Excite, @Home To Merge

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January 19, 1999 (7:04 AM EST)

By Mo Krochmal,

@Home Network announced Tuesday that it is purchasing Excite, one of the most heavily trafficked Internet sites, in an all-stock transaction valued at $6.7 billion.

@Home Network is a high-speed Internet-service company. Excite is a portal with nearly 20 million unique visitors each month.

Portals offer search capabilities, e-mail, and other services and serve as the place where most people navigate the Internet. They are expected to become even more important as more people use the Internet for the first time. Excite, founded in 1993 by five friends from Stanford University, has carved a niche among portals such as America Online, Yahoo, and Microsoft by concentrating on personalization.

George Bell, the CEO of Excite, will report to Tom Jermoluk, the chairman and CEO of Redwood City, Calif.-based @Home Network, and will joint the @Home board of directors.

@Home Network will issue 1.041902 shares of its stock for each share of Excite stock in a deal that is expected to take three months to close.

The deal eclipsed the $4.2 billion purchase of Netscape by AOL two months ago. Excite had previously turned down a merger proposal by Zapata, a Texas-based food-processing company. @Home Network has outstanding shares with a value of $10.4 billion, while Excite's outstanding shares are valued at about $3.5 billion.

In a news release issued Tuesday, @Home Network says it plans to "accelerate broadband addoption by exposing the millions of Excite narrowband users to that of a media experience enhanced by the broadband platform."

Broadband is the next issue the exploding Internet industry faces. Companies are jockeying into position to be able to provide broadband service to homes and businesses through the cable-TV or telephone industry infrastructure. AT&T is acquiring Tele-Communications Inc., the major shareholder in @Home Network.

With the purchase of Excite, @Home Network can leverage Excite's direct-marketing MatchLogic division and offer advertisers a unified way to target, measure, and report advertising on all devices on which the Excite and @Home Network combination is offered. This would include cable modems, the chief medium of distribution for @Home Network.

@Home Network has approximately 300,000 customers.