In a move aimed at creating what it called “the new
media network for the 21st century,” @Home
Network and Excite Inc. Tuesday
announced they will merge under a $6.7 billion stock swap.
The companies said they expect to marry @Homes broadband
technology platform, Internet backbone, and cable distribution
agreements comprising 60 million homes globally with Excites
portal and narrowband reach.
@Home will issue 1.041902 shares of its Series A common stock for each
share of Excite. The transaction, expected to close in three months, has
already been approved by both companies boards of directors and now awaits
shareholder and regulatory approval. The agreement will also give @Home
Network an option to acquire a 19.9 percent interest in Excite, exercisable
under certain customary circumstances.
Citing no overlapping function duplications, the company said it plans to
significantly add employees to support new functions. Excite Chief
Executive Officer George Bell will retain his position as Excite becomes a
subsidiary of @Home and will report to Tom Jermoluk,
chairman and chief executive officer of @Home Network. Bell will also join
@Home’s board.
Jermoluk said while Web portals continue to enjoy success, their continued
success depends on support of high speed and “always on” functionalities.
With this in mind, the companies plan to grow broadband usage through
exposure of @Home benefits to the 17 million Excite
narrowband users.
“We are merging with Excite not only for what they have achieved, but
what we become together the new media network for the 21st century,”
Jermoluk said.
“The ubiquitous reach of dial-up access, combined with the fast expanding
footprint of broadband, gives consumers the ability to seamlessly migrate
between services at different speeds and devices with a consistent interface.
Excite and @Home will give consumers access to the information they
want, when they want it, whether they are using a PC, TV, or any other
communications device.”
AT&T, which is to become a major stockholder in @Home upon completion of
its acquisition of cable giant Tele-Communications, Inc., applauded the
@Home/Excite merger.
“On its own and when integrated with the broad range of AT&T
communications services, the @Home and Excite combination will provide
the consumer with a compelling interactive experience full of additional
choice and opportunities,” said C. Michael Armstrong, chairman and chief
executive officer of AT&T.
“This marks a new era of open choice and capability for
consumers. You can count on AT&T WorldNet service, which already has a
business relationship with Excite, to champion this new, allband
portal, while combining it with AT&Ts IP and traditional communications
services.”
The companies also expect to attract more advertisers, via Excites
MatchLogic division. Through MatchLogic, advertisers will be able to
target, measure and
report advertising on all devices on which the Excite and @Home
combination is offered. The new company also expects to blend MatchLogics
marketing with rich media technologies of @Homes
recently acquired Enliven Business Unit, formerly known as Narrative
Communications.
Using MatchLogic’s direct marketing capabilities, Excite and @Home plan to
build what it says will be one of the largest predictive consumer databases, combining Excite’s 20 million registered users with @Home’s service of
nearly 60 million homes worldwide. MatchLogic plans to continue to build
this database and offer one-to-one marketing services to
advertisers on narrowband, broadband and multiple devices.
“This merger brings together the leading broadband technology company
with a leader in Internet personalization and media,” said George Bell,
chief executive officer of Excite.
“In addition, this combination brings to advertisers the most powerful
interactive marketing solutions available
the ability to target, measure and report their advertising in a
single, unified venue across narrowband, broadband, and ultimately all
devices.”
