AT&T, Excite@Home At Center Of Rumors

AT&T has muddied the waters with a nondenial of reports that it would engineer a sell-off of the Excite content piece of Excite@Home, perhaps to America Online.

"We have periodically explored, and we continue to explore, many alternatives with respect to our Internet strategy and our ownership interest in Excite@Home," AT&T said in a statement issued late Thursday "in light of continuing rumors."

"The alternatives include internal options as well as discussions with third parties. 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."

It wasn't immediately clear how the statement jibed with comments by Leo Hindery Jr., AT&T Broadband and Internet Services president, who told Reuters news service late Wednesday there was nothing to the AOL reports: "Absolutely not. There've been no discussions under way whatsoever." Similarly, Excite@Home President George Bell told a research conference: "Is Excite in play? No. We just went through a merger with @Home."

The Los Angeles Times reported that AT&T had sent a proposal to Excite@Home's board this week suggesting a separation of the company's content and high-speed Internet parts. AT&T owns a majority of Excite@Home stock but lacks control under the company's governing rules. Cox Communications has opposed the idea and possesses veto power, The Los Angeles Times said.

@Home bought Excite because the management was determined to broaden its business well beyond the "dumb pipes" of high-speed Internet access. AT&T, however, has said it doesn't want to be in the programming business and would like to have a partnership with AOL, which conflicts with the Excite@Home relationship.

Excite@Home stock fell $2 Thursday, closing at $41.44, after jumping 13 percent Wednesday.