AT&T CORP is reportedly deciding whether to sell its phone-based
online service to cable Internet access provider AT HOME CORP, but
Ma Bell would still maintain control. So why do the deal? It's
simple, actually. AT&T would remove a fairly sizable expense from
its balance sheet -- making its bottom line look better -- and at
the same time benefit from the large valuations ascribed in the
stock market to Internet-based enterprises. Under the proposed
deal, first reported in the Wall Street Journal, AT&T would sell
its WorldNet internet service to At Home for $1 bln in the cable
internet company's stock. Both companies have declined to comment.
At Home would then fold WorldNet's 1.3 mln subscribers into its
customer base of 330,000, with the goal of converting the AT&T
users to its much faster, cable-based service. AT&T, however,
essentially would retain control of its online service because
it's about to acquire voting control over At Home with its pending
$41 bln purchase of the second largest U.S. cable TV operator,
TELE-COMMUNICATIONS INC. TCI owns a 58% voting stake in At Home
and 28% of its common shares. (CBS Market Watch)
|
