A bit of a flashback…

My first individual Internet access account was through CERF.net. Access was through a 14.4 dial-up, and the monthly bills were not exactly cheap. Later access became successively faster and cheaper through kaiwan.com, speed.net, and PacBell. I got rid of dial-up in 1997 when Cox (my local cable company) started offering internet access through @Home.

The technical folks in @Home - at least those that made public postings - seemed fairly sharp. Certainly the @Home service through Cox worked well. Doubtless the Cox folks are due a fair measure of credit, as @Home subscribers through other local cable companies had more trouble with their service. Because the problem areas tended to be local, it seemed that the @Home network itself was well-run.

The notion of a single common company (@Home) to run a shared network backbone and infrastructure for multiple cable companies seemed to make a lot of sense at a time when local cable companies had little or no experience with the Internet or digital data networks.

Still - there were odd signs. In addition to the internet connection, @Home also offered an odd client application - sort of a web portal (poorly designed) running on client-side Java code. Why they did this is still a mystery to me, though I suspect someone in management was using AOL as a model. You could completely ignore the odd client and simply use the Internet connection.

The basic point of the Internet was and is to allow anyone (with an Internet connection) to get uniform access to anywhere on the Internet. This means that there was no particular reason folks with @Home connections would want to use the @Home portal. Why anyone thought there was value in the @Home portal, I never did understand.

Apparently some of the folks directing strategy for @Home thought AOL was somehow a model for their business. Using AOL as a model never did make sense. AOL was originally successful in a time when connecting to the AOL network and AOL-hosted content was worth more to ordinary folks than access to the Internet. As the content on the Internet increased, the notion of connecting to a proprietary (AOL) subnet and the relative value of AOL-hosted content was going to decrease. Eventually it seemed that outfits like AOL should become largely irrelevant.

At the least this is how I thought things would work out. On the other hand, I wasn’t making millions like the VC strategists or the guys directing @Home - maybe they knew something I did not.

Then in 1999 came the merger of @Home with Excite. To me this seemed like an electric utility merging with a company that made toasters. Sure they both used electricity, but the business models are very different. Apparently the VC’s made out all right, but Excite cratered and took @Home down with it.

Several months back I signed up (briefly) for AOL - mainly out of curiousity as to why they survived. Heck, maybe there was some advantage I just did not understand, so it had to be worth a look. After poking around a bit I found nothing of compelling value on the AOL network, and cancelled the account.

Now we see AOL losing subscribers at a huge rate.

Wonder if the former @Home guys who thought AOL was a good model have made the connection?? On the other hand…

Employment Agreement - At Home Corp. and Tom A. Jermoluk … 1. Base Compensation. Your base salary will be $500,000 per year. … (a) You will be granted the right to purchase one million five hundred thousand (1,500,000) shares … currently expected to be ten cents ($.10) per share. You also will be granted the right to purchase fifty thousand (50,000) shares … at $10.00 per share … convertible into five hundred thousand (500,000) shares … the Restricted Stock and Series K Stock shall have an aggregate fair market value of $10,000,000 …

Some execs scored big as company valuesplunged “Thomas Jermoluk, former CEO of At Home, sold $50.3 million before the cable broadband giant filed for bankruptcy. The company, known as Excite@Home, once boasted a market value of $13 billion before vaporizing following squabbles with its main shareholder and partner, AT&T. Jermoluk is now a venture partner at Kleiner Perkins Caufield & Byers.”

Was Excite@Home doomed at the altar? “The deal proved a lucrative exit strategy for Excite investors who were growing increasingly concerned about the company’s prospects. Generally, the goal of venture capital firms is to deliver a large return to investors, either by selling stock after a company goes public or by selling the entire company at a premium.”

Apparently it pays well to run a company into the ground.