Excite UK to Close; Excite@Home Cuts 400

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European Web portal Excite UK is shutting down this week and firing its remaining 48 employees after a bid to get more funding failed, the company said yesterday.

The news follows last week's announcement by bankrupt broadband provider Excite@Home Corp. that it is slashing its work force by 400 employees as it winds down operations. About 900 employees remain at Excite@Home, Redwood City, CA.

Excite UK is a joint venture between Excite@Home and British Telecommunications, and any money left over after the shutdown will be split between the two, according to Excite UK.

"The decision to cease trading is both unavoidable and deeply regrettable," Excite UK managing director Rebecca Miskin said in a statement. "Our priority now is to our users and our employees and to ensure that the closure is managed in an orderly fashion."

Excite UK had sought a partner for the past few months, but was unsuccessful. It is another victim of the online ad slump.

Meanwhile, Excite@Home's reductions were part of an effort to "conserve cash and to work to return value to its financial stakeholders," the company said in a statement.

Excite@Home also said it expects further layoffs "as transition activities are completed" between now and Feb. 28, when it is scheduled to shut down.

A federal court ruled last month that Excite@Home could yank service Dec. 1 after failing to reach an agreement for higher subscription fees with the cable operators that distribute the service.

About 550,000 AT&T subscribers were left without service after AT&T and Excite@Home were unable to cut a deal. AT&T had 850,000 Excite@Home subscribers, but was able to transfer 300,000 of them immediately to its high-speed service. The company said it completed the transition Dec. 7, but in the same statement indicated that the transition wasn't going so smoothly for some.

"[S]ome AT&T Broadband high-speed Internet customers have been encountering difficulties in activating and connecting their computers to the new network due to several causes," the statement said.

"We're working hard to regain the confidence of our customers who have had to suffer a very challenging period without the high-speed Internet access on which they've come to depend," said Susan Marshall, senior vice president, advanced broadband services, AT&T Broadband. "We're thankful for all of those who have stuck with us during this transition, and we want to say to others, who are still trying to get up and running, that we're working around the clock to make sure service is adequately restored."

In an attempt to smooth customer relations, the company said it would issue credit for two free days of service for every day of interruption.

AT&T had offered $307 million to buy Excite@Home, but pulled the offer after its subscribers were denied service.

Excite@Home reached continued-service agreements with Comcast Cable Communications Inc., Cox Communications Inc., Rogers Cable Inc., Insight Communications Company L.P., Insight Communications Midwest LLC and Insight Kentucky Partners II L.P., Mediacom LLC and Mediacom Broadband LLC and Mid Continent Communications.

Under the deal, the combined cable companies agreed to pay $355 million immediately to Excite@Home.

Comcast has 790,000 subscribers. Cox has 550,000. Excite@Home had 4 million subscribers.


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