Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



United Online's Holding Pattern

It's perhaps unsurprising that shares of value ISP United Online (Nasdaq: UNTD  ) are about flat with the level they set in mid-October following news that Time Warner's (NYSE: TWX  ) AOL would start a deep-discount dial-up service in 2004 for the Netscape browser. United Online offers discount Internet access services through its BlueLight, NetZero, and Juno brands.

Even news that would ordinarily be well-received by investors -- including a stock-split marketing pact with Best Buy (NYSE: BBY  ) and an upbeat fiscal Q1 earnings report -- hasn't helped restore the shares' go-go climb through most of 2003. In short, it looks increasingly like investors are keeping the shares in a "holding pattern" until it's clear how AOL's new entrant will stir up the marketplace.

In a Washington Postarticle today, David Vise takes a good look at United Online, its CEO Mark Goldston, and the competitive situation surrounding the service provider. The company faces stiff pressure from EarthLink (Nasdaq: ELNK  ) , cable and telephone companies, as well as high-speed and dial-up connections.

What the article can't do is tell us how this whole story will shake out. For United Online, the story remains the same: The fierce battle on the low end for no-frills dial-up subscribers will rage on -- and even intensify as Netscape joins a market AOL already operates in via a Compuserve and Wal-Mart (NYSE: WMT  ) partnership. (Accelerated dial-up services like United Online's add flavor to this stew.)

The fight for growth and market share in the high-speed space, meanwhile, will continue to be the big story in the sector. But if you believe Goldston's contention that AOL can't overmarket another cut-price service because of cannibalization concerns, it may follow that United Online is being unfairly penalized for potential near-term changes to its competitive position.

Will United Online succumb to its competitors? Talk about the company's outlook on our United Online discussion board.

Dave Marino-Nachison can be reached at

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 500764, ~/Articles/ArticleHandler.aspx, 10/25/2016 10:56:18 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 hour ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
BBY $39.26 Down -0.20 -0.51%
Best Buy CAPS Rating: *
ELNK $6.11 Down -0.03 -0.49%
EarthLink CAPS Rating: **
TWX $87.16 Up +0.42 +0.48%
Time Warner CAPS Rating: ***
UNTD.DL $0.00 Down +0.00 +0.00%
United Online CAPS Rating: No stars
WMT $69.36 Up +0.17 +0.25%
Wal-Mart Stores CAPS Rating: ***