Excite
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- See @Home Network for more information about that company.
Excite is an Internet portal with an included search engine. It was once one of the most recognized brands on the Internet, and was one of the pioneering "dotcoms" of the 1990s, along with Yahoo! and Netscape.
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[edit] Offerings
Excite offers a variety of services, including search, web-based email, instant messaging, stock quotes, and a customizable user homepage. The news and other content on the portal is provided by over 100 different providers.
[edit] History
Excite was founded as Architext in 1994 by Graham Spencer, Joe Kraus, Mark Van Haren, Ryan McIntyre, Ben Lutch and Martin Reinfried. The founders were all students in computer science (except for Kraus, who was a political science major) at Stanford University. In July 1994 International Data Group paid $100,000 to the team to develop an online service.
In January 1995 Vinod Khosla, (also a former student of Stanford) a partner at venture capital firm Kleiner Perkins Caufield & Byers, arranged $250,000 first round backing with $1.5 million in ten months. In addition Geoff Yang, of Institutional Venture Partners, brought in $1.5 million in financing. It took another year, until December 1995, to launch Excite on the Web.
In January 1996 George Bell joined Excite as their Chief Executive Officer. Later that year the company bought two search engines, Magellan and WebCrawler, and went public on April 4, 1996 with an initial offering of two million shares priced at $8.50; just seven days before Yahoo!'s initial public offering on April 11, 1996, placing 2.6 million shares of common stock at $13.50 per share. It gained exclusive distribution agreements with companies such as Netscape, Microsoft, and Apple Computer.
In June of 1997 Intuit, maker of Quicken and TurboTax, purchased a 19% stake in Excite—a deal worth $40 million—and also released details of a seven-year partnership deal.
On October 16, 1997 Excite purchased comparison shopping service company Netbot for around $300 million. At the same time Intuit announced the launch of "Excite Business & Investing". Later that year a deal with Ticketmaster to provide direct online ticketing was finalized.
In December 1998 Excite was in serious merger negotiations with Yahoo! for 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 Thomas Jermoluk met with Excite’s Chairman and Chief Executive George Bell, according to documents filed with the Securities and Exchange Commission (SEC) and a deal was hashed out for the purchase of Excite and its debt.
[edit] Excite@Home
On January 19, 1999, Excite was acquired by @Home Network; the largest high speed cable Internet service provider. 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 external name became "Excite@Home", however the stock symbol and the company's name in regulatory filing records remained as "At Home Corporation" (ATHM).
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 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 Indy car driver Eddie Cheever, Jr., through the 2000 and 2001 Indy racing seasons for an undisclosed amount.
The merger between Excite and @Home fell disastrously short of expectations; the stock once soaring 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 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 Los Angeles, 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 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 devision. The stock was trading at $15.38 a share—a drop of 90% of the companies valuation 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 that it had raised $100 million in financing from the 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 is 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 Prometheus gain first dibs on Excite's assets.
By August 20, 2001, they fired their auditor firm Ernst & Young, replacing them with PricewaterhouseCoopers, the same firm used for two decades by AT&T. In addition, they received a demand for the immediate repayment of $50 million in debt from convertible bond holder 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] Excite Network
During the collapse of Excite@Home, a small Irvington, New York–based Internet company, iWon.com, had quietly started designing a new, yet familiar, Excite website hoping that they could acquire the Excite.com domain name and brand in the bankruptcy proceedings. A few weeks later, the company made a $10 million (USD) joint bid with InfoSpace, a Seattle Internet company, to purchase the domain and brand, but no other technology assets or employees. On November 28, the court accepted the bid and gave iWon less than three weeks to launch a new Excite portal.
"I feel like a guy who lived through a hurricane, got pounded and pounded and managed to survive when everyone else was destroyed," Bill Daugherty, iWon's founder and then co-chief executive time told The New York Times. "Suddenly you walk outside and because of the storm you have beachfront property. That's what Excite is to us."
On Sunday, December 16, 2001, iWon launched the new Excite and transferred millions of Excite users, along with their customized start pages, email accounts, and stock portfolios, to their new home. For its part in the acquisition, Infospace owned and operated the web search function on Excite, an arrangement that proved to be short sighted for iWon as search became a big business on the Internet in the years to follow.
iWon changed its corporate name to the Excite Network, and continued to operate Excite, in addition to iWon and a third portal, MyWay. Outside of the United States, Excite Italia took control of portals in Germany, Spain, France, Italy, Japan, the Netherlands, and Austria.
[edit] Freelane by Excite
Former site: freelane.excite.com
In a bid to compete against Internet Service Providers like NetZero and Juno Online which offered free or low-cost dial-up Internet services in the United States, Excite started offering their own "no-pay" Internet service available for private customers. Excite announced that they had reached this partnership with the 1stUp.com company to create the Internet Service known as FreeLane by Excite.
As part of this deal 1stUp would allow Excite customers to download software in order for them to able to log-on to the Internet.
The software would then rotate a series advertiser sponsored banner advertisements on the user's computer while they surfed the Internet. After some time, money problems for 1stUp developed and the company went out of business. Excite then switched to another partner named WorldShare with Excite continuing to offer their FreeLane Intenet product which became rebranded as FreeLane version 2.0. through WorldShare. This continued until they announced that as of March 1, 2001 Freelane would no longer be available for free to users and the product was eventually shut down.[1], [2]
[edit] Acquisition by Ask Jeeves
Excite continued to operate without many upgrades until the Excite Network was acquired by Ask Jeeves (now Ask.com) in March 2004. Ask Jeeves promised to rejuvenate iWon and Excite, but those upgrades did not happen. Ask Jeeves management became distracted, according to the East Bay Business Times, first by a search feature arms race with Google and Yahoo!, and then by its $1.85 billion merger with Barry Diller's InterActive Corporation, announced in March of 2005.
"Hopefully, as we start to invest more and get the staff in place and some of the changes to the portal properties that we want, we hope to see (revenue) grow back in the latter half of the year," said Ask Jeeves CEO Steve Berkowitz during a conference call with analysts on April 27, 2005.
On May 20, 2005, Ask Jeeves made two announcements regarding steps towards bringing the Excite brand back together again.
In one announcement, Ask Jeeves said it had acquired Excite Italia B.V., the operator of Excite Europe, from Tiscali, S.p.A., giving the company ownership of Excite's Internet domains throughout Europe as well as control of existing portals in Spain, Italy, France, the United Kingdom, Germany, Austria, and the Netherlands. This leaves Asia as the only region where the Excite brand is not owned by Ask Jeeves.
Ask Jeeves also announced a comprehensive settlement of litigation with InfoSpace involving Excite in the United States. Under the terms of the agreement, both Ask Jeeves and InfoSpace would share marketing costs and revenue from the Excite web search function. "We look forward to working with InfoSpace to enhance the search experience on Excite, now that our interests are aligned," said Steve Berkowitz, CEO of Ask Jeeves.
[edit] Ownership
Excite is now owned by IAC Search & Media, which is also the parent of Ask.com and Evite, and is part of Barry Diller's InterActiveCorporation.
[edit] References
- Business 2.0, August 28, 2001
- USA Today, October 1, 2001
- Various company press releases
[edit] See also
[edit] External links
- Excite
- Excite UK
- CNET Special Report on Excite@Home Bankruptcy
- Background on iWon's acquisition of Excite (New York Times)
- Stanford Magazine:The Millionaires Next Door by Tia O'Brien
- Interview with Joe Kraus, Excite Co-Founder
