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@Home, Excite Announce $6.7 Billion Merger

In a move aimed at creating what it called "the new media network for the 21st century," @Home Network and Excite Inc. Tuesday announced they will merge under a $6.7 billion stock swap.

The companies said they expect to marry @Homes broadband technology platform, Internet backbone, and cable distribution agreements comprising 60 million homes globally with Excites portal and narrowband reach.

@Home will issue 1.041902 shares of its Series A common stock for each share of Excite. The transaction, expected to close in three months, has already been approved by both companies boards of directors and now awaits shareholder and regulatory approval. The agreement will also give @Home Network an option to acquire a 19.9 percent interest in Excite, exercisable under certain customary circumstances.

Citing no overlapping function duplications, the company said it plans to significantly add employees to support new functions. Excite Chief Executive Officer George Bell will retain his position as Excite becomes a subsidiary of @Home and will report to Tom Jermoluk, chairman and chief executive officer of @Home Network. Bell will also join @Home's board.

Jermoluk said while Web portals continue to enjoy success, their continued success depends on support of high speed and "always on" functionalities. With this in mind, the companies plan to grow broadband usage through exposure of @Home benefits to the 17 million Excite narrowband users.

"We are merging with Excite not only for what they have achieved, but what we become together the new media network for the 21st century," Jermoluk said.

"The ubiquitous reach of dial-up access, combined with the fast expanding footprint of broadband, gives consumers the ability to seamlessly migrate between services at different speeds and devices with a consistent interface. Excite and @Home will give consumers access to the information they want, when they want it, whether they are using a PC, TV, or any other communications device."

AT&T, which is to become a major stockholder in @Home upon completion of its acquisition of cable giant Tele-Communications, Inc., applauded the @Home/Excite merger.

"On its own and when integrated with the broad range of AT&T communications services, the @Home and Excite combination will provide the consumer with a compelling interactive experience full of additional choice and opportunities," said C. Michael Armstrong, chairman and chief executive officer of AT&T.

"This marks a new era of open choice and capability for consumers. You can count on AT&T WorldNet service, which already has a business relationship with Excite, to champion this new, allband portal, while combining it with AT&Ts IP and traditional communications services."

The companies also expect to attract more advertisers, via Excites MatchLogic division. Through MatchLogic, advertisers will be able to target, measure and report advertising on all devices on which the Excite and @Home combination is offered. The new company also expects to blend MatchLogics marketing with rich media technologies of @Homes recently acquired Enliven Business Unit, formerly known as Narrative Communications.

Using MatchLogic's direct marketing capabilities, Excite and @Home plan to build what it says will be one of the largest predictive consumer databases, combining Excite's 20 million registered users with @Home's service of nearly 60 million homes worldwide. MatchLogic plans to continue to build this database and offer one-to-one marketing services to advertisers on narrowband, broadband and multiple devices.

"This merger brings together the leading broadband technology company with a leader in Internet personalization and media," said George Bell, chief executive officer of Excite.

"In addition, this combination brings to advertisers the most powerful interactive marketing solutions available the ability to target, measure and report their advertising in a single, unified venue across narrowband, broadband, and ultimately all devices."