[email protected]’s Ticker Fever

Ever since the merger last May of Internet search portal Excite and
cable access provider @Home, the combined company has been criticized
for lacking strategic direction.

Now it’s clear exactly where [email protected] (ATHM)
is headed: the IPO launch pad. Again.

On Tuesday the company announced a joint venture with Dow Jones to
launch a Web portal targeting small and mid-sized businesses, with plans
to take the combined entity public later this year.

It’s the second time in the past three months that [email protected] has
revealed intentions to spin off a new ticker. Last November, the company
said it would create a tracking stock for its Web media assets.

That move came in response to investor confusion about [email protected]’s
business plan and rumors that it was considering selling its media
assets, including the Excite.com Web portal. Despite much initial hype
about the synergies between Excite’s content offerings and @Home’s
high-speed access, there has been little evidence that one has created
great value for the other.

The market certainly hasn’t been persuaded. Shares of ATHM are down
sharply since the merger was announced on Jan. 19, 1999; Tuesday
afternoon’s price of 33 1/2 is 42 percent below the 57 11/16 close on that
day, and is 63 percent below ATHM’s all-time high closing price of $91
per share last April 13.

While it’s way too early to tell how either of the planned stock
offerings will do, the arrangement with Dow Jones is the more
interesting and potentially promising of the two. Partnering with a
well-known and respected business content provider should ensure heavy
interest from investors, especially since the site, Work.com, will
target the B2B market.

And since Dow Jones and [email protected] intend to own the majority of
shares, short supply and high demand could create a moonshot when the
Work.com IPO hits the street.

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