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To: Stealhead who wrote (289)	2/23/1999 7:44:00 AM
From: Steve Hausser	Read Replies (1) \| Respond to of 13157

AT&T, TCI Shareholders OK Telco-Cable Deal Malone says Liberty will be prudent in its future investment decisions By K.C. Neel and Eric Glick The only thing left to complete AT&T Corp.'s $32-billion takeover of Tele-Communications Inc. is the fat lady's song as shareholders of both firms OK'd the deal last week and the FCC's five commissioners signed off on the marriage with few caveats. Still, the deal won't officially close until the first week of March, according to TCI chairman John Malone. When the alliance was announced last June, most industry insiders didn't expect the deal to close before June of this year. Now comes the hard part - putting all the pieces together in a way that enhances shareholder value and consumer acceptance. TCI president Leo Hindery, as head of AT&T's cable operations, will work closely with AT&T chairman-CEO C. Michael Armstrong to make AT&T an "any distance" company offering local, long-distance and wireless telephony services as well as video and data offerings. Although Armstrong dismissed speculation that Hindery and John Zeglis - who was to have been Hindery's boss - aren't getting along, sources close to the MSO said that Hindery would have left the company if it hadn't been reorganized. Zeglis will now oversee AT&T's international assets, and remains in charge of the company's wireless businesses. Hindery signed a five-year contract with AT&T and will report directly to Armstrong, who has made it clear he will be very "hands-on" with the company's cable unit. FCC chairman William Kennard said he's "cautiously optimistic" about the merger's benefits, but added, "We need to remind ourselves that mergers by themselves do not bring competition." Rather, he said, "investment and deployment of resources" are the keys to competition. The FCC's only caveats on the merger: TCI must spin-off its Sprint PCS stock and Liberty will be subject to program access rules. The FCC eschewed making any decisions on opening Internet access for alternative ISPs, despite intense lobbying from companies like America Online and Mindspring. "While these concerns are important, they are not unique or specific to this merger," Kennard said. He pointed out that given the nascence of cable's entry into the online market, "it would be imprudent to act now." Meanwhile, Malone caps a 27-year tenure as head of TCI's cable business following the merger. He'll now sail into another port as chairman of Liberty Ventures and have the opportunity to do what he likes best - make deals. Liberty will continue to be a portfolio company investing in various software and hardware telecommunications companies. Although Liberty will be armed with more than $5 billion in cash and will have another $8 billion in borrowing capacity, Malone said he's not going to go out to make big acquisitions any time soon. "I don't think people should expect us to buy anything with cash right now," he said. "The equity markets are very high today. This is not a great time to buy something with cash." Malone squelched speculation by some industry watchers that Liberty is in the market to buy a movie studio. "I won't let these guys invest in a movie studio," he said. "We tried that before and didn't do well. I don't mind if our affiliate companies take positions in that industry though." Rather than make a few large investments, Liberty will continue to do what it's been doing for a decade: invest small amounts of money in various companies, then watch them grow into bigger investments. "You've got to kiss a lot of frogs to get a prince," Malone said, noting that eight out of 10 investments may not pan out long-term, but one or two do have the potential of being home runs. He cited TCG and @Home as examples. The strategy has worked exceedingly well for TCI over the years. Malone said TCI has always had investments in around 50 different ventures at any given time and "those investments have provided returns that have equaled or surpassed TCI's operations without the capital investment." Liberty will continue to be opportunistic when it comes to investments, said CEO Dob Bennett. But the company will most likely continue to bet on the horses it already has in its stable for the best growth and returns on investment. "The companies we've already invested in will be the most successful for us," Malone said. Expansion of businesses will most likely come in the form of its affiliates' expansions. Some examples: the expansion of USA Networks' electronics commerce businesses and Discovery Networks' health initiative. That's not to say, however, that Liberty won't be looking for new interests. Malone is a big believer in e-commerce and the notion that customers want to interact with their TVs and PCs. "The economic model may not be there just yet. But we feel we need to be there now," Malone said. "Some 40% of all ads today ask you to do something. With interactivity, you can actually do it. Sign up for AT&T's One Rate? Click a button on your remote, it's done. Want to receive a video on that new car? Click and they'll send one off to you." (February 22, 1999)

To: Stealhead who wrote (289)	2/23/1999 12:09:00 PM
From: JackSkip	Read Replies (1) \| Respond to of 13157

Took your advice on @Home. The great news is that we will have the same customer base to draw upon. I hope that I have the constitution to hold on to the majority of my stock after we make our up and coming run. GIC and SFA will also be installing boxes into the same customer base. Have a good one. ********************************************************************** @Home sees '99 revenue of $400 million By Bloomberg News Special to CNET News.com February 21, 1999, 4:25 p.m. PT URL: news.com BOSTON--@Home will have $400 million in revenue this year and $2 billion by 2002 as it gains more subscribers, according to a senior executive of the high-speed cable Internet service. The company, which had 310,000 subscribers at the end of December, will be able to sell the service to 60 million homes by 2001 as it builds out its infrastructure, said Charles Moldow, vice president of sales and marketing for @Home. He spoke at Harvard Business School's "Cyberposium" technology conference in Boston. @Home, which uses existing cable TV lines to link personal computers in homes and businesses to the Internet at high speeds, had 1998 revenue of $48 million. The company agreed last month to buy No. 2 Internet search directory Excite, which had $154.1 million in revenue last year. That purchase doesn't mean @Home won't continue to strike partnerships with Excite competitors, Moldow said. "Even with the Excite acquisitions, we're still talking with Yahoo, Microsoft, and America Online about working together," he said. He didn't elaborate on what type of partnerships. @Home's "churn" rate, or the percentage of subscribers who cancel their service, is less than 3.5 percent, Moldow said. "Unavoided churn--people who die or move--is 4.5 percent," he said. "So it means [customers] aren't moving and aren't dying." Copyright 1999, Bloomberg L.P. All Rights Reserved.