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To: Haim R. Branisteanu who wrote (75309)	4/18/2001 6:40:24 AM
From: puborectalis	Respond to of 99985

At Home needs pile of cash by June BY JOSHUA L. KWAN Mercury News At Home, the nation's largest provider of high-speed Internet service over cable lines, said Tuesday that it needs to raise $75 million to $80 million by the end of June to stay afloat, and that it will report lower-than-expected first-quarter revenue next week. The Redwood City company, which does business as Excite@Home, also confirmed it is ``in discussions'' with Telocity CEO Patti Hart to become the company's chief executive. If Hart becomes CEO, she will have to cut spending, raise money and refocus the company. Excite@Home said Tuesday it is looking into selling some media properties that are losing money in order to focus on its core business of selling broadband Internet service over cable lines. The company is also considering more layoffs, after a cut of 250 jobs announced Jan. 23, most of them in its media business. ``Our core business is strong,'' said CEO and Chairman George Bell, who has been looking for his replacement since September. ``We must focus our financial and human resources on our core business, and make certain that we have the cash resources and the cost structure we need in order to realize the tremendous broadband opportunities before us.'' At Home said Tuesday that it used up nearly half of its $205 million in cash and short-term investments during this past quarter, leaving just $105 million in the bank. It expects to report first-quarter revenue in the range of $140 million to $145 million. That's less than analysts' forecast of $152.7 million. About half the company's revenue comes from the media and advertising business, which, like Yahoo's, has been hit hard by the sudden online ad drought. The core business of broadband access is still promising. EMarketer, a market research firm, predicts there will be 5 million cable-modem users by the end of this year, a 70 percent increase from last year. It is now the most popular broadband technology, although some analysts project that DSL, or digital subscriber line, will surpass cable in 2003. However, At Home's Internet access business has its own challenges, said analyst David Lee Smith. The company acts as the exclusive Internet service provider to many cable companies, but competition is on its way, Smith predicts. ``Cable providers realize they have to offer multiple solutions to Internet access,'' the Austin-based Dain Rauscher Wessels analyst said. ``They have to give their subscribers other ISP choices.'' Investors will be zeroing in on two crucial numbers in the coming months, Smith said: financing and growth in subscribers. The company reported an increase of 450,000 subscribers to its high-speed cable service, a 16 percent rise from the end of 2000. At Home now counts about 3.2 million subscribers. In a research note to investors, ABN Amro's Arthur Newman warned Tuesday that At Home is approaching a ``liquidity crunch'' and may need to raise more than the $75 million to $80 million the company estimates. Newman said At Home's most likely option for getting that cash is to restructure an agreement with AT&T that provides the company with Internet data-carrying fiber-optic lines. AT&T owns about 25 percent of the company and has a 74 percent controlling vote. Hart is a veteran executive of Sprint's long-distance business. Most recently, she was the CEO of Telocity, an Internet service provider in Cupertino. Hughes Electronics completed its purchase of Telocity on April 3. Bell, the outgoing CEO, will remain as chairman. The Wall Street Journal reported Tuesday that an announcement could be made as early as this week. At Home is the result of Internet service provider At Home's 1999 acquisition of Excite, then the No. 2 Web portal. It had lofty hopes of becoming a rival to America Online's ISP and portal combination, but At Home has faltered as its network experienced glitches and some key executives left the company.