RealTime IT News

Core Services Drive EarthLink's Growth

EarthLink Inc. Thursday reported business is booming in its traditional dial-up Internet access, small business Web hosting service and broadband Net access.

In its financial report for the second quarter EarthLink's revenues exceeded $230 million, representing a 41 percent increase over revenues for the same time last year. Sales of Internet services also rose 5 percent over EarthLink's first quarter performance.

Net loss for the quarter before acquisition and merger-related costs was $35.2 million, or a net loss of 29 cents a share.

As of June 30, 2000, EarthLink has approximately 3.7 million paying subscribers, approximately 80,000 user are broadband customers, representing 78 percent increase over the first quarter subscribers.

Garry Betty, EarthLink chief executive officer, said the national Internet service provider also managed to reduce its customer churn rates.

"In particular, our broadband services have experienced significant growth, with customer growth of 567 percent and revenue growth of 68 percent over last year," Betty said.

"We also remained focused on improving customer retention, lowering average monthly churn from 5 percent in the first quarter to 4.2 percent for the second quarter, as well as carefully managing expenses, which contributed to our improved financial results for the quarter," he added.

EarthLink's broadband revenues for the second quarter totaled $10.4 million or 4 percent of total second quarter revenues. Its broadband service footprint currently covers 55 major metropolitan areas in the U.S.

Betty said the favorable broadband numbers demonstrate its ability to successfully penetrate the high-speed market and capture a major piece of the rapidly growing Net sector.

Narrowband revenues for the second quarter were $196.3 million accounting for 85 percent of EarthLink's total revenues for the period.

EarthLink moved to acquire OneMain.com's 762,000 subscriber base in a deal expected to close in the third quarter.

EarthLink's Betty attributed its narrowband success in serving its core member base.

"Our commitment to providing reliable, premium quality customer service and support will spur further growth in this sector while allowing us to upgrade existing customers to higher-end services such as broadband and Web hosting," Betty said.

EarthLink picked up another $8.2 million in content, commerce, and advertising revenues for the second quarter. EarthLink had a total of 71 partners in its premier promotion program, as well as 107 merchants serving up e-commerce Web sites at its online mall.

EarthLink reported it currently hosts more than 135,000 Web sites through its Web service division. Web hosting revenues totaled $16 million.