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Wednesday, 6 June, 2001, 12:47 GMT 13:47 UK
Excite@Home retreats in Europe
Excite logo
The new chief at loss-making internet firm Excite@Home has ordered the closure of divisions in France, Germany and Spain.

Patti Hart, who took over as chairman and chief executive in April, has blamed weak internet advertising revenues for a decision by US-based firm to withdraw its European operations into strongholds in the UK and Italy.

Subject to local regulations, French, German and Spanish operations will be closed in July, the portal and broadband company said on Wednesday.

Excite@Home, which lost $833m in the first three months of the year, will also close some European-facing sites run from London.

But the company said the shake-up would not affect its portal joint ventures in Japan and Australia, nor the @Home broadband internet operation run with Essent Kabelcom, in the Benelux countries.

The Excite UK portal, run jointly with British Telecom, and the Excite Italia business, operated with Tiscali, will also remain open.

"The company believes that Excite UK and Excite Italia continue to have positive growth prospects," Wednesday's statement said.

Excite UK reported a "small net profit" for the first three months of the year.

Ms Hart said: "While it is disappointing that market conditions make it necessary to discontinue certain European businesses, it its important for us to continue to focus more closely on our strengths."

Critical challenges

The closures follow a review undertaken by Ms Hart to ensure that Excite@Home was "charting the optimum strategies for increasing shareholder value".

While remaining optimistic about the firm's strategy for exploiting the broadband market, Ms Hart warned a month ago that Excite@Home faced "critical near-term challenges".

"We must ensure that we have adequate cash to fund our growth, and that we focus only on businesses that will contribute strategically as well as financially," she said.

Excite@Home was reported two weeks ago to have had approaches from firms including T-Online, the internet division of German telecoms giant Deutsche Telekom, over the purchase of European operations.

Analysts then estimated that ExciteAtHome's European operations could be worth $50-100m.

On Wall Street, Excite shares closed at $4.12 on Tuesday, up from a year low of $3.25, but 82% below a 52-week high of $23.

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23 May 01 | Business
T-Online eyes ExciteAtHome
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