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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: George Bielski who wrote (8639)	3/8/1998 1:27:00 AM
From: LoLoLoLita	Read Replies (1) \| Respond to of 13594

No bad news? What about this I found over on the ATHM thread, with ATHM up 19% for the day Friday? MCI and AT&T to compete with!! ------------------------------------- To: George T. Santamaria (1579 ) From: Bruce N. Omori Saturday, Mar 7 1998 3:12PM EST Reply # of 1589 Hi Everyone, This is an article from NewsEdge. Enjoy! Bruce web services near big deal/ cable giants, at&t talking March 6, 1998 ------------------------------------------------------------------- Electronic Media via NewsEdge Corporation : Top executives of TCI, Time Warner and AT&T were set to meet in New York Monday to complete negotiations to create a dominant $6 billion high-speed Internet access service for cable customers. The deal would fold Time Warner's Road Runner and AT&T's WorldNet into @Home Corp., a publicly traded service controlled by TCI, Comcast Corp., Cox Communications and Cablevision Systems. An agreement among the players could lead to a separate deal in the coming months in which AT&T will become TCI's telephony partner. Sources close to the situation said plans called for Time Warner and its Road Runner partner, US West, to receive $1.4 billion in @Home stock in exchange for merging the services. Two-thirds of that stock would be held by Time Warner, with the remainder held by US West, for a combined 20 percent stake in @Home. (US West Media Group is also merging its MediaOne express into the Road Runner service.) AT&T would contribute its WorldNet service and cash, with a combined value of about $1.2 billion, and get a 20 percent stake in @Home. AT&T also would benefit by having its brand name linked to @Home's Internet connections, which would heighten cable-customer acceptance of the firm. Sticking points in negotiations include the positioning of Time Warner's Road Runner service content, as well as the valuation of the three separate services. Time Warner wants to assure a continuing prominent position for its Turner Broadcasting program online services, including CNN, which are now available via Road Runner. The solution will involve the use of a branded Road Runner button on the @Home control unit. Sources said Time Warner and US West also are holding out for a greater percentage interest in the new @Home, since they are bringing 27 million homes to the distribution base. AT&T's WorldNet service brings with it 1 million subscribers, the single largest group of subscribers contributed by any of the parties in the deal and about 65 percent of the current market for cable Internet services. AT&T's WorldNet service brings with it 1 million subscribers, the single largest group of subscribers contributed by any of the parties in the deal and about 65 percent of the current market for cable Internet services. @Home, which went public last year, offers video, data and phone service to about 50,000 cable subscribers. TCI's stake in @Home would be reduced from about 34 percent to 20 percent as a result of the transactions. The remaining 40 percent would include the other cable company stakes and general public interests. Sources say the parties also have been wrestling with what, if any, investment AT&T will make in TCI's cable system upgrades and manufacture of the new digital set-top boxes. This would be partly connected to AT&T's concern about participating in a developing high-speed Internet access service that has adequate technical support from existing cable systems. AT&T wants to use the national footprint created by its alliance with cable to provide local exchange carrier services. Time Warner and US West also have been talking to Microsoft Corp., Sun Microsystems, Oracle Corp. and Intel Corp. about their interest in buying into or buying up their Road Runner high-speed access service. Microsoft also is talking to @Home about creating and integrating broadband specific versions of its products in @Home's service.