And then there was one.
When At Home announced on yesterday that it plans to buy Excite for about US$6.7 billion in stock, almost double Excite's current market cap, it left Lycos as the last of the small, independent portals. While there have been rumors for months that both Lycos and Excite would be bought, the reports largely centered on media companies like Sony, News Corp. and Time Warner, or on technology companies like Microsoft. But in the end it was broadband networking that apparently turned rumors into fact.
"We want to create the biggest opportunity we can create," says Brett Bullington, executive VP at Excite. "We're in the early stages of the Internet and the next big opportunity is broadband, mobile devices and voice technology."
Excite isn't the only small portal to decide that faster is better. NBC's portal Snap said today that it would create a broadband site, dubbed "Cyclone," to debut in the first quarter of this year. High-speed providers - including GTE, SBC Communications, and Bell Atlantic - will carry Cyclone. And last week, America Online said it would offer high-speed connections through Bell Atlantic for just an extra $20 a month.
Snap's deal poses a threat to AOL's plans to enter the high-bandwidth market. The company has been petitioning the FCC to open At Home, TCI and other cable-provider networks for its own Internet services. If AOL wins the right to be carried on At Home's networks - a right for which the company might have to pay - it will have to find a way to compete with Excite's content on the latter company's home turf.
But is broadband the technology that companies like Snap/NBC or Excite should be focusing on? Excite's rivals are predictably unconvinced, claiming that Excite is simply acknowledging defeat in the portal wars and preparing for the next, high-speed, network conflict.
"High-speed access is very much the future, so it is important - but it's not the present," says Bob Davis, CEO of Lycos. "It's important that we aren't distracted on something that may be five years out."
Jeff Mallett, president of Yahoo, is even more blunt: "The companies missing the boat on today's services are trying to cash in on tomorrow's technology," he says.
Mallett says Yahoo had first crack at both At Home and Excite, but balked at the deals. The valuations didn't hold Yahoo up, Mallett says - it was simply that neither At Home or Excite could add significant value to Yahoo.
Sources say that At Home has been shopping for a portal for some time, and had actually talked with Lycos in the last several weeks. In the end, however, it made sense for At Home to pick up Excite. Both companies are part of the Kleiner Perkins family. Kleiner's Vinod Khosla sits on Excite's board, while both John Doerr and Will Hearst sit on At Home's board. The two companies are Silicon Valley neighbors.
The deal provides a new marketing opportunity for At Home, which will use Excite's registered users to launch a marketing campaign to boost its customer base from the 300,000 subscribers it has currently. The campaign will begin with a targeted e-mail campaign to sign up new customers. At Home needs to be creative in building up its subscriber base; cable companies offering Internet services face an uphill battle signing up new subscribers.
"It's a lot easier to sign somebody up over a telephone line than to have a cable truck roll out to the house," says Kirsten Kappos, VP at EarthLink, which has partnerships to provide Internet access over both cable and DSL lines. "When we go into a town with a cable company, we only convert about 1 percent of people to cable who never had it before."