Excite, @Home Could Dissolve Union11/18/2001 7:00 PM Eastern
After a turbulent two-year union, Excite and @Home have essentially filed their divorce papers.
Bankrupt Excite@Home Corp. filed a motion Nov. 10 in U.S. Bankruptcy Court in Northern California to sell off its narrowband Excite portal (www.excite.com) for a bargain $10 million. If approved by the bankruptcy court, the sale would end the rocky $7.8 billion merger forged by Excite Inc., a narrowband content company, and broadband provider At Home Corp. in 1999.
InfoSpace, in turn, has entered an agreement with Internet portal iWon Inc. (www.iwon.com). If the bid goes through, iWon will operate much of the Excite portal, while InfoSpace will manage its search engine and phone directories.
While InfoSpace would acquire much of the brand name in the proposed deal, it is not clear whether the Excite name would disappear from Excite@Home. When asked about that issue, an Excite@Home spokeswoman declined to comment.
As with all other asset sales under Chapter 11 bankruptcy, the deal requires the court's approval, and there is the potential for other bidders to submit higher offers. The court will delay a decision on the motion for two or three weeks to allow other bidders to come forward.
In anticipation of that, Houlihan Lokey Howard & Zukin Capital has been hired to manage the bidding process.
The narrowband Excite business had proven to be a money drain, and in the past year Excite@Home has been trying to stop the flow. Early this year, the company shelved its Enliven media-and-advertising arm and the equally foundering iMall electronic-commerce hosting service. It shuttered its European media units in June, sold off its Blue Mountain Arts electronic greeting-card property (www.bluemountain.com) to American Greetings Corp. in September and shut its MatchLogic online-advertising management unit in October.
How much has Excite's value been degraded? It bought Blue Mountain for $780 million in December 1999, then sold to American Greetings for $35 million.
"It is interesting to look at some of the assets that they have been shedding and see that all of Excite.com brought in less than a third of Blue Mountain Arts, which was supposed to be a little complement to Excite," noted Jupiter Research analyst Dylan Brooks. "You only lost 96 percent of your investment on Blue Mountain Arts, whereas you lost 99.85 percent of your investment on Excite."
Given its moves to jettison assets in 2001, the Excite sale is the final step in severing the Excite@Home relationship, according to Brooks.