In a pseudo-counteroffer, Comcast wants to
wrestle control of Excite@Home from AT&T.
Its plans to turn the tables on AT&T’s strategy to boost
its voting stake in Excite@Home won’t fly, but it’s just another day in an
ongoing made-for-TV movie.
This is like a bad episode of The Brady Bunch. Excite and @Home
hopped into bed after much hand-wringing over a content pairing with the
cable access provider. Some thought AOL, while
others eyeballed Yahoo!. But everybody knows venture
capitalist John Doerr’s bad blood with Yahoo, and his firm already had a
stake in Excite and @Home. Everybody’s happy.
In bursts Ma Bell and the whole shebang goes to hell in a hand basket. The
telecomm giant is a plumber. They like big pipes but couldn’t care less
about content. So AT&T scoops up TCI, and with it, a handsome stake
in @Home. Kleiner Perkins goes on the offensive and pulls a power play by
gifting half of @Home to Excite. It waters down AT&T’s stake, while keeping
Kleiner in the driver’s seat.
The VC firm didn’t trust AT&T. And it was right not to. Michael Armstrong
decides to scoop up Excite@Home, but he’s itching to shop off Excite to
some other suitor. No sooner are the two on their honeymoon when AT&T
starts two-timing Excite@Home with a not-so-discreet AOL content deal on
the table. Marcia! Marcia! Marcia!
Whose side is AT&T on anyway? Their own side. In the meantime,
Excite@Home’s share price is reduced to rubble, as nothing more than a
tracking stock, while investors are left holding the bag.
So along comes a suitor who loves the content play but cares little for the
pipes. Wild rumors start swirling over a three-way swap-meet that has Yahoo
rescuing Excite, and separating @Home in a joint-venture with AT&T. Did I
mention John Doerr doesn’t Yahoo!?
Now we’ve graduated to a steamy episode of Melrose Place. Excite@Home and
Road Runner move like snails in rolling out cable access, while in the
meantime, some smart blokes at Bell Labs make copper look like gold. Almost
overnight, cable has a bevy of DSL vendors competing for mind share in
every major market across the country.
AT&T by now is busy fighting with AOL over open-access to its pipes. After
some entertaining saber rattling and beltway lobbying, AOL and Time
Warner ran off to Vegas and eloped. AOL to AT&T, keep
the pipes. That foul smell that follows Peanuts Gang’s PigPen around is
starting to rub off on Ma Bell’s deals, past and present.
The AOL/Time Warner joint venture makes AT&T’s lollygagging look pretty
arrogant. While hindsight is 20/20, let’s read the tea leaves. Excite@Home
looks fairly valued given the shifting sands of the Internet landscape. A
Comcast life preserver sounds amicable, but I just don’t see a premium for
the pipes and content player any time in the future, as all the arguments
for a lucrative valuation have fallen by the wayside.
Excite@Home has been stuffed under AT&T’s pillow, and goodness knows it
deserves a better home. Comcast looks cozy; but for investors, it’ll come
up a day late and a dollar short. Did I mention Excite@Home’s former
skipper Tom Jermoluk jumped ship last week to come aboard as a general
partner at Kleiner Perkins? Whoever said captains go down with the ship?
Any questions or comments, love letters or hate mail? As always, feel free
to forward them to kblack@internet.com.
Marcia! Marcia! Marcia!
