Excite in big trouble

August 22 2001, updated August 23 2001

The American portal Excite is in big trouble. Excite@Home, which owns Excite, has nearly USD 1 billion in debt and is constantly loosing money.

In an amendment to its annual report, the company's auditors, Ernst & Young, have now expressed "substantial doubt" about the ability of Excite@Home to survive as an ongoing concern. Excite@Home did not find this comment amusing, and has now replaced Ernst & Young with rival firm PricewaterhouseCoopers

The company was formed in 1999 as a merger of broadband provider At Home and the Excite.com portal and search engine.

Although the company's broadband revenue has not been as high as expected, it is its portal business that has brought most sleepless nights.

Last year the online advertising market crashed, and the lack of income has reduced portals like Go and NBCi to shadows of their former incarnations.

Excite@Home has tried to handle the crisis by closing the German, Spanish and French versions of the site, as well as the ancient Magellan search site. (Yes, you may still access excite.fr and excite.de, but these sites are just shells without a local editorial staff).

The Danish, Dutch, Swedish, Austrian and Swiss sites will follow suit on August 31.

Excite U.K. will continue operating for now. It is a joint venture between Excite@Home and British Telecommunications, legally independent from the U.S. company.

Rebecca Miskin, managing director of Excite UK, says to Reuters that "there aren't any scenarios where we're going to run out of cash or have to make any drastic changes".

The Italian Excite.it will also survive the August shut downs.

One likely scenario is that Excite@Home gives up its portal business, trying to save the broadband activities. Our guess is that Excite.com will survive as a "shell" only, i.e. as a home page providing links to various other sites, and a search form powered by a pay-per-click search engine, getting the most out of the current visitors.

It could be argued that Excite@Home, unlike Disney and NBC, does not own any other sites and that a solution a la Go or NBCi won't make sense. We are quite confident, however, that there are other companies out there that will see the value of the excite.com address.

On the other hand, the Excite search engine is not likely to survive this year, unless the British Excite takes over the responsibility. However, it would probably make more financial sense for Excite.co.uk to buy search results from Fast or Inktomi.

This means, of course, that 2001 might be known as the year that we lost no less than three major Internet search tools: The Go/Infoseek search engine, the NBCi/Snap directory and the Excite search engine. Will Inktomi be next?

Excite UK says it has cash to continue operating (Yahoo!)
Lights Out For Excite@Home?
Excite@Home survival chances dim (CNet)
The final end for the NBCi/Snap directory (Pandia)
Excite@Home Fires Auditor After Adverse Report

More search engine news...