Gregory Mullineaux, everybody wants to get into the www ecommerce business. The question is who will succeed. One of the most important ingredients of success is the ability to focus on the job at hand.IMHO running an International phone service is complicated enough. Running ecommerce is similarly very complex. If you try and do both I think it's too big of a byte. History is full of companies that went out of their core business expertise only to fail 5 years later and sell back what they bought at a loss.
What AOL has going for it is the early history and experience; the ability to catch up to a giant software Co (MSFT - MSN )starting with nothing;if MSFT can't make MSN fly what makes you think AT&T can? ( Remember AT&T's previous foray into selling phones from Mall Kiosks: it failed and they sold the biz to Phillips NV I believe.
I am not worried. I am looking for 50 points when AOL picks a broadband pardner,
TA
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quote.bloomberg.com
AT&T, Microsoft Discussed Internet Asset Sale, USA Today Says
Washington, Jan. 8 (Bloomberg) -- Microsoft Corp., the world's largest software company, and AT&T Corp., the largest U.S. long distance company, have talked about AT&T buying Microsoft's on-line media properties, though for the present AT&T appears to have decided against a Microsoft transaction, USA Today reported, citing unnamed sources close to the companies. The newspaper said the discussions included a dinner at Redmond, Washington-based Microsoft president Bill Gates' house with AT&T Chief Executive Michael Armstrong and President John Zeglis last fall and dealt with the sale of the Microsoft Network Internet service provider and stakes in web sites such as Microsoft's on- line Slate magazine and MSN portal. According to USA Today, Microsoft wanted an undisclosed amount of money for the units as well as an agreement that New York-based AT&T would use and promote Microsoft Windows NT software.
Earlier this week, At Home Corp., the No. 1 high-speed Internet service provider, said it awarded AT&T a contract to carry its traffic on AT&T's nationwide network. (USAT 1/8 B1 www.usatoday.com)
bloomberg.com
AT&T Sees Higher 1999 Earnings, Sales; Will Split Stock, Buy Back Shares
AT&T Sees Higher '99 Profit, Sales; Will Split Stock (Update2)
(Updates with details throughout.)
New York, Jan. 8 (Bloomberg) -- AT&T Corp., the largest U.S.
telephone company, said it expects higher-than-expected sales and
earnings for 1999 even as it accelerates spending to provide
phone services over the cable-television network of its merger
partner Tele-Communications Inc.
AT&T expects to earn $4.20 to $4.30 a share in 1999,
excluding the impact of the $56.5 billion purchase of TCI, the
nation's second largest cable-TV company. AT&T is expected to
earn $4.09 a share, the averages forecasts of about 24 analysts
surveyed by First Call Corp.
TCI and other pending acquisitions are part of Chief
Executive C. Michael Armstrong's plan to cut AT&T's dependence on
consumer phone operations and instead focus on fast-growing
wireless, data and video services. Capital spending this year
will rise as much as 50 percent, helping AT&T tap into the fast-
growing markets and accelerate sales growth to as much as 7
percent this year.
''Armstrong's been more than a breath of fresh air there,
taking control of the company and fundamentally changing the way
they do business,' said Daniel Zito, an analyst at Legg Mason
Wood Walker Inc. in Baltimore, who has an ''outperform'' rating
on AT&T. ''He's changing the attitude at AT&T.''
Shares of AT&T shares rose 1/4 to 82 1/2 in early trading of
about 4 million, making it the eight most actively traded in U.S.
markets. Earlier, they rose to a record 84 3/8.
AT&T is holding an analyst meeting in New York City today at
the Equitable Hotel. Executives scheduled to speak include
Armstrong, President John Zeglis, Chief Financial Officer Daniel
Somers and Robert Annunziata, president of AT&T Business
Services.
Since Armstrong joined the company 14 months ago, AT&T's
shares have climbed about 70 percent. By comparison, the Dow
Jones Industrial Average rose 27 percent over the same time
period.
Separately, AT&T announced a 3-for-2 stock split and buyback
of as much as $4 billion of its shares -- its first buyback in
years.
Armstrong
Under Armstrong, AT&T has vowed to spend billions of dollars
to upgrade TCI's cable lines into consumers' homes so it can
offer an alternative to the local phone service most U.S.
consumers get from regional phone companies such as Bell Atlantic
Corp.
Prior to Armstrong, AT&T lacked a strong vision for how it
would provide local phone services, beef up its international
operations and focus on Internet and data services.
''He's cut costs and charted a strategic course'' by
purchasing TCI, the communications network of International
Business Machines Corp. and an alliance with British
Telecommunications Plc, said Robert Wilkes, an analyst at Brown
Brothers Harriman & Co.
In 1999, AT&T and TCI expect to conduct ten market trials in
which they will jointly offer voice, video and high-speed data
services to customers in two San Francisco Bay area communities,
and in Chicago, Dallas, Pittsburgh, Seattle, Denver, Salt Lake
City, Portland, Oregon, and St. Louis.
AT&T said it plans to quickly expand these market trials and
be offer local phone services in most TCI markets in 2000.
The TCI upgrades, though, will come at a cost.
AT&T said it will increase 1999 capital spending to $11
billion to $12 billion, including TCI. That's as much as 50
percent above 1998's spending of about $8 billion, which excludes
TCI.
TCI will cut 1999 earnings per share by about $1 on a pro
forma basis, assuming the acquisition closes at the end of the
first quarter, AT&T said. The company's $4.20 to $.30 a share
earnings estimates excludes the impact of the stock split and
buyback.
Revenue Growth
AT&T also said it expects 1999 revenue growth of 5 percent
to 7 percent on a pro forma basis and including the acquisitions
of TCI, Vanguard Cellular Systems and IBM's communications
network. That's above previous estimates of revenue growth of 4
percent to 6 percent.
AT&T said revenue from providing business services will rise
7 percent to 9 percent amid growth in data, local and wholesale
services.
AT&T Wireless, which provides nationwide cellular services,
will continue to expand its national network. It expects growth
in revenue and cash flow, or earnings before interest, taxes,
depreciation and amortization, to be in the ''high teens.'' The
company didn't elaborate further.
AT&T Solutions, which provides consulting services, expects
to report revenue growth of about 30 percent.
As expected, revenue in its main consumer long-distance
phone operations will fall 2 percent to 4 percent due to lower
prices and decreased use of calling card and other higher priced
services.
Expenses
Thanks to the elimination of billions of dollars in
expenses, selling, general and administrative expenses will be
cut to 21 percent of sales, excluding wireless and local phone
operations, in 1999. That's well below the 30 percent of a year
ago.
AT&T estimated 1999 pro forma cash flow would grow in the
high teens, to $18 billion to $20 billion, which would be
primarily reinvested in its business.
AT&T said it's shifting much of its capital spending to
wireless, local phone, data and Internet operations from its core
long-distance voice network.
Recently, the U.S. Department of Justice approved AT&T's
acquisition of TCI after the companies agreed TCI would sell its
stake in Sprint PCS, a provider of wireless phone services
controlled by rival Sprint Corp., over a five-year period.
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