In many ways, Excite@Home doesn't even resemble the firm that fell from grace during the latter half of 1999. The leading high-speed Internet service provider (ISP) has drastically remade itself with a series of management changes and strategic shifts since the beginning of the year.
Several recent executive departures have cleared the way for new leadership. Company insiders said chief financial officer Ken Goldman plans to leave the company, but will first find a solid replacement. Goldman declined to comment.
Fred Siegel, senior vice president of marketing, has resigned, and Excite
Several other top executives have recently departed or plan to soon leave the company. Since January, Tom Jermoluk has pared his role from that of chief executive to chairman, and now simply serves as a member of the company's board of directors.
Adam Grosser, formerly president of subscriber networks, stepped down this month, and general counsel David Pine will soon leave.
Under former Excite chief executive George Bell, the company has cleared out some veteran Net executives and added new faces. Former AT&T executives Byron Smith and Mark O'Leary have been installed, running the consumer and commercial aspects of the business respectively, feeding the notion that Ma Bell--which now owns a majority stake in the firm--will thrust its will on the company.
"It really couldn't get much worse," said Mike Paxton, a cable industry analyst at Cahners In-Stat Group. "There was a lot of upside to doing something new with some new faces. All of that sends a better message than what we were getting over the past six to 12 months."
In addition to the new faces, the company has been realigned around three business units: the residential consumer Internet service, business connectivity and international expansion. The changes are part of a broader plan to invest heavily in broadband services over the narrowband properties in the short term, forsaking once-expected profits for losses in order to continue leading the high-speed race in the future.
"You can assume that not everyone who left did so on their own and that not everyone was forced out. There was some of each," said Smith, executive vice president of consumer broadband services at Excite@Home. "George Bell and the board (of directors) have a very clear vision of the organization and strategy we need, and it's really focused. We think we've got the right people to do it."
Excite@Home leads the high-speed Net access market with more than 1.5 million customers.
Few industry observers dispute that Excite@Home has a wealth of potential. As the nation's largest high-speed, or "broadband," Net service provider, the company is atop a cresting wave of demand for faster online connections. Broadband connections offer attractive profit margins and draw users with desirable demographics.
But confusion over ownership of Excite@Home--which now is controlled primarily by AT&T--concerns about new federal regulations, and a simple lack of direction for the company led to a perpetually sagging stock.
The company floundered during the past year as its cable operator partners squabbled over the best course of direction for the company. The merger combination of @Home Network, a Net access company, with Excite, a Web content company, drew mixed reactions from the controlling parties, which included AT&T, Cox Communications, Comcast and more than a dozen other cable operators. But with AT&T's newfound control over the board of directors, analysts expect to see a clear strategy emerge from Excite@Home for the first time in months.
"I think what they're doing is conforming more with the vision that AT&T wants them to have," Paxton said.
Excite@Home executives say the company has gone to great lengths to simplify its ownership, clarify its strategy and bring in the right people to lead the firm. The company will sell wholesale network access when its exclusive arrangements with cable partners expire in 2002, and it has branched out beyond cable modems to embrace digital subscriber line (DSL) technology.
But Excite@Home executives dispute the notion that the company's focus is clear now because Ma Bell is calling all the shots.
"AT&T obviously has a significant role in our board structure, but they don't have a hand in the day-to-day operations," Smith said. "They're a big ally; they're a supporter. But if you walk around the Excite@Home campus, you don't feel the AT&T influence."
Although the Internet industry increasingly appears ready for companies to show profits, Excite@Home believes now is the time to build its lead in the broadband race by postponing profitability until next year. Some analysts, though they may express skepticism about the strategy, believe it is a sound move.
"They're increasing their marketing now before the competition opens up," Chase H&Q senior analyst David Levy said. "I think it's wise of them to grow now."
Company executives said that although the management and plans may have changed recently, the company's ultimate goals remain largely the same: to dominate the broadband market.
"We think we are heading into a new period," Smith said. "Our vision is the same. We want to be, and are, one of the biggest high-speed access and content companies. We're focused on meeting our targets. We're focused on building the best service we can."