The good old days? Or a lesson to be learnt?
By silicon.com
Published: 20 January 2004 15:05 GMT
20.01.99 High-speed internet access provider @Home has bought search-engine and internet-portal company Excite for $6.7bn.
The price dwarfs the £4.2bn that internet service provider AOL paid for Netscape late last year.
The figures are continuing to shock industry observers and reflect the frenzy that has developed around internet firms in the US.
Robin Bloor, CEO of Bloor Research, was dumb-founded when he discovered the value of the contract. He told silicon.com: "I think it's grossly over-priced but entirely within the current evaluations being seen in the US Internet industry.
"Excite was always an acquisition target and @Home clearly sees the potential - it has a powerful portal brand."
In the joint announcement, the companies claimed that merger will help them create a "new media network for the 21st century".
20.01.99 Where do we even begin with this one? To say that the valuation shocked some observers or, as Robin Bloor remarks, that it was "grossly over-priced" was true, yet that was still what the market demanded.
Indeed, from the synergies (remember how often you used to hear that word?) that a high-speed network and content giant should have had, to the famous story of both CEOs shaking on the deal in a Silicon Valley car park, this merger seemed to have it all.
However, it has left no lasting legacy. By the end of 2001, the company was being wound up, despite having signed up over 3 million broadband cable users.
As content and infrastructure companies now exit the downturn that the dot-com and telecoms bubble played a large part in creating and once again look at acquisitions, there's a lesson to be learnt here, on both sides of the Atlantic.
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