The chief of Excite@Home Corp. Tuesday denied a report which said the company is considering a $17 billion buyout offer from Yahoo! Inc.
Only eight months after Excite Inc. bought @Home Corp. for $6.7 billion in stock, Business Week’s online edition late Monday reported Yahoo! and Excite@Home have been talking about a deal that could top $17 billion.
According to industry insiders, Excite@Home and Yahoo have been talking about a deal for the past six weeks.
George Bell, Excite@Home’s chief executive officer said there was nothing to the buyout rumors. He said Excite@Home has talked with Yahoo!, America Online and other Internet companies about taking a spot on the Excite portal.
For the moment, AT&T Corp. remains the controlling shareholder in Excite@Home. Friction between top executives at of the two companies may be the prime motivation for a potential sale to Yahoo.
Business Week reported legendary venture capitalist and excite@Home board member John Doerr and Excite@Home Chief Executive Tom Jermoluk have been battling with AT&T Chief Executive Officer C. Michael Armstrong over the company’s strategy. The pair want the company to resemble an online service like America Online Inc. that would have content and other offerings designed to get customers to use their services rather than their portal competitors.
Meanwhile, AT&T executives would prefer to offer subscribers content over the @Home network for as many companies as possible, including industry giants Yahoo! and Microsoft Corp. AT&T seeks to quickly expand their customer base in order to help pay off the billions of dollars they are investing their cable infrastructure.
Sources add that Yahoo! does not want to operate an infrastructure maintained by the likes of @Home. At the same time, AT&T wants to retain influence over the @Home business. One plot that could seal the deal would be for Yahoo! to absorb Excite and spin-off @Home into a separate company with Yahoo! and AT&T as major shareholders.
The report stressed the talks are considered preliminary and there is much work to be done before a deal could be sealed.
If a deal materializes, it would be the latest in a string of high-profile buys for Yahoo!. In late January, Yahoo! bought online community GeoCities for about $5 billion in stock. In early April, it followed with a $5.6 billion stock purchase of streaming media aggregator Broadcast.com.
