Excite@Home hires COO; two execs resign
The broadband service provider says former Lipstream Networks Chief Executive Matt Jones will fill the newly created post of chief operating officer.
Excite@Home also announced the resignation of Byron Smith, executive vice president of Excite Network, and Mark O'Leary, executive vice president of Broadband Services. Both men, formerly from Excite@Home's controlling shareholder AT&T, will leave the company in July.
The news comes during a key time, as the Redwood City, Calif.-based company, which offers consumers high-speed Internet access via cable modems, negotiates a series of potential deals that will help determine its survival.
The company warned Wall Street in April that revenue for the rest of the year would be lower than expected and said it needed more money to continue operating. Excite@Home, which is negotiating with AT&T over a new network backbone agreement, is seeking additional financing and might consider selling some of its media and content properties.
Excite@Home also announced Tuesday that it is in talks with Comcast and Cox Communications over previous exclusivity deals forged between the companies.
"We feel the company is in a state of transition," said Fred Moran, an analyst at Jefferies & Co. "There are a lot of issues."
The company made deals with Comcast and Cox to provide broadband Internet service throughout the cable companies' territories. The deals can be renegotiated every June 4 and Dec. 4, and the two companies have asked Excite@Home for an extension until June 18.
Moran thinks the exclusivity deals will be gone by the end of the year, and that Excite@Home will still provide Internet service to Cox and Comcast, but under less favorable terms. Excite@Home now receives 35 percent of the revenue the cable companies generate from providing its Internet service, and Moran thinks the company will take a smaller cut in the future.
"@Home is currently the only ISP (internet service provider) offered through cable," said Moran. "I think it's already understood that exclusivity is fading and that the market will open up to competition." Moran cited America Online and Microsoft as potential competitors in the market.
The potential hit in revenue comes during a cash crunch for the company. Excite@Home said it needs between $75 million and $80 million to stay in operation; funds the company can raise through third-party financing, a sale of media assets, or possibly leasing back its network to AT&T, according to Moran.
Jones comes on board soon after the company installed a new CEO, Patti Hart, in April to replace George Bell.
Excite@Home has seen its share of management changes over the past year as many executives have left.