Shares of America Online Inc. (NYSE: AOL) rose 3 3/8 to 128 5/8 on Monday ahead of its analyst meeting on Wednesday in Washington, D.C.
The meeting on Wednesday may be the pinnacle of anticipation for what the Dulles, Va. online service provider may do to expand its business to offer high-speed Internet access using broadband technology, such as digital subscriber line (DSL).
Wall Street is craving an announcement involving broadband technology. "We continue to believe that AOL is in discussions with many potential broadband partners, including several cable companies," said Jamie Kiggen, analyst at Donaldson Lufkin & Jenrette, in a report. Kiggen advised to buy the service provider ahead of the report, which he sees as being "extremely positive."
AOL's interest in broadband has been evolving in the past two years Hopes for a big move in the high-speed market were rekindled when AOL's name became entwined in the tug-of-war between Comcast Corp. (Nasdaq: CMCSA) and AT&T Corp. (NYSE: T), which AT&T eventually won.
"We would not be surprised to see an announcement with a cable provider, perhaps one now feeling threatened by AT&T," said Keith Benjamin, analyst at BancBoston Robertson Stephens in a report.
To be sure, AOL hasn't been completely immobile in gaining access to the broadband market. The online service has teamed with SBC Communications Inc. (NYSE: SBC) and Bell Atlantic Corp. (NYSE: BLS) to offer high-speed service.
"We expect upbeat presentations from AOL's top executives," said James Preissler, an analyst with PaineWebber. "We believe AOL is likely to use the forum to update investors on the operations of the company."
Aside from the broadband issue, Preissler said he was looking for more information on the Sun/Netscape alliance, international expansion strategy, and acquisition strategy going forward.