Will AT&T buy a portal?
The telco makes a tremendous move in the Net space with the proposed TCI merger, and observers wonder whether buying a portal firm is next.
Although it is understood that the Internet continues to play an important role in the telco giant's strategy, the strategy itself--especially in light of the news of today's proposed acquisition of Tele-Communications Incorporated--is not entirely clear.
A case in point: its Internet access service WorldNet has not taken off to the degree executives have wanted.
So in the last few months, AT&T has been busy trying to make inroads on the Net in other ways. It formed partnerships with three leading portal sites, Excite, Lycos, and Infoseek, in which users will be given access via AT&T WorldNet with a home page branded by one of the search engines.
Earlier this month, the company announced that it will be setting up a system that lets customers pay their bills over the Net.
And just last week, AT&T reportedly offered to buy America Online, the world's largest online service.
Now, with the AT&T-TCI merger, AT&T potentially could offer customers a full complement of communications services, including telephone, high-speed cable access (TCI has a controlling stake in cable access firm @Home), and Internet service.
"It seems like the whole point here is to provide a package of integrated services to the consumer that could include, but is not limited to, local long distance, broadband access, cable, and satellite service," said Mark Mooradian, an analyst with Jupiter Communications.
But is AT&T looking to purchase a portal?
On the other hand, a company such as AT&T may not really see the value in the flip side of the business that portals are promising: e-commerce, said Kate Delhagen, an analyst with Forrester Research. "Their goal is to provide services that they can bill customers for on a monthly basis," she said. "We don't think they're interested in [an e-commerce and advertising] revenue model at all."
However, AT&T won't balk at the revenues it stands to gain from properties it will acquire with TCI, such as SonicNet, a popular online music news and information site.