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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: FR1 who wrote (21208)	4/20/2000 8:19:00 PM
From: Ahda	Respond to of 29970

UPDATE 2-AT&T to increase control of ExciteAtHome (Adds details in paragraphs 8,14,15, updates stock prices) By Jessica Hall NEW YORK, March 29 (Reuters) - AT&T Corp.(NYSE:T - news), the No. 1 U.S. long-distance telephone company, on Wednesday said it would increase its voting stake in Internet access and information company ExciteAtHome Corp. (NasdaqNM:ATHM - news) in a move to expand its presence in the high-speed Internet market. ExciteAtHome, meanwhile, said it extended its distribution agreements with AT&T and its other cable television partners beyond 2002, when their exclusive relationships end. It also scrapped plans to create a tracking stock for its media operations. Shares of ExciteAtHome rose 3-3/8, or nearly 10 percent, to 37-11/16 on Nasdaq, while AT&T gained 1-3/4 to 60-7/16 on the New York Stock Exchange. Under a series of complicated agreements, AT&T will have the right to increase its voting stake in ExciteAtHome to 74 percent from 56 percent. Its ownership stake will remain unchanged at 25 percent. ExciteAtHome's other major cable TV partners, Comcast Corp. (NasdaqNM:CMCSA - news) and Cox Communications Inc. (NYSE:COX - news), can sell their ExciteAtHome shares to AT&T for $3 billion, starting next year. NEW STRUCTURE AT&T Chairman C. Michael Armstrong said the agreement ``renews our commitment to ExciteAtHome and really removes the uncertainty that has surrounded our relationship and the future of ExciteAtHome.' AT&T will be able to elect a majority of ExciteAtHome's board members. The Internet company will amend its charter to allow board action by simple majority, which effectively gives AT&T control of the company. Analysts said the new pact will ease some investor concerns over the future of ExciteAtHome, whose shares have fallen more than 70 percent over the past year before Wednesday's rise. Investors had feared that the company's complicated ownership structure forced it to serve several masters and reduced its decision-making speed. With a clearer governing structure, ExciteAtHome now will be better able to maintain its lead over rival high-speed services such as RoadRunner or DSL (digital subscriber line) products sold by telephone companies, analysts said. At the end of 1999, ExciteAtHome had 1.1 million high-speed Internet customers, more than half of the 1.8 million total high-speed subscriber base in the United States. CABLE DISTRIBUTION PACTS EXTENDED ExciteAtHome extended its distribution pacts with AT&T through 2008, and with Comcast and Cox through 2006. Comcast and Cox, however, have the right to end the exclusivity provision and may terminate the entire distribution agreement as of June 2001. The possibility that Comcast and Cox may terminate their pacts puts pressure on ExciteAtHome to prove it can grow and attract new subscribers in the face of growing competition, analysts said. If successful, ExciteAtHome could become a more formidable competitor to Internet leader America Online Inc. (NYSE:AOL - news), which is merging with media company Time Warner Inc. (NYSE:TWX - news) AT&T reiterated its plan to offer a choice of Internet service providers on its high-speed Internet systems, once its current exclusive arrangement with ExciteAtHome ends in June 2002. Consumer advocates and rival Internet service providers have argued that the exclusive arrangements with ExciteAtHome stifle competition and curb consumer choice. Consumers who get high-speed Internet access through the cable-based systems must buy content from ExciteAtHome even if they want content from another company. Consumers, meanwhile, can choose among many ISPs when they get their Internet access over telephone lines. ExciteAtHome also will work with AT&T to deliver services to consumers through advanced TV, narrowband initiatives and possibly wireless services. AT&T said its deeper relationship with ExciteAtHome could allow the high-speed service to work more closely with AT&T's WorldNet Internet operations. AT&T declined to comment on the possibility of creating a tracking stock for its Internet holdings. AT&T plans to raise about $10 billion through an initial public offering of a wireless tracking stock later this spring. AT&T will include ExciteAtHome's financial results with its own. That will increase AT&T's revenue in 2000 by about $400 million but cut operational earnings per share by about 20 cents and trim reported earnings per share by about 5 cents. The deals are expected to be completed by the third quarter of 2000.