Could be excellent news if @Home and Roadrunner merge.
High-speed Net stocks surge into overdrive
By Bloomberg News
Special to CNET NEWS.COM
March 22, 1999, 2:00 p.m. PT
@Home and Broadcast.com led shares of Internet-related companies
higher on optimism that Comcast's purchase of MediaOne Group will
fuel future revenue growth as well as new content and services for
high-speed Internet access.
@Home, which provides high-speed Internet access through cable-television lines,
rose 6.1875 to close at 140, after peaking at 153.6875 in the afternoon. Excite rose
6.9375 to close at 128.6875, a new 52-week high. Broadcast.com rose 31.5 to
116.5.
@Home soared after No. 4 U.S. cable company Comcast
said it will buy No. 3 MediaOne for $60 billion in stock
and debt--fueling speculation that @Home may combine
with Road Runner, another high-speed Internet service in
which MediaOne owns a stake.
Internet stocks have surged this year on hopes that
industry consolidation will boost revenue growth, following
@Home's planned acquisition of No. 2 Internet directory
Excite and USA Networks' bid to buy No. 3 Internet
directory Lycos.
"Deals are fueling this market," said Ryan Jacob, portfolio
manager of the Internet Fund.
Many investors and analysts had speculated that @Home
and Road Runner may combine their services. Road
Runner is a joint venture of Time Warner, MediaOne,
Microsoft, Compaq Computer, and the closely held
Advance/Newhouse group, and it offers its service through
exclusive agreements with cable operators including Time
Warner and MediaOne.
@Home offers its service through similar agreements with cable operators including
Comcast, AT&T's Tele-Communications Incorporated, Cablevision Systems, and Cox
Communications.
"The implications of the merger may be @Home and Road Runner finally merging. It
may speed up or accelerate those talks," Jacob said. "They don't compete with each
other, but there are very clear synergies. While these negotiations have gone on for a
while, it may move along at a quicker pace." |
