Gateway, EarthLink Discuss Acquisition

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,, 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.

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