Excite@Home May Have To Call It Quits 329
Plazm writes: "C|net has a story (printer friendly version, of course) that just cropped up this morning about Excite@Home being in financial trouble. Will they befall the same fate as Covad and Loki? Good thing I just purchased my cable modem and broadband service through @Home last week so they could go out of business the next."
Layoffs (Score:1, Informative)
Re:so much for competition in Canada (Score:3, Informative)
Re:They suck anyway... (Score:2, Informative)
Loki isn't gone yet! (Score:3, Informative)
Loki has just filed chapter 11 (protection from creditors) not chapter 7 (liquidation). Please don't call Loki gone until they do. They still have a very good chance to pull through.
Other major organizations have filed chapter 11, and still are major companies to this day. Sorry this is a touch off topic, but Loki ain't dead yet.
"Merging" with Excite was pure folly (Score:2, Informative)
@Home killed themselves when they merged with Excite: @Home, which had a solid prospect of a large scale profitable business, decided that they just HAD to dilute their value by merging with a absurdly overvalued search engine that was headed into the great abyss (Excite has been on a major decline while engines like Google conquer the market). While they've tried to make some value out of the Excite merger, as an @Home customer I have never used the Excite pages except to transition to the member services pages. Even the so called "Broadband" version is simplistic and borish.
As another poster mentioned though, @Home really is marketing and some peering agreements: I'm on Cogeco and they will continue if @Home fails, and likewise Rogers and Shaw will be just as strong.
It's ironic that this is occuring right now as I just finished reading the National Post over lunch, and one of the stories detailed the fact that cable modems are being installed twice as fast as DSL. You would think that these would be the good times for @Home.
Possible reason (Score:5, Informative)
So what is the solution? Simple. You have a customer base, you have people pratically breaking your doors down to get your service, but you can't stand the ISP you're going through. Let's see...cable company with lots of money...needs high speed internet backbones...money...backbones...hey, doesn't MCI, the Bells, Sprint, Qwest, and about 100 other telco/data service companies sell internet connections??? Hey, lets get our own OC-192!
And thus, @Home doesn't get the contract renewal when the current one runs out. Not only that, but these contracts are specified in terms of geographical area, not just in terms of the companies that signed it. So, if the cable company expands (which they always are), nothing says that the new customers have to be @Home customers. The cable company can use their revunues from existing @home customers to build an independant infrastructure, and use that to independantly serve all new customers outside of the original area.
Result? @Home doesn't make enough money to cover their startup costs. And they file chapter 7 within years of initial creation.
Jeez Timothy! (Score:2, Informative)
Re:Who will be left in Broadband? (Score:3, Informative)
Re:Probably won't get killed. (Score:3, Informative)
The problem with broadband in the US (Score:3, Informative)
Re:Possible reason (Score:3, Informative)
I looked long and hard at investing in @Home since they had a dominant position and just kept getting cheaper. The biggest problem is that all their contracts are up in the next year or two. So even if they were making money hand over fist now, there's no long term business. They won't get such a good deal as before when there was no market and they were giving away huge blocks of stock (@home was largely given to the major cable providers to get them to use it initially). Comcast and Cox (two very large providers) have already cancelled their contracts effective December 7. (Funny those press releases from a year ago extolling their relationship to 2006).
Plus looking at their financial announcement, they're only getting about $15/month/subscriber for mail/news/DNS/long-haul links. The rest goes to the cable company which provides marketing/installation/technical support/local loop (for the gripers -- most of their lame tech support is at the local cable company -- mine is incompetent but friendly and quick to answer the phone). Now that long-haul links are cheap and they're on the ropes with close sibling AT&T Broadband you can imagine what the renewal rates will be.
Bangback
Nope (Score:3, Informative)
Hell, they just bought the Toronto Blue Jays for $millions.
Everytime they sense an opportunity to get into another market, they buy in without care as to how to make the bottom line increase. They bought out Maclean-Hunter to get their cable business, and I hear they're doing the same thing to Shaw.
Re:Blame it on Pets.com and their shareholders (Score:3, Informative)
Welcome to the real world.
May I repeat what you said? Thanks...
unable to find a decent job
See that? I'm crying. Oh, woe is you. That's called capitalism. That's the "old economy" for you.
<tangent>
Who the hell came up with this "new economy" slogan anyways? Exactly what is so "new" about it? Nothing, other than the fact that a bunch of young, naive idiots managed to convince some old money that their ideas were "foolproof" as in "you fools can't tell we've got no idea what the hell we're doing."
