As [email protected] struggles to get its house in order, the hunt is on to find
a new CEO to make the necessary repairs.
George Bell, [email protected]
chairman and current chief
executive officer, said he will remain as acting CEO until the end of 2001,
but wants to start the search for a replacement now.
“It’s become increasingly apparent that we need two people here,” Bell
said. “A chairman, to work with issues like our cable partners and
strategy, and a CEO to handle the day-to-day operations. We’ve grown to be
one of the largest broadband providers in the world, and as such, we wanted
to make the announcement public, in the light of day, instead of having it
leaked to the press.
“We’ve hired a search firm to find somebody,” Bell continued. “Obviously,
we want to get a great person in here, (but) timing is a secondary issue.”
@Home’s pro forma revenues increased 51 percent to $169 million from third
quarter 1999, an eight percent increase since the second quarter 2000, but
still fell below analysts’ expectations of $185 million.
To offset its disappointing financial numbers, @Home reported that in
nearly three months time, the cable Internet service provider has garnered
an astonishing 510,000 new subscribers in nearly three months, from more
than 1.8 million June 30 to 2.313 million Sept. 30.
Bell cites reports of the nation’s increased demand for broadband Internet
access, growing from just one percent of total Internet users connected to
high-speed access last year to 42 percent this year. And, Bell said, 55
percent of those who are signed up now for broadband refuse to ever return
to dial up access again.
Mark McEachen, [email protected] executive vice president and chief financial
officer, credits @Home’s high subscriber rates to the cable affiliates in
the local markets.
“Our cable affiliates are aggressively marketing @Home’s Internet
offerings,” McEachen said. “As such, we have 7.17 percent market
penetration in homes in North America, with 510,000 new subscribers in the
third quarter, up 28 percent overall and an increase of 60 percent of new
customers generated in the second quarter.”
Subscriber growth is a bright spot for the company looking to get over the
rumored internal strife that saw some of @Home’s top executives and
employees leave last year. @Home hopes it has addressed that with the
August restructuring of its board of directors. AT&T will hold six seats
on the board, with Bell, three independent directors and one to be
determined at a later date taking one spot each.
In order to make it even easier for customers to sign up to @Home’s cable
services, McEachen also announced the company’s agreement with Radio Shack
to market its “truckless” cable install by the end of the month.
“Now, all a customer has to do is go to Radio Shack, where a sales
representative will take their phone number to see if they qualify for
cable Internet,” McEachen said. “All the customer has to do is plug in the
equipment, install the CD and make one phone call to the local cable
company to start the service. The only reason a technician would need to
come out to the house would be to install a cable jack or filters.”
As the company continues to get new customers, Bell said, [email protected] needs
to work to ensure that its current customers stay with his company.
Officials said @Home’s 2.3 million customers are seeing as much content as
12 million of America Online, Inc.’s subscribers. With broadband customers
38 percent more likely than dial up customers to make a purchase online,
the key is to get content to the customers.
McEachen reported 1,400 new commercial accounts from businesses who provide
content for their clients. That, and the completion of its acquisition of
Pogo.com in the fourth quarter, will bring a lot of new content to @Home
“We will do whatever it takes to be the leader in broadband content,
whether by buying or building out,” McEachen said.
Advertising revenues also saw an increase in the third quarter, despite the
soft advertising market. That shouldn’t be a problem for his company,
“As you will agree, the market is soft as advertisers assess their
strategies,” McEachen said. “As Fortune 500 companies increasingly look to
ramp up their online advertising efforts, they will look to our broadband
network to deliver their message.”