Founding: Excite was founded in 1994 by a group of six Stanford University students led by Joe Kraus and Graham Spencer. It received $3 million from Kleiner Perkins Caufield & Byers and Institutional Venture Partners.
History: Excite.com's history is fascinating – not only did its 1996 IPO help kickstart .com stock mania, but also it managed to reinvent itself several times in the course of a few years. Its original focus was search software, but by the late 1990s, it had moved beyond search and was one of several Silicon Valley Web firms to follow the portal strategy which was then in vogue. At one point it even discussed a merger with Yahoo, but instead was acquired by Internet access provider @Home Network for $6 billion.
Excite@Home became one of the nation's largest broadband service providers. Powered by exclusive distribution contracts, the new Excite@Home moved aggressively with international expansion and forays into online ticketing. A year later, the company announced its first profits. A few months after that, in reaction to the AOL-Time Warner deal, longtime shareholder AT&T bought out other big shareholders to get majority control of Excite@Home.
What Happened: Excite@Home was eventually sunk by several factors. It took on massive amounts of debt for gambits such as the $780-million purchase of BlueMountain.com, an online greeting card site, in 1999. It sold BlueMountain.com two years later for just $35 million.
By the time that sale took place, many of Excite@Home’s advertising clients had either folded or slashed their budgets. Co-founder Ryan McIntyre says Excite@Home got too big too early to exploit the pay-per-click advertising model that made Google great. “When the downturn started in 2000, we were overstaffed and not in a position to capitalize on the transition from first-generation display-based advertising to highly targeted keyword advertising,” he tells The Industry Standard.
The debt-crippled company needed to raise more money to keep going, but the tap had already turned off. In the AT&T breakup announced in 2000, Excite@Home became part of the separate cable TV business. Big cable companies worried about the company’s viability began bailing out of agreements to distribute the still relatively healthy broadband business. AT&T gave another $85 million to the struggling unit, but Excite@Home’s $1.3 billion debt load pushed it under in September 2001. It sold its broadband business to AT&T for $307 million and filed for Chapter 11 bankruptcy.
In late 2001, auctioneers gaveled off the portal’s assets, including the Excite.com URL, for less than $10 million to iWon. Today, heavyweight online brand house IAC Search & Media, parent of the likes of Match.com and Ticketmaster, owns and operates Excite.com as a portal using the same exuberant logo, ca. 1996.
Where Are They Now? Joe Kraus and Graham Spencer co-founded JotSpot in 2004. Google acquired JotSpot in 2006, and today both work for Google, where Kraus leads the OpenSocial social application API initiative. Ryan is managing director of Foundry Group, a Denver venture capital firm specializing in early-stage software and information technology.
Were you an employee, customer, or client of this service? Then share your memories below. What did you like about the company? What didn't work? What other factors contributed to its success or failure?
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Comments
I lost a ton of money w/ excite@home, that's my memory.
Another side story to Excite@Home, they bought Webshots.com for $70M in 1999, then sold it back to the previous owners for $3M 2 years later. They sold it again to cnet for another $70M in 2004. Talk about a good flip.
I'd always heard that Excite's Japanese portal was a seperate entity before the Iwon buyout, and that they represent the only real legacy of the company..
I'd always heard that Excite's Japanese portal was a seperate entity before the Iwon buyout, and that they represent the only real legacy of the company..
I also heard that Excite.co.jp is still the only original version of excite.
Don't know if it is true though.
the amazing thing is that Excite and @Home both had seasoned management, lots of capital, stock and blue chip venture capital firm Kleiner Perkins behind them and THEY BOTH TANKED. Talk about screwup! Shows you how *valuable* being backed by Kleiner Perkins really is.
Mark: Kleiner Perkins also backed Google, EA, Sun, and Amazon.
Nabeel, Kilen: I don't know the particulars of the Japanese Excite, but international operations sometimes are split off or license the name, and can operate independently even if the U.S. organization goes bankrupt. I was reminded of this when The Industry Standard was relaunched early this year, and we discovered that a Polish version ("The Internet Standard") had still been operating with the original '90s-era artwork the entire time!
Ian Lamont
Managing Editor
The Industry Standard
I sold my company, Go Media, to Excite in August of 1996. We were the Austin outpost, in charge of communities - chat, boards, clubs, instant messaging. We were always running trying to catch up to Yahoo in traffic or to get to market first with one product or another. We had a great team in Austin - it was one hell of a great ride.
Excite Japan was indeed a separate entity. It was a joint venture - with whom, I've forgotten.
When the lights went out in 2001 Tom Lang and I licensed the popular Virtual Places software and relaunched it as a subscription service. Believe it or not, vpchat.com is still running today, with a small but loyal audience.
Tom Lang now works for Gaia Online. I'm in the process of starting LaunchPad Coworking + Cafe here in Austin.
FYI, Exicte they bought Go Media, they had 35 employees - we made it 50. When I left 3 years later, there were 3500 employees. Yeah, we grew just a little too fast. And the merger with @Home was the beginning of the end. Management clashed, and the companies really never did any integration.
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