Excite@Home Advances as Chello Venture Scrapped

Excite@Home (Nasdaq: ATHM) was up 1/4 at 6 1/8 early Tuesday after the provider of high-speed Internet access called off plans for a joint venture with the Chello Broadband unit of Dutch broadband provider United Group.

The deal would have formed a new broadband subscriber company, Excite Chello, to operate in international markets.

Excite@Home said United Group wanted to change terms of the venture because of market conditions, but the companies could not come to an alternative agreement.

Excite@Home also said that the complexity of the proposed deal, which involved "multiple shareholders with differing opinions and interests," would have posed a risk to its international expansion plans. The company said it has no obligation to United Group as a result of its decision to walk away from the talks, and is free to pursue other partnerships.

"We continue to regard international as a key element of Excite@Home's business," said George Bell, chairman of the Redwood City, California-based company. "We remain confident in the overseas opportunity and will continue to grow our position."

Bell also said that Excite@Home has seen faster growth in traffic and in overseas broadband subscribers during the last few months than in the first half of the year. Revenue from international operations rose more than 300 percent in the third quarter from a year earlier, and daily page views in September were 200 percent above year-earlier levels, the company said.

Overall, Excite@Home saw third-quarter pro forma revenue rise 51 percent from a year earlier to US$169.9 million. The company posted a loss before extraordinary charges of $41.6 million, or 10 cents per share, compared with a loss of $4.2 million, or one cent, in the same period last year.

When Excite@Home reported the results last month, the company said it expected fourth-quarter revenue to grow at a "low double-digit rate," with a loss before charges of 8 to 10 cents per share.