performed about three decades ago with animal models demonstrated that an early reperfusion was able to limit infarct size [66]. Then fibrinolysis was indisputably associated with a decrease in mortality in patients with STEMI [67].A decade later; primary angioplasty was shown to be more superior than fibrinolysis [68]. Currently primary coronary angioplasty (PCI) has been established as the backbone treatment for STEMI patients. The period from the onset of symptoms of MI (representative of the time of coronary occlusion) and reperfusio...
Inequality discrimination is an occurrence issue in the society. In Maya Angelou’s essay “Graduation,” she presents a form of discrimination based on how the African Americans were treated by whites; implying to short descriptions that she extends in her essay of racism and discrimination in her society was based on her school experience. Such as how they were not valued for their educational intelligence but only physically. For example, “Like travelers with exotic destinations on their minds, the graduates were remarkably forgettable…After tests were returned and grades given, the student body, which acted like an extended family, knew who did it well, who excelled, and what piteous ones had failed” ( Maya Angelou 21). This quote reflects on a class social preference. I believe Maya’s describes this as a disappointment and discrimination between those who has money to travel and willing workers. I personally admit that racism affects the society and everyone is equal and this quote signifies the unfairness they affront to in society. Such as American race having preferences for their race is not fair for others. As this quote stated that some professors gave changes to those who were high class by accepting their tardiness and late work just because of their race. This represents crucial unfair act. Same as the central school (white school) been established for “improvements”, a “well-known artist” was going to go to teach them about art, and other supplies in which makes them better because they have everything to be well known as an improvement great school as for Stamps school; Donleavy acknowledge that is possible for African American to learn successfully but they only lie in sports or service worker (Angelou 27). At this point, the man’s words were really offensive to African American race such as a mean discrimination and making them feel all their work is
Moisse, Katie. “Stem Cells: New Hope for Heart Failure Patients”. Abcnews.com. 14 Nov 2011. Web. 15 Nov 2011.
Our own immune system such as macrophages help in restoring the damage in the heart for example, damage caused by myocardial infarction. Macrophages responsibilities are to clear the infarcted area and activate other cells, such as fibroblasts, endothelial cells and progenitor cells to help the healing process of the blood vessels (Mercola et al. 2011). Tissue regenerative in today’s world uses the stem cell technology to repair, replace and regenerate the cells of the injured organ or tissues. It is a combination of engineering principles and life sciences in order to create something that able to proliferate and regenerate as well as sustaining and improving its functions. This purpose can be achieved by applying functional cells, scaffolds supplementary, stimulate the growth and signal molecules to needed areas. The scaffold delivers as physical support for the cells as well as to function as organizer guiding the cell growth and differentiation (Leor et al. 2005).
Marshall, M.H., McManus, W.W., Viele, V.F. (2003). Accounting: What the Numbers Mean. 6th ed. New York: McGraw-Hill Companies.
An interesting historical paradox is that, although the Internet has U.S. Defense Department origins, it is scarcely perceived as a public utility by most users anymore. (Abrahamson, JMQC vol 75, no 1, p. 16) Public reaction to the specific and continuing privatization of the Internet has been anything but an organized protest. Greater portions of it have, in name as well as effect, become privatized by larger corporations. This includes Microsoft, the largest player in the nation’s information technology marketplace. This conglomerate is widely recognized as a commercial enterprise with well-documented monopolistic tendencies.
Strong feelings and senses is one type of romanticism used in The Scarlet Letter. Romantics believed that knowledge was gained through intuition rather than deduction. Hawthorne uses Pearl, Hester Prynne’s daughter, as
Management accounting in organisation is very important for decision-making and to make the business more efficient and therefore increasing its profits. Is the process of preparing accounts that can help managers to make day-to-day and short-term decisions, by providing them with accurate and timely key financial and statistical information...
Nathaniel Hawthorne uses each of them to represent something larger. The Romantic period sets itself apart from other literary periods in the importance and use of symbolism. The Scarlet Letter is a good representation of a work written in the Romantic era (Phillips 59). Literature during this period used symbolism to reveal larger concepts. For example, Pearl reveals the consequences of the sinful nature of humans and how it does not affect only the sinner. The symbolic use in The Scarlet Letter contributes to the popularity of this piece of
...getting the stock are extending money but charging a higher percentage. This extra percentage would not be charged if earnings were reinvested which is internal.
Romanticism and Puritanism collide in Nathaniel Hawthorne 's The Scarlet Letter, as Hawthorne’s characters are dealt with a conflict between following one’s own moral code versus following the code of a pious and conservative society. Hawthorne introduces characters who are in a struggle to rebel against a stubborn society. Throughout his novel, Hawthorne allegorizes a Romantic moral that expressing one’s true beliefs and emotions is ultimately rewarding. Across their progression, the characters Hester Prynne, Arthur Dimmesdale, and Roger Chillingworth embody such Romantic moral.
According to Professor Clark of APSU, “Accounting has changed more since 1980 than in the previous 4000 years” (Clark, 2016). The prime reason for this exponential growth in the last 35 years or so is the impact the internet has had on all of our lives. As access to the internet grows, more small businesses will be able to grow. The technology, access and speed of the internet will need to continue to match the exponential growth of the technology that uses it. So far, that seems to be the
growth in usage by both consumers and businesses. The unique capabilities of the Internet has captured the attention of the marketing community. While a growing number of companies have or are interested in developing an Internet presence, there is still a great deal of uncertainty about it and the potential ethical issues associated with its use as a marketing medium. Although many businesses are acknowledging the importance of a Web site, but the potential ethical issues related to marketing on the Internet still having an uncertainty in this situation. Much less attention has been given to the business community's perceptions of the ethicalness of this new medium. The unique interactivity of the Internet has captured the marketing community's interest as a way to develop and enhance customer relationships and establish greater brand identity. Thus, many commercial services have become available on the Internet that allow consumers and organizations to interact electronically. These services include booking airline tickets online, buying books and compact discs, and receiving stock market information. Although the number of consumer users and commercial organizations navigating on this "information superhighway" is growing almost exponentially, the benefits of the Internet are not without drawbacks.
Regenerative medicine also seeks to understand the ability of a tissue or organ to repair itself. Many adult tissue contain stem cells but are at times not functional or is impaired by disease. Using factors to activate and promote instrinsic repair in a diseased organ opens up whole new prospect for therapies targeted toward many degenerative diseases.[9]
Internet advertising is growing before 2000. In 2003 it revenues were increased by 38 percent. It was the highest record at that time. It was a great advantage for the marketers, who were into internet advertisement. ( The economic times, 2004)