At Home to acquire Excite fueling excitement for broadband Internet services

Weekly Corporate Growth Report, Jan 25, 1999

The Deal: At Home Corp. has agreed to acquire Internet search and directory company Excite in an all-stock transaction valued at $6.7 billion. Terms of the deal call for At Home to issue 1.041902 shares of its stock for each share of Excite. The agreement also provides At Home Network an option to acquire a 19.9% interest in Excite which becomes excerciseable under certain customary circumstances.

Discussion: America Online's deal with Netscape seems to have fueled a fire beneath the online world's behind. Excite, which is partially owned by AOL, has been especially eager to create a major alliance. The combined companies aim to accelerate broadband deployment and adoption by combining At Home's broadband technology platform, robust Internet backbone, and cable distribution agreements representing nearly 60 million homes worldwide, with Excite's award-winning portal and extensive narrowband reach. The combined companies will deliver to consumers the most personalized, open Internet services at any speed, any time, and on any device they choose.

The greatest barrier to mainstream consumer acceptance of the Web has been its slow speed. The new company will aim to accelerate broadband adoption by exposing the millions of Excite narrowband users to the benefits of a media experience that is enhanced by the broadband platform. A quicker Internet connection also spells happiness for advertisers; who will be able to reach an audience at a faster rate. This could also lead to success for a company like Excite who will be able to rack up greater advertising revenues as customers are able to see an increasing number of ads with their increased Internet connection speed.