EAccess to Acquire AOL Japan's ISP Business

[Shak]

TOKYO (Reuters) - Japan's eAccess Ltd (9427.T: Quote, Profile, Research) said on Monday it will buy AOL Japan's Internet service operations for 2.1 billion yen ($18.33 million) in cash, marking the wholesale Internet provider's first foray into the retail business.

[reuters.com...]

Shak

[martinibuster]

Purchase price: $18 million
Yearly Profit: Roughly $7 million/year.

That seems like an awfully cheap price.

Is AOL

• divesting assets to make themselves more digestible as an acquisition
• or is $7 million/year a penny in the road not worth bothering with
• or is AOL so hard up they really need the $18 mil today and not in two and a half years?

[bill]

AOL Japan was all dial-up. Dial-up is nearly dead in Japan. I can get a 1mbps ADSL line for close to $10 US/ month...the virtues of dial-up are rapidly disappearing with the advent of ubiquitous and cheap broadband.

I keep one dial-up account for travel. This month they just lowered the price from about $5/month to $3.75/month. Granted this is a dirt cheap account with limited hours, but these trends are not indicative of a growth market. AOL is getting out while the getting is good. They never really caught on here anyway.