Excite@Home is scrambling to stay afloat, looking to sell a key piece of its Internet operation to offset the burn from the portal side of its business.
The high-speed Internet company spent 48% in the first quarter, leaving just $105 million. The company has a cost-cutting plan to slow its burn rate, but needs to raise $75 million by June to avoid "a material adverse impact on the company's operations and liquidity."
CEO George Bell said ad revenues from the Excite side of the business will drop from last year and be far worse than previously expected. AT&T has tentatively agreed to repurchase Excite@Home's national fiber backbone - its chief advantage in the Internet business. Excite@Home will then lease it back.
Also, Excite@Home will cease what little business it does with "partner" Cablevision Systems. The companies have been bickering over the quality of Excite @ Home's service for two years. - John Higgins