Jermoluk Steps Aside at Excite@Home5/14/2000 8:00 PM Eastern
New Orleans-After a rocky few years in which he frequently butted heads with his company's cable-operator owners, Excite@Home Corp. chairman Thomas Jermoluk has resigned his position.
Jermoluk will remain on Excite@Home's board of directors, and president and CEO George Bell will assume Jermoluk's responsibilities.
Last week, Jermoluk accepted a position as a general partner in Menlo Park, Calif.-based venture-capital firm Kleiner Perkins Caufield & Byers. Kleiner Perkins was one of the first investors in @Home.
"Tom's management experience, technical expertise, raw smarts, goodwill and proven leadership will help us to help entrepreneurs," Kleiner Perkins general partner John Doerr said in a press release. "Tom Jermoluk is a missionary with superb team-building skills."
Bell had equal praise for Jermoluk's tenure at Excite@Home.
"Tom has done an amazing job of bringing this company to where it is today," Bell said in a prepared statement. "We will continue to work closely with Tom as a board member and count on his continued wisdom as we grow the franchise."
Jermoluk's departure was not unexpected. He relinquished his president and CEO titles to Bell at the beginning of the year, and he has not played an active role in day-to-day operations since.
Jermoluk took over what was then At Home Corp. in 1996 after serving as a top executive at computer software giant Silicon Graphics Inc. But Jermoluk began to lock horns with his cable partners-especially AT & T Corp.-after At Home bought Bell's company, Internet portal Excite Inc., for $6.5 billion.
Excite@Home's stock ran up as much as 60 percent on the day after Jermoluk's announcement, but for different reasons than his departure. A wire-service report that misinterpreted comments made by Comcast Corp. president Brian Roberts caused Excite@Home stock to leap more than $11 per share in afternoon trading to $28 each.
At the National Show general session here May 9, Roberts praised an earlier deal by AT & T to gain more control of Excite@Home that could also lead to AT & T eventually buying out Comcast's and Cox Communications Inc.'s stakes in the data-service provider.
Roberts said the deal made sense, but he added that he thought so highly of the asset that he would have been willing to reverse the terms and buy out AT & T's position.
After Excite@Home issued statements that it was not the subject of a takeover bid by Comcast, the stock cooled down, closing at $19.94 per share May 9, up $2.44.
Last Wednesday at the show, Bell told attendees that with high-speed Internet services posting "virtually no churn," one of the biggest challenges for cable operators is to sign up broadband customers before their telco competitors do.
Noting that it takes telcos 4.5 hours on average to install digital-subscriber-line services, and that DSL technicians must make second truck rolls for up to 40 percent of installations, Bell said it's difficult to convince DSL subscribers to switch to cable-modem services once they finally get DSL. On average, cable operators spend one hour and 20 minutes on cable-modem installations, he added.
"I would expect the door to get slammed in our face," Bell said during a panel session, which also featured Microsoft Corp. CEO Steve Ballmer and America Online Inc. president Bob Pittman. "The difficulty the consumer went through to get the one thing they have to work is such that they're not willing to listen to other sales pitches, which is difficult," he added.
Excite@Home now counts 1.5 million U.S. subscribers, and the service is available to 26 million "marketable" homes, Bell said. Even though top ISP AOL generates the most Internet traffic, Excite@Home subscribers spend more than 20 hours per week on average using the service, and that's attracting advertisers, he added.
Steve Donohue contributed to this story.