EarthLink Inc. announced Wednesday it is on track to grow to 4.5 million
subscribers by the end of the year.
If EarthLink (ELNK)
attains its year-end goal it will produce about $1 billion in revenue and
secure its rank as the second largest ISP in the U.S.
Garry Betty, EarthLink chief executive officer, said the company’s strategy
to attract narrowband users to its online services is working well to fuel
its broadband service expansion.
“We continue to successfully execute on our strategy of attracting and
retaining narrowband users and upgrading these customers to more advanced
Internet services,” Betty said. “In the first quarter, we added 340,000 net
new members from our marketing efforts, which is the best quarter of
organic growth in the company’s history.”
As of March EarthLink had approximately 3.5 million subscribers,
representing a 54 percent increase in its member base from 2.3 million
members a year ago and an 11 percent increase over its member base of 3.1
million members as of year-end 1999.
EarthLink customer counts include its completed merger with MindSpring Enterprises, Inc., which
brought almost 1.3 million customers onboard.
Of EarthLink’s 3.5 million members approximately 45,000 subscribers access
the Internet through its broadband services. The tally represents an 80
percent increase over the fourth quarter of 1999 results.
EarthLink reported first quarter revenues of more than $219 million, or $90
million more than its 1999 first quarter results. Its net loss for the
quarter before acquisition expenses and one-time expenses related to the
merger of EarthLink Network and MindSpring was $50.9 million.
Narrowband revenues represent $185 million in EarthLink’s first quarter
earnings while broadband services accounted for list less than $1 million.
EarthLink’s broadband services now cover 21 major metropolitan areas, and
are expected to reach 40 areas by the end of the summer.
Betty said he was pleased with the solid growth EarthLink saw in the first
“Our growth in our core business combined with our higher-end services
demonstrates EarthLink’s success in capturing, satisfying and upgrading our
narrowband members,” Betty said.
“We are thrilled to be an early mover in the wireless Internet market
through our long standing relationship with Sprint,” Betty said. “This new
service provides our users with enhanced functionality of our already
existing EarthLink service offerings, and deepens our relationship with our
customers as they can now access EarthLink’s quality information anywhere
EarthLink also reported that it provides hosting services for more than
121,000 Web sites marking a 78 percent increase over last year’s 68,000
clients. Web hosting revenues account for $16.3 million or seven percent of
total revenues for the quarter.
The national ISP earned $9 million in content, commerce and advertising
revenues for the first quarter, but is on track to realize approximately
$50 million in the same category this year.