AT&T-controlled broadband internet company Excite@Home yesterday announced the writing off of $5.4 billion of non-cash assets as it sought to redirect the focus of its operations.
Much of the loss ($4.6bn) comes from the plummeting value of its online media businesses, while $200 million arises from Excite’s stakes in other internet-oriented companies. As a result, the company announced it is to shut down or sell off several of its media operations and refocus on providing high-speed web access.
Two of the units affected are the excite.com portal and card site bluemountain.com, both of which will see their intangible assets written off. Meanwhile, e-commerce site imall.com and online ad company enliven.com will be among the victims of Excite’s decision to sell or pull out of any business which does not aid profitability or link with broadband access.
“This company has always striven to do more,” chief executive George Bell tersely summarised. "Now, we're going to strive to do less.”
Excite delivered a further blow to the dotcom world by cutting its revenue predictions for the coming year, blaming the falling value of technology stocks and a slump in online advertising. It expects Q1 revenues to fall 12%–15% compared with the preceding quarter.
“There's a very clear message here that the party's over,” said Bell, adding that he did not expect the online media market ever to climb back to the values it has seen in the last couple of years.
However, Excite did have some good news. Its Q4 operating loss of $36m (9 cents per share) was 1 cent less than expected. Meanwhile, revenues rose over the year from $128.8m to $169.1m and the number of broadband subscribers leapt by 150% to 2.96m.
News source: Financial Times