| HBS Case Collection
(Revised September 2000)
Excite@Home: Betting on a Broadband Revolution
In January 1999, @Home, a high-speed Internet access provider, announced the $6.7 billion purchase of Excite, the second largest of the major Internet "portals." This purchase marked a continuing consolidation of companies in the Internet "content" and "access" businesses and raised new issues about the form of future competitive success in the online arena. With the merger, @Home's largest minority shareholder, AT&T, inherited a contract with Excite that guaranteed the content provider exclusive access to its cable pipelines until 2002. In the months that followed, many analysts asked whether this contract would hurt AT&T in the long run, and rumors of an Excite@Home breakup pounded the stock. Excite@Home denied these reports, but many analysts suggested such a deal would be a positive move for both @Home and AT&T, which would no longer be bound to offer the content of single provider over their high-speed connections.
Keywords: Mergers and Acquisitions;
Growth and Development Strategy;
Information Technology Industry;
Web Services Industry;