@Home Network
From Wikipedia, the free encyclopedia
-
This article is about the @Home broadband service. For the Seti@home project, see Seti@home. For other @home projects, see distributed computing.
@Home Network was a high-speed cable Internet service provider from 1998 to 2002. It was founded by Milo Medin, cable companies TCI, Comcast, and Cox Cable, and William Randolph Hearst III, who was their first CEO, as a joint venture to produce high-speed cable Internet service through two-way television cable infrastructure. These cable companies were referred to as MSOs or Multi System Operators.
At the company's peak it provided high speed Internet service for 4.1 million subscribers in the US, Canada, Japan, Australia, and Benelux, operating four joint ventures, three of which were international.
Contents |
[edit] Chief executive officers
- William Randolph Hearst III 1996 - 1997
- Thomas Jermoluk 1997 - 2000
- George Bell 2000
- Patti S. Hart 2001 - 2002
[edit] History
The Passing of the Telecommunications Act of 1996 enabled cable companies to start to offer Internet telephony services to customers.
Brainchild of the company's first VP of Engineering and later Chief Technology Officer Milo Medin, the company got its start from venture capital firm Kleiner Perkins Caufield & Byers.
On July 11, 1996, @Home Network went public with an initial public offering of $10.50 a share and raised $94.5 million in capital by the end of the first day with 9 million shares issued. In the SEC report for the initial public offering were cash flow positive revenues of $1.8 million for the first six months of 1997 with a loss of $22.8 million, up from $8.3 million the year before. Underwriters were Morgan Stanley, Merrill Lynch, and Ambrecht & Quist.
In December 1998, Excite was in serious merger negotiations with Yahoo! inc in an agreement to purchase the Excite portal for a price between $5.5 billion and $6 billion. On December 19, at Kleiner Perkins prompting, @Home Network's Chairman and Chief Executive Officer Thomas Jermoluk met with Excite’s Chairman and CEO George Bell, according to documents filed with the SEC, and a deal was hashed out for the purchase of Excite and its debt.
On January 19, 1999, @Home Networks was acquired by the Internet portal Excite. The $6.7 billion merger became one of the largest mergers of two Internet companies ever; the combined entity would marry the profitable high speed Internet network of @Home and expand its existing Home.com portal with Excite’s search engine and Internet portal. The combined entity's external name became Excite@Home, however the stock symbol and regulatory filing records remained properly known as At Home Corporation (ATHM).
As a side effect of the deal, @Home’s Chairman and Chief Executive George Tom Jermoluk (also called T.J. for short) stepped down as Chief Executive Officer, but remained Chairman of the board, and Excite’s former Chairman and Chief Executive George Bell who was the President of the Excite division of @Home, moved over as Chief Executive of the new Excite@Home entity.
The new Excite division took the existing @home.com web portal that was provided to subscribers of the service and merged it with the Excite portal. Along with this was the movement toward personalized web portal content, a concept now commonplace in all Internet portals today.
In just months following the merger, Excite@Home's Excite division purchased iMall for about $425 million in stock. Most significant of these was the purchase of the online greeting card company Blue Mountain Arts, Excite@Home issued 11.2 million shares, worth close to $430 million, and paid $350 million in cash. In addition Excite paid for sponsorship of Infiniti IndyCar driver Eddie Cheever, Jr., through the 2000 and 2001 Indy racing seasons for an undisclosed amount.
On June 10, 1999 the @Home cable division announced a joint venture with Australia with Cable & Wireless Optus to form a new company, AtHome Network Australia. The projected homes past for the deal was 2.2 million.
The merger between Excite and @Home fell disastrously short of expectations. The stock which once soared at $128.34 a share in the first quarter of 1999 and had a market cap of $35 billion had fallen to $1 a share by the third quarter of 2001 when the company formally filed for Chapter 11 bankruptcy protection. The new Chief Executive George Bell worked from his home in Massachusetts and the Chief Financial Officer Mark McEachen lived in LA, flying in only once per week to the Bay Area to conduct business. Both executives were part of the former Excite executive team. More significantly, expenses ran far ahead of revenues. The burst of the dot-com bubble in March of 2000 and the subsequent collapse of the Internet advertising market further limited the company's prospects by making it harder to raise investor money to keep the company afloat in the absence of retained earnings. By 2001, the company was running out of cash.
On September 21, 2000 George Bell stepped down as Chief Executive Officer and reprised his role as President of the Excite division. The stock was trading at $15.38 a share, a drop of 90% of the company's evaluation during his leadership. On April 23, 2001, Patti S. Hart, the former Chief Executive Officer of Telocity joined Excite@Home as its third CEO and @Home's fourth. In the same announcement Current Chairman George Bell resigned and left the company completely. The news was not good as the company also reported first-quarter net loss of $61.6 million, or 15 cents per share, on revenue of $142.8 million compared with a loss of $4.6 million, or 1 cent, on revenue of $138 million in the same period the prior year.
On June 11, 2001 Excite@home announced what it had raised $100 million in fresh financing from Promethean Capital Management and Angelo Gordon & Co. Part of the deal not widely disclosed was that the loan was repayable immediately if Excite@Home stock was delisted by Nasdaq. The loan, structured as a note convertible into shares of Excite, had an interest rate of zero. The key aspect of the deal was that Promethean gained first dibs on Excite's assets.
By August 20, 2001, @Home fired their auditor firm Ernst & Young replacing them with PricewaterhouseCoopers. In addition, they received a demand for the immediate repayment of $50 million in debt by bondholders Promethean Capital Management and Angelo Gordon & Co. At the same time, both Cox Cable and Comcast announced that they would separate from the broadband Internet service by Q1 of 2002.
On September 13, 2001 Excite@Home sold Blue Mountain Arts for $35 million to American Greetings, less than 5% of what they had paid less than two years earlier.
On October 1, 2001 the company filed for chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Northern District of California. The company's remaining 1,350 employees would be laid off over the following months into the first quarter of 2002. As part of the agreement @Home's national high-speed fiber network access would be sold back to AT&T for $307 million in cash. At Home Liquidating Trust, became the successor company to Excite@Home charged with the sale of all assets of the former company.
[edit] Cobranded @Home services
- AT&T@Home
- Cogeco@Home
- Comcast@Home
- Cox@Home
- Rogers@Home
- Shaw@Home
[edit] Joint ventures
- Cable & Wireless Optus
- Excite Chello
- @Work
- @Home Solutions
