I'm still scratching my head over why ATHM purchased XCIT. I have been looking for the usual after market opinions, suspecting that after todays price action, most will have a positive slant (won't want to blow against the wind).
Found this tidbit at from Red Herring:
Did @Home really need to swap out $6.7 billion in
stock -- not an insignificant chunk of change -- if it
already had a lock on the 60 million homes it currently
has under contract? Why enter the portal fray when its
business is broadband?
"If @Home was secure that it was going to prevail in the
current battle over its exclusivity in accessing the 60
million homes it has under contract, what does buying
Excite get them? They already are a portal, and a
monopoly to boot," notes Bob Silvestri, portfolio
manager for a large private fund and an investor in the
Internet space. "Why wouldn't they spend their money
making acquisitions that bolster their broadband lock?"
Mr. Silvestri's theory, and one that has been at the
center of a silently brewing broadband storm, is that
@Home must have known it could not keep a lock on
the cable broadband space amid pressure from America
Online (AOL) and others. The fact that AOL has
already launched a healthy first strike through deals with
MCI WorldCom (WCOM) and Bell Atlantic (BEL)
meant that @Home had to make a move.
"They're saying that they need a big foothold in AOL's
world, which makes a ton of sense if they believe that
eventually they're going to be forced to share broadband
with the dialup portals," says Mr. Silvestri. "This deal
now gives them the best of both worlds."
Ref: redherring.com
Even if AOL could compete with ATHM in the same markets (any time soon), I doubt that Exite + ATHM will win over customers on content.
What ATHM does not have is content target for the traditional dial-up customer… but XCIT does! Is the next target a POTS ISV for subscribers that can latter be upgrade to cable? To me, that makes more sense then what I am reading
Still long, excited, and confused
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