PointCast Buyout Talks Stall, Employees Laid Off

Former Internet high-flyer PointCast
Inc.
, architect of push technology, confirmed it laid off 85 of
its 220 employees late Thursday, following the failure to successfully negotiate an
Internet pact with regional operating Bell companies.

The company’s one-year alliance with Bell South, US West, Bell Canada and
Microsoft fell apart, after the RBOCs told PointCast they preferred to build
an online presence with other Internet partners or produce their own Web
efforts.

PointCast had been trying to create a new broadband offering, dubbed
Project NewNet, to compete with cable service entities such as @Home.

PointCast laid out the plan to the consortium, and had expected the group
to offer to acquire the once touted Internet pioneer. The sticking point,
according to company insiders, came when Bell Atlantic and SBC declined to
continue negotiating with PointCast consortium and instead aligned with America Online Inc.. Other consortium members then
decided to nix further negotiations.

The company earlier this week offered employees bonuses if they stayed on
with the struggling firm for another month.

Analysts estimate PointCast needs $15-$20 million to stay afloat. The
company has numerous partners such as The Wall Street Journal, CNN and Ziff-Davis. PointCast has undergone
previous employee churn, with the recent departure of its president David Dorman,
who has since been replaced by Phil Koen. Dorman is expected to head a new
venture owned by @Home parent, AT&T.

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