</tangent>
Are you a "new economy entrepreneur"? I don't think so. You're posting on Slashdot so I assume you have some common sense. But here you are whining about your misfortune. Are you mad you were suckered in too? Are you bitter because you feel it was "owed" to you? Do you think you have it hard? You're probably an intelligent person and you can probably actually perform your job duties. That alone puts you ahead of most of the other lobos (think lobotomy) "looking" for a job (more accurately, looking for a new job that's exactly like their old job).
Those of you who find yourself unemployed had better start flipping burgers and stop wallowing in your own misery. Maybe try and industry that isn't part of the "new economy."
Find yourself a "decent" job (you know, those kind that pay real money, not future riches). Try civil service. Perhaps the police, fire department, military, IRS, FBI, etc. They're not going away any time soon.
If you can't find a job locally, it's time to move. "Oh, I can't move, I love it here." You'll love it too, when you can't pay your rent and you're out on the street.
Take charge of your life.
You took a chance at (fame and) fortune and you lost. If you don't want to lose, don't play the game.
You'll never get rich when you're unemployed.
people are always more eager to share bad news (Score:2, Informative)
I'm running a linux firewall on a static IP in front of my home network. Life without @Home would totally suck.
Re:Does excite@Home == AT&T, COX, whoever @Hom (Score:2, Informative)
buildmeasite.com!
F*cking idiots at @Home (Score:4, Informative)
As an @Home customer, it pisses me off that they took a solid infrastructure business and wrecked it because they wanted to be Yahoo. Broadband over cable TV lines -- simple, powerful, doable. By now they should be rich enough to found a quasi-nation and buy an aircraft carrier [google.com]. Or whatever they would want to do with $10^10.
But no, instead they got feverish with dotcom mania. They really thought that megabit internet access was just a stepping stone to the real money -- banner ad revenue on their web portal. I'm not making this up, honest! That's why they spent $780 million on BlueMountain [cnet.com], a loss-leader greeting card site, among other dot-bombs.
So now they're low on cash and their backbone needs maintenance (duh). If they shut off cable modem service I'll have to smack someone. I'd rather commute to my office than use phone modem again.
Re:Giant Honking Market Opportunity (Score:3, Informative)
I shouldn't blast you for being entrepreneurial, but knowing the financials behind an ISP, i can tell you why it's not a good idea.
1) Just because there's a lot of unlit fiber, it doesn't necessarily mean it's entirely dirt cheap. The cost for longhaul lines can easily run into the thousands of dollars. And you can't get fiber to your POP in most places, so you either have to a) plant the fiber yourself, or b) pay your telco a loop fee to get it from your longhauls POP to yours. The latter will also run into the thousands of dollars, the former is obviously a lot larger, but only onetime.
2) While the power company idea is innovative, I personally don't see how/why it would be any cheaper/better than registering as a CLEC, colocating a few DSLAMs in your local CO, and become a DSL provider, ala Covad. And we all know how Covad fared.
3) Supply and demand is a well and cool thing to think about, but it's a bit more complex than that. The first problem is that it's engrained in people's mind that the cost is around $40. Problem there, your average total cost is already over $40/person, you can't make any money.
4) Bandwidth is expensive. Ok not that expensive, but it's a hell of a lot more expensive than $40 for a typical moderate user's use of a cable modem. Owning your own fiber and immediately getting bigenough to be able to peer to the Tier1's is a good way to save money long run, but you'll have to be cash positive in the meantime so you can paydown your debt until you own it yourself. @Home tried this, but didn't do very well as they've had to get bonds from Promethian, whom from what i understand, isn't much more than a legal loan shark.
5) You can get around #3 by having a higher price. Ok say you charge $60/mo. Who is going to pay $60/mo? only the people who understand Quality of Service, and are going to use it the most. You lose the ability to share the costs with the "light users" whom you make a profit in, thus your costs will go up even higher, as a ramification of your prices going up. neat huh?
There is not a lot of money in residential broadband, if there is any money at all. The money is in businesses, who gladly will be much higher prices for speeds that may only be semi-decent to a homeuser. Normal businesses typically do not use a lot of bandwidth, which allows the ISP to oversell, and combined with the higher prices, allows the ISP to make money. We sell our residential DSL for $50-60/mo, and i can say for a fact that we don't make a dime on them, thankfully our residential advertising has been belowpar, and thus we haven't lost our shirts over it.
As an ISP, your best customer is grandma who uses AOL to send email to their grandkids once every other week. Low costs, almost-decent revenue. You don't get those customers with broadband.
Re:@Home in other countries (Score:2, Informative)