<BREAKFAST WITH THE FOOL>

Tuesday, February 2, 1999

"Treat 'em like dogs, and you'll have dogs' work and dogs' actions. Treat 'em like men, and you'll have men's works." -- Harriet Beecher Stowe

Latest Market Numbers

"You've Got AOL MovieFone"

In an aggressive acquisition move outside of the realm of typical Internet stocks, America Online (NYSE: AOL) said it will acquire movie listing and ticketing service provider MovieFone Inc. (Nasdaq: MOFN) for roughly $388 million in stock. AOL intends to rebrand the business as AOL MovieFone, making it a key anchor tenant on AOL's online service, strengthening AOL's entertainment offerings, and giving AOL access to the 100 million moviegoers who used MovieFone (i.e., 777-FILM) last year. In the words of AOL President Bob Pittman, the deal adds an "exciting new area of local e-commerce to AOL."

The purchase of the leading movie listing and ticketing service will further beef up AOL's local content network and community guide Digital City in the face of stiffer competition from the likes of Ticketmaster Online-CitySearch (Nasdaq: TMCS) and Microsoft's (Nasdaq: MSFT) MSN Sidewalk channel. Ticketmaster Online already has locked horns with MovieFone as the two have battled for ticket sales by phone and the Internet. Meanwhile, AOL's Digital City network competes directly with CitySearch and MSN Sidewalk, seeking to be the online guide of choice on individual cities.

MovieFone CEO Andrew Jarecki and the company's three other co-founders will continue to run the company from New York and Los Angeles. MovieFone covers more than 17,000 movie screens in 42 U.S. cities, which account for more than 70% of the national movie-going audience. The predominantly non-Internet business is quite a different animal from other recent AOL acquisitions such as Netscape Communications (Nasdaq: NSCP), Mirabilis Ltd.'s ICQ online chat network, and Web-based TV company NetChannel -- which are all first and foremost Internet businesses.

The exact stock swap formula will be determined by dividing $29.95 by AOL's average share price during a set period prior to the deal's completion. But the companies have agreed to a collar on the deal, by which MovieFone shareowners will receive no fewer than 0.1670 of an AOL share and no more than 0.2259 of an AOL share. The Jarecki family and its affiliates, who control more than 90% of the voting interest in MovieFone, have agreed to vote to approve the acquisition.

Earnings to Go

ACNielsen Corp. (NYSE: ART) -- Q4 EPS: $0.36 vs. $0.27 last year; estimate: $0.33
Airborne Freight (NYSE: ABF) -- Q4 EPS: $0.78 vs. $0.60 last year; estimate $0.66
Cymer Inc. (Nasdaq: CYMI) -- Q4 EPS: loss of $0.12 vs. profit of $0.24 last year; estimate: loss of $0.16
Exide Corp. (NYSE: EX) -- fiscal Q3 EPS: loss of $2.16 vs. profit of $1.05 last year; estimate: profit of $0.22
Lincoln National Corp. (NYSE: LNC) -- Q4 EPS: $1.37 (before charges) vs. $1.19 last year; estimate: $1.27
PepsiCo (NYSE: PEP) -- Q4 EPS: $0.24 vs. $0.29 last year; estimate: $0.23
Polo Ralph Lauren (NYSE: RL) -- fiscal Q3 EPS: $0.25 vs. $0.29 last year; estimate: $0.25
Sprint (NYSE: FON) -- Q4 EPS: $0.79 vs. $0.72 last year; estimate: $0.85
U.S. Filter (NYSE: USF) -- fiscal Q3 EPS: $0.36 vs. $0.31 last year; estimate: $0.36

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor