=DJ Excite@Home CFO: Co. Seeking Wholesale Web Access Deals
By Peter Loftus
Of DOW JONES NEWSWIRES
REDWOOD CITY, Calif. (Dow Jones)--Excite@Home Corp. (ATHM) is
actively seeking deals to sell wholesale Internet backbone services to
Web-access providers, but it's not ready to make an announcement,
Chief Financial Officer Mark McEachen said Friday.
The company is also exploring the idea of offering "premium
services," such as paid video-game subscriptions, which could be
separate from an end-user's Internet access but would feed directly
onto a PC desktop, McEachen told Dow Jones Newswires in an interview
at the company's headquarters here. These services wouldn't require
Web browsers.
Such plans represent an effort to find new revenue streams at a time
when Excite@Home's Web site advertising sales have declined, slowing
overall growth. Moreover, within the next 18 months, the company faces
the end of the exclusive status of its arrangements to sell
high-speed, or broadband, Internet access to customers of most big
cable television operators, including AT&T Corp. (T), which controls
Excite@Home.
"We are fundamentally the only company positioned to give that
last-mile, ubiquitous networked product offering," McEachen said.
The company has talked about offering wholesale Internet backbone
services for several months, but it hasn't announced any deals. Some
analysts have speculated that Earthlink Inc. (ELNK) will buy service
from Excite@Home as it prepares to launch a cable broadband service
for customers of AOL Time Warner Inc.'s (AOL) cable systems. McEachen
declined to comment specifically on potential partners, but said he's
received numerous calls from Internet service providers to discuss
wholesale backbone deals.
Excite@Home is the largest provider of cable broadband Internet
access, with roughly 3 million subscribers. The company said in
January it expects to end this year with between 5.2 million and 5.5
million subscribers, which was lower than some analysts' estimates.
There are no signs of softness in the cable broadband business,
McEachen said. "We are not in a demand-constrained environment, we're
in a supply-constrained environment," he said. The demand for
Excite@Home's access service has been heightened by what McEachen
called the "implosion" of the market for another form of high-speed
access, digital-subscriber-line, or DSL, which uses telephone lines.
The DSL market has suffered from lengthy rollouts and quality issues.
But softness continues in the media side of the company, which
includes the Excite Web portal. "We don't see a return to robustness
for the first six months of the year," McEachen said. In the first
quarter, media and advertising revenue is expected to fall 30% to 35%
from the fourth quarter, the company said last month.
Despite the softness, McEachen said the media side of the business
would remain an integral part of Excite@Home. The company will
continue to mesh media content with its broadband offerings. For
instance, it's trying to boost sales of multimedia Web ads known as
"interstitials," which require broadband connections for best
performance.
Excite@Home has tried to improve the reliability of its network,
which was the subject of some criticism from its cable partners last
year. McEachen said the relationship between Excite@Home and its cable
partners has "improved greatly." |
