EarthLink this morning announced that it will acquire telecom services provider One Communications for $370 million, which includes payment of roughly $285 million of the latter’s net debt. One Comm stockholders have the right to elect to receive the net merger consideration in the form of cash or EarthLink common stock.
The merger has been approved by the Boards of Directors of both companies and the stockholders of One Communications. → Read More
Time Warner is moving forward with its plans to sell off AOL in pieces, and is finally ready to formally separate the AOL portal and advertising business from its legacy dial-up access business. But how much can it hope to get for these parts? When Google invested $1 billion in AOL a few years ago for a 5 percent stake, that valued AOL at $20 billion (which some people thought was an inflated figure even back then). Today, even after breaking it up, Time Warner will be lucky to get more than $7 billion for the whole lot. Although it wants $10 billion for just the advertising and content business, there are only two serious potential buyers: Yahoo and Microsoft. And Time Warner is not making any friends at Yahoo by interfering with the selection of one of its new board members. If Microsoft turns out to be the only bidder, it would have no reason to offer much more than the $4 billion that the market is valuing the business at today. And, of course, all bets are off if Microsoft ends up buying Yahoo instead. (The dial-up business also only has one serious buyer: Earthlink). According the WSJ (subscription required): The Yahoo discussions have valued AOL at around $10 billion, excluding the dial-up business. In contrast, Time Warner’s current stock price — around $14 — suggests a value of no more than $3 billion to $4 billion for the ad-sales and content businesses, some analysts say. Analysts value the [dial-up] business at only $2 billion to $3 billion, but Time Warner is expected to seek more than that in any sale discussion, according to people familiar with the situation. Despite having been in decline for several years, the business is still profitable and generates a predictable stream of cash. It serves 8.7 million subscribers, while EarthLink, the second-biggest dial-up service, serves 3.3 million, including broadband and Web-hosting subscribers If Time Warner can convince Yahoo it still needs AOL, it might get closer to that $10 billion valuation for the online ad and content business. (Except that transaction would likely be structured so that Time Warner gives Yahoo cash in return for a large minority stake in the new combined AOL-Yahoo). According to comScore, AOL’s Platform-A is the largest online advertising network in the U.S. in terms of its reach, with 170 million individuals seeing its ads in June. → Read More
A Wi-Fi signal broadcasts in Philadelphia. Let’s all celebrate! Right. The municipal Wi-Fi system in Philadelphia that was abandoned a few months ago is now back, thanks to a local gaggle of investors. The network, which was started by Earthlink some three years ago, is about 80 percent complete. The goal is to cover as many of the city’s 1.6 million residents in Wi-Fi. The new group behind the venture, the poorly named Network Acquisition Company LLC, will sell $200 repeaters to businesses to boost indoor signal quality. Poor signal quality is partly why Earthlink ultimately abandoned the project. Philadelphia… isn’t that the city where’s the a statue of Rocky, the movie character? → Read More
The dream of free municipal WiFi refuses to die. Meraki Networks is picking up the ball that Google and Earthlink dropped, expanding its free WiFi network to cover all of San Francisco. The service will be ad-supported (ads appear in your toolbar when you are browsing through a Meraki WiFi router), and the build-out will be paid for out of a $20 million series B round the startup just raised from Sequoia Capital, DAG Ventures, Northgate Capital and other existing investors. This round is on top of $5 million Meraki raised last February from Sequoia and (ironically) Google and former Google employees. Meanwhile, Google’s once-vaunted WiFi initiatives have dwindled down to providing free WiFi only in Mountain View, CA (where Google is headquartered). And Google’s biggest WiFi champion, Chris Sacca, is now gone. Google’s WiFi effort in San Francisco is all but dead, mostly because its partner, Earthlink, decided to get out of the municipal WiFi business. So why does Meraki (and its new investors) think it can succeed where Google failed? Well, for one thing, it is already providing free WiFi to 40,000 people across two square miles of San Francisco. (With about 500 WiFi repeaters supporting them). It is simply expanding that program (to about 10,000 or 15,000 repeaters). Second, free municipal WiFi is not Meraki’s only business model (more on that below). It is using San Francisco basically as a giant demo for other cities. But, third and most important, its mesh technology is a cheaper way to blanket a city in wireless broadband than through standalone WiFi hotspots. Meraki’s WiFi routers connect to each other through a mesh network, meaning that many can share a single broadband connection. They are cheap, can be placed outdoors on rooftops and balconies, and can even be solar-powered. The company expects that it will only cost a few million dollars to cover all of San Francisco, compared to the $14 to $17 million estimated for the Earthlink/Google plan. “There is a pretty drastic cost advantage,” says CEO Sanjit Biswas. “Our network will come in at the low, single-digit millions,” he predicts. Meraki will even offer residents free repeaters to amplify the WiFi signal inside their homes, and shoulder the entire cost itself rather than ask for public funds. All the routers will also be on private property, not public property, and thus avoid the politics of involving the city government. → Read More
