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

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’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.

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