Where are they now: Excite@Home

Mark Henricks — Thu, 29 May 2008 15:26:07 -0700

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?

« Entertaindom READ MORE Kozmo »