Data Op Adds Retail Outlets

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High-speed Internet-service provider Excite@Home Corp.
announced the expansion of its retail distribution network with the addition of two chains
last week: San Francisco-based consumer-electronics retailer the good guys! and national
office superstore Office Depot.

Excite@Home's pre-installation kit -- which includes
installation discounts and a CD-ROM demo of the system, but no actual cable-modem hardware
-- already has a retail presence in about 150 storefronts, including nearly 50 CompUSA
stores, according to Excite@Home vice president of business development Paul Salzinger. He
predicted that 250 retail locations would sell Excite@Home by the end of the year.

Starting this week, Circuit City Stores Inc. will also
begin to market the Excite@Home kit. The retailer is expected to carry the installation
kit in 60 of its stores by the end of the year. It already works with MediaOne Group Inc.
to sell the Road Runner high-speed service in a few markets.

"Retailers are excited about their ability to sell
this because it's a new technology," Salzinger said, adding, "We're
helping to drive traffic" to their stores.

Merchandising manager Dominic Leung said the good guys!
placed the Excite@Home demonstration kiosks in 12 of its retail sales floors over the past
week or two, and it plans to add the service to as many of its 79 West Coast-based stores
as possible as soon as it's feasible. Store managers that weren't chosen among
the first to carry the product have expressed their jealousy, he added.

The entertainment retailer -- which dropped its PC
department several months ago -- wants to make broadband Internet a new store category.
Leung said. It is placing Excite@Home -- the first in a line of broadband products that
will likely include competitors such as digital subscriber line -- as close to the front
of the store as possible.

To draw customers into the stores for demonstrations this
past weekend, the good guys! advertised a drawing for a $100 gift certificate for store
merchandise.

Initially, the displays use CD-ROMs to demonstrate the
service's high-speed capabilities. But ultimately, the good guys! hopes to have its
stores wired for cable wherever feasible so that its sales staff can demonstrate features
such as full-motion video using live Web sites.

The retailer went to market with the pre-installation kit
before the stores were wired for cable and before it became feasible to sell cable modems
because it believes time to market is crucial.

Since the first retailers began selling the
pre-installation kits a year ago, Salzinger said, Excite@Home has learned that it can get
more stores to deploy the merchandising displays on a larger scale by using CD-ROM
demonstrations than by waiting for local cable operators to wire the stores.

He added that stores using CD-ROM demos have seen
"just as many sign-ups" as their counterparts that are wired with live,
high-speed Internet access.

Salzinger and Leung were both hopeful that Excite@Home
retailers would begin selling cable modems before the end of this year. Salzinger said
Excite@Home will not bundle the modem with the pre-installation kit, instead leaving
modem-purchasing decisions up to retailers.

Leung predicted that high-speed Internet services could
prove to be hot sellers for the holidays. "I can see people buying this to reward
themselves, or wives buying this for their husbands," he added.

Salzinger said there had been some discussion at
Excite@Home about whether to ship the pre-installation kits with holiday bows around them.
"Maybe next year," he added.

But some Excite@Home affiliates are running holiday
promotions, Salzinger said, adding that AT&T Broadband & Internet Services --
which serves the lion's share of the good guys! West Coast markets -- plans to offer
$75 American Express Co. gift checks to customers who buy pre-installation kits.

Whether they're sold as gifts or personal convenience
items, the good guys! is counting on the kits to sell well. "I bought a lot of
inventory," Leung said.

Office Depot will initially roll out Excite@Home at 75 of
its more than 750 stores.

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