Excite@Home is to close its European portals due to falling revenues.
Only two months ago managing director of Excite Europe, Evan Rudowski, said to the FT that he would rather sell the business for $1 than withdraw from Europe after all the time and money we have invested. It seems he spoke too soon as poor advertising revenues have forced him to eat his words and announce a European withdrawal.
Excite@Home, controlled by AT&T, will close its French, German, Spanish and Dutch portals to concentrate its resources on joint ventures with British Telecom in the UK and Tiscali in Italy. As a result of the withdrawal, 85 jobs will be lost, 25 of which will be in the London headquarters of Excite’s European operations.
Last quarter Excite’s high-speed Internet revenues rose by 80%, compared to the same period a year ago, media sales however fell by 40%, and this has proved the root of Excite’s European downfall. As dotcoms have become increasingly cautious over advertising spending and investment Excite has found it increasingly difficult to attract sufficient revenues to maintain viability.
Perhaps predicting their troubles Excite has already considered a merger, holding talks with Chello Broadband towards the end of last year. These fell through in December. This European withdrawal has sparked off renewed speculation of a merger. It is not inconceivable that the company could be bought out of its collaborations with BT and Tiscali. Germany’s T-Online could be interested in the company’s UK operations, using it as a foot in the door of the UK portal market.
Excite claims this will not be necessary, steadfastly believing that its British and Italian operations are strong enough to survive. Perhaps though if T-Online come in with a $1 offer Rudowski will find it too tempting to refuse.
