Excite@Home Merger Talks with Yahoo Reach Critical Junction

Talks between Excite@Home and Yahoo! Inc. have reached a critical point, with sources suggesting that Yahoo may acquire Excite@Home for more than its current market value of $17 billion. This potential deal comes just two months after the completion of the $6.7 billion Excite@Home merger. Yahoo's acquisition of Excite@Home would not only gain it a large number of devotees to its portal but also provide a much-needed broadband play.

Key Takeaways:

• Excite@Home and Yahoo have held talks over the last six weeks about a possible deal in which Yahoo would buy Excite@Home for an amount greater than its current market value of $17 billion.
• Yahoo would gain control of Excite@Home's devotees and a much-needed broadband play through the acquisition.
• AT&T Corp., the controlling shareholder in Excite@Home, wants to retain influence over the @Home business.
• One possible scenario is for Yahoo to absorb Excite and spin out @Home into an independent company in which Yahoo and AT&T would have sizable stakes.
• Another scenario could see AT&T take the @Home business and combine it with its WorldNet Internet access business.
• The recent talks between the companies are described as preliminary, with much work still to be done before a deal could come together.

Statistics:

• The $6.7 billion Excite@Home merger was completed in an unspecified time period.
• Excite@Home's current market value is $17 billion.
• The talks between Excite@Home and Yahoo have been ongoing for six weeks.
• The possible acquisition would provide Yahoo with a much-needed broadband play.

Sources:

• Business Week Online (www.businessweek.com/today.htm)
• America Online (Keyword: BW)
• Business Week Online - available on AOL (Keyword: BW for America Online subscribers)