EarthLink is expected to announce a beta test for Accton Technology Corp’s WiFi phone as early as tomorrow. Beta testing on the phone has been in the works on EarthLink’s municipal wireless network in Anaheim and it seems to be working very well. Like any WiFi phone, you’ll be able to make VoIP calls from your home network or on EarthLink’s Municipal WiFi network. As soon as you power on the phone you’ll be able to make quick and cheap phone calls over the internet without sacrificing voice quality. → Read More
What bullshit! Not surprising, but ridiculous nonetheless. Ars Technica just reported that the city-wide New Orleans Municipal WiFi will soon be shutdown in favor of a pay service from Earthlink. Apparently Earthlink will continue to offer 128kbps wireless for free for “as long as the city is rebuilding.” This was a great idea that was castrated early-on by laws that are overly friendly to businesses. Speeds were initially capped at 512kbps due to opposition from ISPs serving the area and were then setback to 128kbps to further appease said ISPs. So later this year, Earthlink will deploy a wireless network that spans roughly 20 square miles. It will reach the French Quarter, Garden District, Algiers (on the West Bank) and the CBD, with plans to expand as demand increases. It’s great that the city will have such prevalent wireless access, but I hate the fact that the free service is being ditched in favor of a pay one. Grumble. New Orleans to take city-wide WiFi network offline [Ars Technica] → Read More
Last week Earthlink released a free online RSS reader, and a social bookmarking site. Recently, word has leaked (Earthlink actually quietly announced this on their blog in June) that a much more ambitious project, called WebLife, is now live as well. WebLife is a combination of two services: photo management and sharing, and online storage/backup. The basic service allows 1 GB of storge and is free to Earthlink ISP customers. Others can access it for $3/month. Additional storage is available for $1 per month per GB. The service requires a 10 MB download. Earthlink customer service confirmed that Weblife has a Mac version of the software, but only a Windows version is available on the site. As an aside, this is absolutely terrible customer service. I had to pay for the service (and agree to a recurring monthly fee) before I could access the download area and see that there is no Mac version. Earthlink customer service is just as horrible as it was in the days that I fought them to terminate my ISP account. God knows how I’ll be able to kill this monthly fee without terminating my credit card. WebLife Photo The service is similar to Google’s new Picasa software, with desktop software for managing and editing photos plus the ability to publish select photos to the web. Now-standard services such as photo printing are also included. WebLife Backup and Weblife Disk WebLife Backup and WebLife Disk are fairly advanced tools for storing data online. The Backup service allows automatic backups of the entire hard drive, select folders or certain file types (MP3, etc.). Files can also optionally be encrypted. The Disk product is a simple online storage tool, similar to many we’ve profiled in the past. Summary My impression is that these are a useful set of services that may appeal to the millions of existing Earthlink customers. The pricing is high relative to some of the online storage competitors and the new standard that was set by Amazon S3, but the tie in to the desktop client for easy photo management and data storage administration is excellent. They need to clean up their customer service train wreck, though, and release a Mac version of the software. → Read More
Earthlink doesn’t conjure up images of cutting edge new web apps. In fact, the first thing that comes to mind when I think of Earthlink is my old dial-up ISP account that took me forever to cancel. And on more than one occasion I’ve asked Steve Gillmor, who boasts Earthlink as a sponsor on his influential tech show Gillmor Gang, if any of his listeners (early adopter types) would ever actually use Earthlink products. The last couple of months there’ve been a couple of noteworthy Earthlink newsbits – they integrated Pandora (a new web music service) into their ancient portal, and they are testing retail stores in Seattle and San Francisco. They also communicate well with the world through their blog, written by Dave Coustan. All good signs. Today we got more. Out of nowhere Earthlink launched a Bloglines style RSS reader and a del.icio.us style social bookmarking site. Steve Rubel noticed the sites in his referrer logs and checked it out. Neither are cutting edge, but the’ve done a good job grabbing the important features that a large audience might want. More importantly, the services are fast. The RSS reader allows for OPML imports and has a good selection of recommended content. It doesn’t have the advanced features that Rojo and others are coming out with like tagging, content prioritization based on reading habits, etc. (see this overview for other online RSS readers), but it certainly covers the basics well. It also renders HTML and CSS nearly perfectly, something I rant about periodically. The Bookmarking site, like del.icio.us and others, has a browser button for easy bookmarking, and allows tagging. The interface is clean. What excites me most about these launches is that a large new audience will be exposed to newish Web 2.0 ideas. About 12 million people visit Earthlink properties each month, generating nearly a billion page views (MyEarthlink alone has about 2 million uniques and 115 million page views) (source: Comscore). → Read More
