Who were we?
Joe Kraus, Ben Lutch, Ryan McIntyre,
Martin Reinfried, Graham Spencer and Mark Van Haren.
Six Stanford undergrads who met in the same freshman dorm in 1989.
As graduation approached, we decided it would be more fun
to work for ourselves than go find real jobs.
In March 1993, over burritos at Rosita’s Taqueria in
Redwood City, CA, we decided to start a company.
“Unencumbered by reality”
Why decide to build a search engine in 1993?
We chose to start a company first. Then we chose the application.
Six founders: two CS majors, three Symbolic Systems majors,
one Political Science major. We liked software and language.
Our observation: relational databases had more or less “solved”
the structured data problem, but unstructured text
documents still lacked adequate tools for search and
So we set out to build a search engine.
Architext Software was born.
Next stop: Stanford Surplus Store
We bought five VT-220 terminals and two Sun workstations.
Then we hit Costco and bought a few folding tables.
I “borrowed” a few extra desk chairs from Oracle.
Five of us started to code, Graham was our architect and technical leader.
The sixth, Joe Kraus took to the phones,
earning his moniker, “phone boy”.
If you’re starting a company, read a “how to” book…
First customer leads us to a big decision.
Joe Kraus calls up Bob Cringely.
Bob Cringely introduces Joe & Graham to InfoWorld Magazine.
IDG pays Architext $80k to develop a search engine for
an online archive of their magazine properties.
IDG introduces us to Charles River Ventures in Boston.
Charles River introduces us to Geoff Yang at IVP.
Geoff Yang introduces us to Vinod Khosla of Kleiner Perkins.
Vinod buys us a 9GB hard drive after a one hour meeting.
Kleiner Perkins (Vinod) and IVP (Geoff Yang) offer to invest.
Verity offers to buy us.
First Big Crossroads
Verity offers to buy us for $3M.
Kleiner Perkins & IVP offer to invest $3M.
(Not bad for a year’s work.)
Do we cash out?
Do we double down?
Next Step: find a business model
We had venture money and a real office, but no business model.
We began hiring engineers and senior management.
At Vinod’s urging, we experimented with three ideas:
1. Enterprise Software (like Verity)
2. Online Classified Ads
3. Web Search Engine
We launched Excite.com in October 1995 and quickly sold
million-dollar advertising sponsorships.
We chose door number three.
Index Size: 1.5M pages
(Google Index Today: over 8B pages)
4th Worldwide Headquarters: 1091 Shoreline Dr, Mountain View, CA
CEO then IPO
Netscape IPO changes the game.
Successful launch of Excite.com
IPO plans rumored by Infoseek, Lycos, Yahoo.
We need to go public to stay competitive.
We need a CEO.
January 1996, Excite names George Bell as CEO.
April 4, 1996, Excite goes public on the Nasdaq (XCIT),
selling 2,000,000 shares at $17/share.
April 11, 1996, Yahoo goes public.
Let the deal making begin!
July 1996, Excite acquires Magellan.
November 1996, Excite acquires WebCrawler from AOL,
AOL invests in Excite, Excite search powers AOL Search.
April 1997, Netscape Search & Directory Partnership
October 1997, Intuit invests $40M in Excite, Excite Business
and Investing Channel is launched
November 1997, Excite buys Netbot, comparison shopping engine
February 1998, Excite buys MatchLogic for $90M
April 1998, Excite buys Classifieds2000 for $50M
Late 1998, M&A talks begin with Yahoo, Microsoft, others
Excite revenues for 1998 reach $154M, Q4 1998 is cash-flow positive.
5th Worldwide Headquarters: 555 Broadway, Redwood City, CA
Excite puts personalization on home page, April 1998
It seemed like a good idea at the time…
December 1998, