The actual rumor goes something like this:
1) YHOO buys Excite because they want Enliven and Matchlogic
2) T buys @Home because they want the dumb pipe
3) All of this is announced Thursday
One might surmise that this speculation came about because of Armstrong's recent statement that, given the choice, he would like to be CEO of either Excite or YHOO, because they were so busy reinventing themselves.
So does this make sense ? T has had any number of regulatory problems because of the content side of E@H's business. Without the pall of community relations hanging over their heads, T would encounter far less resistance in negotiating other alliances. If T were to embrace YHOO/Excite in an arms length relationship, they would have access to content, yet they would not be accountable for it. In an ironic turn of events, Steve Case finds himself roasting over the open access fire, because it is not now in his interest to fight for the principles that he once held so dear... the devil finds himself in his own fire.
As to the network, the T@Home dumb pipe becomes the de facto broadband platform nationally, and quite possibly internationally. The cable providers will sell that to T because, while they want to provide bundled BB internet, it is in their best interest to let someone else manage the structure. This in no way hinders T's telephony deals... it is quite likely that it would enhance them.
If your friendly neighborhood cable company wants a broadband network, they go to the BB superstructure, T@Home. Of course they could form their own network, but why would they ? They could ally with some Ma/Pa upstart, but why would they. They could solicit the immature infant Road Runner... but RR doesn't even have a CEO, and is a pawn to TWX... and then there's that AOL issue where you get back to that sticky content issue again... and overlapping territories.
What about YHOO, is this in their best interest ? YHOO needs a broadband partner. They could ally with the devil TWX/AOL, and the devil might accommodate them, in the interest of open access...if they sold their soul. They could pick off little Ma/Pa relationships here and there, while TWX/AOL was busy slicing off their subs. They could buy Excite and gain their subs and BB affiliations and a loving dumb pipe.
If it did happen, how would TWX/AOL compare with a T@Home-Yhoo/Excite alliance ? What price would T and YHOO be willing to pay for this alliance ?
Mike |
