A slumping advertising market, particularly for its Web portal, is forcing
Excite@Home Corp. to slash costs and consider selling off its broadband-network
infrastructure to AT&T Corp. in order to raise cash.
In a conference call with analysts, Excite@Home chairman and CEO George Bell
said the company needed to raise about $75 million to $80 million to get it
through the rest of the year.
Bell said he had several options to raise that money, including issuing debt
or equity, selling off nonbroadband assets or a sale-leaseback arrangement for
its network infrastructure with AT&T.
'We see a very soft market out there, at least through the end of the year
and beyond,' Bell said. 'Some of the diversification efforts we have made to
move our media businesses beyond banner [ads], although going quite well, are
not big enough to turn around the ship.'
The ad downturn will affect revenue and earnings, with the company expecting
sales to reach between $140 million and $150 million and losses to climb to 14
cents to 15 cents per share.
Bell added that it was likely that the company would also have to reduce its
work force, but he did not elaborate.
He said the search for a new CEO continues, adding that the company has
spoken with former Telocity Inc. CEO Patty Hart, but he declined further
comment.
Bell added that Excite@Home terminated its agreement with Cablevision Systems
Corp., under which Cablevision agreed to market Excite@Home's service to its
customers. He said the Cablevision deal has contributed little revenue, and
Excite@Home would seek to recover about 20 million stock warrants previously
issued to Cablevision.
