Hey, chris. Re: AT&T/ATHM/XCIT/RNWK
Glad you brought up the announcement of the WorldNet "sale" to ATHM. This one's a real sleeper. Very much more significant than meets the eye:
1) The WorldNet deal will happen because it *must* happen. AT&T has bungled almost every aspect of WorldNet from its inception, and has no chance of succeeding with it in the future. (I know because I'm a subscriber!) By "trading" WN for additional stock in ATHM, T gets an asset that will become enormously valuable while simultaneously solving its ineptitude problem. This is the ultimate 'sow's ear into silk purse' maneuver. Bravo. (Applause for Chairman Armstrong!)
2) ATHM picks up enormous critical mass. It goes from 331,000 subscribers (broadband) to over 2.5mm subscribers (broadband and dial-up) virtually overnight. This allows ATHM to migrate WN customers to broadband over a period of time while giving the entire customer base the ATHM "experience." If ATHM can "fix" WorldNet, its next move might be to acquire MSN's dial-up customer base (T apparently passed on the chance, but don't count out ATHM.) And then there's MSPG, ELNK, VRIO, Prodigy (bothering to go public), a few regional and a zillion local ISPs, all of whom are up for grabs. All of a sudden, this is starting to look like something. If you put all of this stuff together under a "brand name" umbrella with a broadband future, you have a shot at competing with (but inevitably, never catching) AOL.
3) The implications for RNWK are obvious: Win, Win.
All of which raises some interesting questions. How do RoadRunner's (TWX) 180,000 subscribers fit into the picture? And what sort of relationship does RNWK have with RoadRunner? Does TWX buy LCOS? And whither YHOO, BCST, and MSFT (Media Player)? The 'smart money' people are betting on a rush to the broadband party and *massive* consolidations this year. Count me among them!
Gotta buy in. Now, where do I sign to sell my kids?
BAM
Disclaimer: Long AOL, ATHM, BCST, CMGI (Lycos), MSFT, RNWK and T, among others. Drooling over many more! |
