Excite@Home Surges on Rumors

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Excite@Home Corp.'s stock has been up on published
reports that the company is the target of an acquisition, or that it is planning to split
into two separate content and distribution entities.

Excite@Home stock took a wild ride last week, spiking $5.06
per share to $43.44 Sept. 29 on rumors that it would be sold to America Online Inc.

The stock retreated to $41.44 Sept. 30 after those rumors
were quashed by AT&T Broadband & Internet Services president Leo J. Hindery Jr.,
who called the AOL rumor "absurd" in published reports. AT&T Corp. owns a
controlling stake in Excite@Home.

Later, Excite@Home's share price climbed again as news
of a content-distribution schism surfaced. In early trading Oct. 1, the stock was up $3.63
per share to $45.06.

AT&T released a prepared statement Sept. 30 that seemed
to leave the door open for a potential Excite@Home split.

"We have periodically explored, and we continue to
explore, many alternatives with respect to our Internet strategy and our ownership
interests in Excite@Home," the company said.

"The alternatives include internal options, as well as
discussions with third parties," it added. "The exploration of alternatives
remains at the very preliminary stage, and at this time, AT&T has not made any
decision to pursue any particular alternative or transaction. There is no assurance that
any transaction will occur, and we do not intend to comment further unless and until we
decide definitively to proceed with one or more alternatives, if any."

AT&T and Excite@Home have been at loggerheads for the
past few months. At the forefront of the dissent is Excite@Home's strategy to expand
in the content arena, while AT&T insists that it should remain a distribution company.

A split of the content and distribution assets would appear
to solve that problem. But there seems to be another voice of dissent on the Excite@Home
board of directors -- Cox Communications Inc.

According to several published reports, a board meeting to
discuss the possibility of a split, which was scheduled for Monday (Oct. 4), has been
canceled, apparently because Cox strongly objects to a separation at the data-over-cable
provider.

Cox and Comcast Corp., as early investors in Excite@Home,
have veto power over strategic transactions by the company. Cox declined to comment on the
rumors, but spokeswoman Amy Cohn said the company is happy with Excite@Home's
strategy as it is.

Excite@Home chairman Thomas Jermoluk, at the
PricewaterhouseCoopers Global Convergence Summit in New York last week, said he expects
his company's relationship with AT&T to continue.

"We expect to have a very long-term relationship with
AT&T," he said. "It's our largest shareholder and our largest MSO
partner. Our contracts with our partners were intended to give us time to get to economies
of scale."

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