Rumors of a Split Fail to Distract Excite@Home's Stevens From the Art of the Deal

Excite@Home's Mark Stevens continues to project a bright future for the company's hybrid model of content and access.
Author:
Publish date:

SAN FRANCISCO -- While talk circulates about new strategies that could reshape

Excite@Home

(ATHM) - Get Report

, Mark Stevens is plowing ahead with a tough job: arranging partnerships and acquisitions for a company that may look radically different a few weeks from now.

Speculation is

mounting on Wall Street that Excite@Home is under pressure from investors to split into two companies and sell off its Excite portal business. Its biggest investor,

AT&T

(T) - Get Report

is clearly interested in getting out of the content business, but the company's CEO Tom Jermoluk and its other major cable partners are reported to be sticking to the hybrid strategy of marrying content with access.

Amidst the swirling rumors, Stevens, Excite@Home's executive vice president for corporate business development, toils away as the company's deal-maker. Though he's not nearly as well known as Jermoluk or George Bell, the company's president, Stevens is arguably Excite@Home's most important behind-the-scenes player, engineering a partnership-cum-investment strategy designed to maintain the company's position as the dominant broadband player.

Stevens, as well as other officials at Excite@Home, declined to talk about the speculation of a sale of part or all of the company. But if anyone can stabilize this rocking boat, it's probably him. An elite Silicon Valley lawyer/businessman, Stevens cuts deals that assist in creating a compelling mix of content and services on the Excite portal, a task that will help the company take on

America Online

(AOL)

rather than being taken out by it.

Far from being a bad fit, the hybrid of content and high-speed Net access is what sets Excite@Home apart from its rivals, Stevens says. "We're the only ones with a clear strategy," he says. "Which applications are going to be the killer applications in the first generation of the broadband future? We'll probably choose those."

But rather than trying to become the biggest portal on the block, like AOL or its online rival

Yahoo!

(YHOO)

, Excite@Home aims to become the marketing wizard of the portal world.

"We are the portal that is most able to monetize users and page views and the data we collect," says Stevens. "We can turn great content and a great demographic into a successful business model better than anyone else."

Like a

consigliere

, Stevens operates outside the glow of the media spotlight, plotting strategy, proposing investments and cutting the most favorable deals for the company. And as the chief deal-maker for the leading high-speed Internet service and content company, Stevens says his phone rings constantly with calls from companies trying to figure out how they're going to fit into the world of fast Internet connectivity. Perhaps that's why his office sits right beside Bell's.

Since the merger between

Excite

and

@Home

was completed, the company has either acquired or invested in 10 Internet companies, including

General Magic

(GMGC)

,

Northpoint

(NPNT)

and

Pogo.com

(formerly the

Total Entertainment Network

). This builds on a number of investments and acquisitions that @Home and Excite made separately before merging. Four of these companies -- including sports-content company

Quokka

(QKKA)

-- are public. Excite@Home CFO Ken Goldman says the company's total portfolio claimed $100 million in unrealized gains as of the second quarter.

Stevens and Goldman say Excite@Home will make one to two new investments per month, but they're quick to point out that the company isn't in the venture capital business.

"It's not about turning $100 million into $200 million," explains Stevens. "It's really about how

investment drives and leverages our core business."

So, for example, Excite@Home on Aug. 17 announced a $55 million investment in online ticket sales company

tickets.com

to fill a hole in the advertising-and-commerce-supported Excite portal. And, in July, the company spent $425 million

to buy

iMall

(IMAL)

to help its

@Work

division to sell businesses hosting and e-commerce software.

Erick Hachenburg, Pogo's CEO, can attest to Stevens' negotiating skills. In deal talks with Pogo, Stevens stressed Excite@Home's desire to get access to all of the games in development at Pogo. But Hachenburg was reluctant to agree, especially since his company had yet to launch its own Web site. Ultimately, Stevens convinced Pogo that its distribution network was its critical asset, not its Web site, and Pogo gave Excite@Home what it wanted.

"He forced the issue," recalls Hachenburg. "It was his argument that we eventually adopted as our internal policy."

Go West (Again), Young Man

A Cupertino, Calif., native, Stevens is a quintessential Valley product, a child of the "blue sky" generation in California that built a middle-class utopia on the back of the military-industrial economy. During high school, he wore a calculator on his belt. He entered

Santa Clara University

already four courses short of a bachelor's degree in math. He graduated in 1979, when he was just 20, and took a job with a defense contractor as an engineer, following in the footsteps of his father, who worked for 35 years at

GTE Sylvania

.

Dissatisfied, Stevens soon entered

Northwestern University School of Law

on a full scholarship. Upon graduation, he returned to Palo Alto and convinced

Fenwick & West's

Gordon Davidson, now the firm's chairman, to hire him. An expert in law and technology in the Valley's early days, Stevens rose quickly through the firm's ranks and represented a roster of blue-chip clients such as

Excite

,

Oracle

(ORCL) - Get Report

and

Electronic Arts

(ERTS)

.

So successful was Stevens that he was pegged as a successor to Davidson before Excite's Bell pulled him aside one evening -- while the two were in the final throes of negotiating Excite's $7 billion merger with @Home -- and offered Stevens the about-to-be-merged company's position of chief deal-maker. Now, at Excite@Home, Stevens is Davidson's biggest client.

"He's very quick on his feet, very creative," Davidson says of Stevens. "The thing that really shines through is his intellect. You can see that he thinks two or three moves ahead."

Tom Gimple, CEO of tickets.com, says he appreciated Stevens' rare combination of business and legal experience when the two were cutting a deal. Gimple is also one of several people who praises Stevens' pragmatism and his ability to keep his eye on the big picture and not let a deal get dragged down by the details.

"Mark

has a genuine interest in getting a deal done quickly," says Gimple. "In the Internet space, time kills a deal. Mark is very conscious of that, and he tries to move very quickly. That's not something we find with people we sit down with."