From Seidman's Online Insider...

Cowen & Co. analyst Jeff Goverman, who has been somewhat bearish on AOL for a while, issued a report this week continuing a "Neutral" rating on AOL's stock because of slower-than-expected growth. In the report, Goverman said AOL's preannouncing its earnings-per-share projections is unimportant.

"The income statement in a company which capitalizes expenses to this extent or writes-off its acquisitions is basically meaningless. Also, it has amortized considerably less marketing expenses this year than in previous years. It changed its amortization period from 12 to 24 months beginning this fiscal year. 70% of EPS ($0.22 of $0.31) through the first three quarters, according to the company's 10Q, this year was due solely due to this change in accounting for subscriber marketing," Goverman said.

Goverman also calculates that AOL's cost for its NET new subscribers rose to $136 per user in the first quarter from $44 in the same period last year. He attributes this to more trial subscribers who don't stay with the service. Given numbers for the second quarter (where it's estimated AOL added only 400,000 subscribers, not counting GNN and international), Goverman predicts that figure will be about $225 for the second quarter.