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Subject: Re: UKNM: $10m for 50% of Excite UK sounds cheap
From: Evan Rudowski
Date: Thu, 26 Nov 1998 19:35:02 +0000 (GMT)

Tom said:

>doesn't bode too well for the valuation of the remainder of Excite's
>european asset's mind...

The point is only true if you assume that this was Excite's way of cashing
out . . . which it wasn't. This deal is not the end game; it's the starting
point. BT did not buy half of Excite UK -- Excite gets no cash from the
deal. What is happening is that Excite and BT are creating a new entity
with an initial value of $20 million. Excite contributes its existing UK
business -- already one of the best performing web businesses in the market
-- and BT's contributes to the entity $10 million in cash and ongoing
support. That is going to be one powerful entity. Its $20 million initial
valuation will only increase as the new business starts to perform. The end
game will be determined far in the future and is likely to be a significant
multiple of the inital $20 million valuation if we manage to do our jobs
even half right.

Replicate a similar model elsewhere in Europe and you will see
well-resourced Excite entities operating in each major market, with their
value increasing as they win a fair share of the growing Internet audiences
locally. Then tie them together into a network leveraging one another, as
well as Excite's U.S. capabilities, and it becomes a powerful scenario.

Best regards,

Evan Rudowski
Director, European Operations
Excite, Inc.
23 Kingly Court
London, W1R 5LE, England
+44 (0) 171 447 1802
evanrudatexcitecorp [dot] com <<-- NOTE CHANGE

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  Re: UKNM: freeserve numbers - comments a, Zelda Rhiando
  UKNM: $10m for 50% of Excite UK sounds c, Tom Loosemore

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