Excite@Home walking its last mile

In a San Francisco bankruptcy court Tuesday, a judge will likely ease Excite@Home Inc.'s way to an orderly shutdown.

Excite@Home shut off high-speed Internet service to AT&T Broadband this month, forcing AT&T Broadband to move Internet access customers to its own network. Excite@Home also threatened to do the same to Cox Communications Inc., Comcast Corp. and other cable companies, but negotiations produced an interim settlement deal last week to keep Excite@Home up and running for three more months. The time allows the cable operators to continue to finish building out their own network so that they can transfer customers there.

On Feb. 28, Excite@Home shuts down for good, the company said.

All that's left is for the court to formally approve the US$355 million cash injection cable companies are giving to Excite@Home to keep it running during the transition, for the cable companies to switch customers over to their own networks over the next three months, and for someone at Excite@Home to shut off the lights and close the door of its Redwood City, California, headquarters.

Two years ago, with a market valuation in the billions, Excite@Home looked like a rising star. In the Internet gold rush days, cable companies sought to build out their Internet access network infrastructure rapidly. But in order to do that, they had to tweak their existing cable TV infrastructure by, among other things, adding the necessary servers and routers at the cable head-end, then connecting them to an Internet trunk line. The head-end is the convergence point for the cable lines in a neighborhood, where television signals are picked up by a ground satellite station and transmitted to homes.

The Excite@Home service essentially involved building and managing those connections. At a time when cable companies lacked the technical resources to extend their infrastructure to offer Internet service, Excite@Home provided a way for cable providers to offer Internet service, and partnered with them in the provision of the service and the signing up of customers.

Getting new customers wasn't a problem for Excite@Home and its partners. The service accounts for about 4 million of the 6.4 million cable Internet connections in the U.S. and Canada, offered jointly by Excite@Home and its partners such as AT&T and Comcast, as estimated by market researchers at Kinetic Strategies Inc. Just between July and September, Excite@Home added 486,000 subscribers.

Excite@Home was also a content provider, through the Excite.com portal Web site. The @Home ISP company acquired Excite in 1999 in a $6.7 billion merger, over the objections of AT&T Corp. -- the shareholder with the majority of voting power on the @Home board. Merging with Excite was the beginning of the end for @Home, analysts say.

"Where they really made the mistake was Excite," said David Cooperstein, research director for the telecommunication team at Forrester Research Inc. in Cambridge, Massachusetts. "If they had continued on as @Home, they would have been alright."

The deterioration of the online advertising market punished the Excite portal business. Advertising accounted for $229 million of Excite@Home's revenue in the first nine months of 2000 -- in the same period in 2001, it accounted for $88 million, according to U.S. Securities and Exchange Commission filings.

According to polling by NetRatings Inc., Excite.com ranked 12th on the November list of most popular web properties, just under the Google Inc. search engine, and just above the eUniverse Inc. network. At about 14 million users in November, Excite drew about a quarter of Yahoo's traffic, and users spent an average of half the time on Excite as they did on Yahoo, according to NetRatings.

Though comparably robust next to some struggling second-tier Web sites, these usage figures were achieved with -- or achieved despite -- the provision of high-speed cable Internet service to over four million subscribers. Analysts say Excite@Home's Internet service business could have made money, but whatever cash it was taking in from cable subscribers with its right hand was being spent on the portal business with the left.

Meanwhile, cable companies have learned to provide Internet service reliably -- and profitably -- without the technical assistance of a third party like Excite@Home. That might not have been possible in the early days of cable Internet services, but the technology -- and the depth of understanding of that technology at cable companies -- has grown over the years. As AT&T and other cable service providers are showing, they don't really need Excite@Home anymore to manage their networks.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

George A. Chidi Jr

Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?