It is impossible to pinpoint a single reason for the company's decline, but some people who were at Excite and in 1998 say the contentious, hastily crafted merger was doomed from the start.Īt that time, the stock prices of many Internet companies were reaching stratospheric levels. "And here's this guy who is 27 years old going in there, and the cable guys are like, 'It's all going to be about this? Who are you?.We own you guys.'" They're 40, 50 years old," a former manager said of many cable veterans. "These guys, especially the middle managers, are lifers. Born in 1971, Kraus personified the youth-oriented dot-com culture that others depised. Sources say much of the antagonism was directed at Excite co-founder Joe Kraus, who took responsibility for cable operations after the merger. The clash was most daunting for senior executives who suddenly found themselves confronting people with vastly different backgrounds. The two sides rarely, if ever, saw eye to eye. By contrast, those in camp proudly branded themselves "cable guys"-older, more experienced, more hardware-oriented and suspicious of the dot-com culture. And that has never been the case with this company."Įxcite was driven largely by marketing and sales people who considered themselves pioneers of the New Economy. "But if there's one thing that you need it's that your team needs to be singing off the same page of music. Operationally and say, 'Should you have done this?' or 'Should you haveīought that?'" said Thomas Jermoluk, former chairman and CEO of and now a partner with Kleiner Perkins. "Of course, there are a thousand things you can go back and look atĭownload a PDF version of this special report. The most extreme problems involved integration issues-a point of particular irony because the main financial backer for both companies, Silicon Valley powerhouse Kleiner Perkins Caufield & Byers, is known for espousing the Japanese-inspired keiretsu philosophy of integrating businesses harmoniously. Sources close to say the marriage of the Web portal and high-speed Internet service fell disastrously short of expectations largely because of a series of management blunders. On Thursday, said it does not plan to meet lenders' demands that it pay up to $50 million by Friday, saying the deadline is unjustified. The company's stock is trading around 50 cents, a sliver of the $99 share price it commanded in April 1999.ĭespite a stock boost Wednesday over rumors of new investors, bankruptcy looms. What went wrong for Brumfield, principal analyst, Broadband Intelligenceīut these accomplishments are easily overshadowed by the obstacles must overcome to survive in the post-apocalyptic Internet landscape. Billed as a "new media network for the 21st century," is still by far the largest high-speed Internet service provider in the United States, and it is among the top 10 ISPs overall when measured by subscribers alone. Only two years ago, $6.7 billion merger with Excite-the largest of two Internet companies-appeared to have all the makings of an industry leader: heavy traffic, popular technology, major-league financing and a head start over would-be competitors. What would follow for was a plunge more frightening than any Great America ride. In September, only weeks after his pep talk, Bell resigned as CEO, sparking a broad management defection. They just wanted everyone to 'recommit.'" "They didn't acknowledge any of the problems that were going on. "Everyone thought it was ridiculous," said a former employee who attended the retreat in Santa Clara, Calif., in the heart of Silicon Valley. They scorned a pep speech in which then-Chief Executive George Bell asked participants to stand up and shout a somewhat dubious new company mantra, "Recommit!" The company was in the midst of its own harrowing journey, and some managers took offense at the event's cheerful veneer. REDWOOD CITY, picked a fitting venue for its management revival meeting last summer, perhaps unwittingly: Paramount's Great America amusement park has been home to some of the country's most terrifying roller-coaster rides for 25 years. By Rachel Konrad, Corey Grice and John Borland
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