Computer maker Gateway Inc. reportedly wants to expand its Internet access offerings by acquiring EarthLink Network Inc.
Rumors of the talks sent EarthLink shares rocketing Tuesday, giving it a market cap of more than $1.8 billion.
The Wall Street Journal said the companies haven’t reached the point of
discussing financial terms of a deal. Neither company would comment on the talks.
Gateway recently acquired a stake in an online computer software reseller
and launched its own ISP, Gateway.net, in 1997. In May, Gateway invested $200 million for a stake in Internet operating company CMGI.
EarthLink has experimented with a range of cable and high-speed telephone
offerings, but still relies on dial-up users. By hooking up with a PC
company, the Internet access provider close the gap between it and America Online Inc. and AT&T Corp.’s WorldNet.
EarthLink claims 1.2 million customers. Sprint Corp. owns nearly 26.5
percent of the company.