Even if rate hikes are usually welcome news to Wall Street, some analysts are slightly more conservative on how it will impact AOL's business. Credit Suisse First Boston analyst Jamie Kiggen is assuming a price hike will indeed encourage a small percentage of members to cancel their AOL accounts, or downgrade to a limited usage account. Since AOL raised prices, it has grown its subscriber base from about 11 million subscribers to 29 million subscribers today. If AOL can get away with raising fees, everyone else will probably follow suit. But it's a different economic climate now.
Consumer confidence is down and Internet penetration is growing slowly.
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