Posted at 11:00 p.m. PDT Tuesday, October 19, 1999
ExciteAtHome reports small
third quarter loss
BY ANDREA ORR
PALO ALTO, Calif. (Reuters) - ExciteAtHome Corp. Tuesday
reported a small pro forma operating loss for its third quarter and
said revenues came close to doubling as it showed brisk growth in
its high-speed Internet service.
The company, which offers Internet access and content, said it had
a pro forma net operating loss of $4 million, or one cent per share, which was in line with the mean
estimate of analysts. The comparable year-ago figure was a loss of $8 million, or two cents per
share. The pro forma numbers adjust results for the merger of Excite and AtHome, which was
completed earlier this year.
In addition, the operating income figure excludes various merger costs and other unusual items.
Including all those items, the company showed a net loss of $498.6 million, or $1.37 per share, in
the third quarter, compared with a loss of $23.3 million, or 10 cents per share last year.
Revenues totaled $113 million compared with $58 million last year.
While earnings were in line with most forecasts, the company showed surprisingly strong growth in
its high-speed Internet access business. It said it had 840,000 cable modem subscribers worldwide
at the end of the third quarter, compared with 620,000 at the end of the second quarter.
In an interview after earnings were announced, ExciteAtHome President George Bell said the
company was well on track to have one million to 1.1 million high-speed subscribers at the end of
the year, and would launch a new broadband portal featuring more rich-media content some time
before then.
Growth was somewhat slower at the excite.com portal, which had an average of 89 million page
views per day during September, up about 10 percent from the 81 million during June.
George Bell noted that page view growth does not always adequately capture the growth of the
business, since Excite has focused on generating more revenues from each individual Internet page.
But he also acknowledged that business may have suffered from inadequate marketing.
''We have not been marketing as aggressively as I would like to in narrowband,'' Bell said. ''We're
now coming out of that lull and it's looking very positive.'' The merger of Excite and AtHome earlier
this year combined the mostly plain-text narrowband content of the excite.com portal with
AtHome's broadband service, which lets consumers view richer content like video.
Although broadband content is rapidly being deployed on the Internet, it is not yet the dominant
media online, nor is it clear when it will be.
Bell said he expects narrowband content will remain the bigger part of ExciteAtHome's business for
at least a couple of years. For that reason, in addition to more aggressive marketing, the company
might consider an acquisition that would help it grow its audience. ''If the right acquisition
opportunity presented itself, we would be eager to look at it,'' he said.
Asked whether the company may have focused too much on the broadband business, Bell replied,
''broadband has a kind of sex appeal that narrowband doesn't, as well as the potential to attract
television-like ad spending. ... I can understand why people give disproportionate lip service to
broadband.''
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