Excerpt from TSCM: Why'd They Bother?
So now McAfee.com (MCAF:Nasdaq) is public and Excite@Home (ATHM:Nasdaq) is planning to offer a tracking stock to match the performance of the company's media properties, otherwise known as what was the Excite portal and directory. Of course, that begs a question: If there's such a need for these companies either to be independent or to be valued separately, what was the point of their having merged in the first place?
McAfee, of course, was the consumer-focused antivirus software company that went on a buying spree and became Network Associates (NETA:Nasdaq) exactly two years ago. Network Associates CEO Bill Larson says McAfee antivirus packaged software now accounts for just 10% of overall revenue.
In the case of Excite@Home, the two companies merged as a high-profile combination of Internet content and high-speed delivery technology. But the combination quickly ran into the buzz saw of major shareholder AT&T's (T:NYSE) agnosticism toward content. AT&T, now a cable and phone company, wants to carry everyone's programming, not just one portal's. Selling the media businesses for less than @Home paid might provoke shareholder suits, so instead the tracking stock is scheduled for the third quarter of next year.
Now investors can own McAfee.com, a consumer-focused company and sexy application service provider, and soon can buy into Excite, the media operation of Excite@Home.
Of course, investors could have owned those companies before their respective mergers, too. The more things change, the more they stay the same.
Some More Exciting News
Excite@Home's @Home subscription service has hit a million subscribers. CEO Tom Jermoluk disclosed the achievement Wednesday at the First Boston conference. He also noted that although a formal announcement was still forthcoming, the gang "back home" in Redwood City, Calif., already had begun partying.
The 1 million mark is an artificial milestone of little real relevance, of course. But it is important in that @Home promised when it went public three years ago that it would hit a million by the end of 1999. It is an accomplishment for any company -- but especially an Internet company -- to fulfill a promise. @Home also pledged to be profitable in the fourth quarter of this year, and Jermoluk assured investors the combined company will hit this target as well. Wall Street expects Excite@Home to earn 1 cent per share this quarter. Article by Adam Lashinsky
Profitibilty, always a winner in my book.
Jack |
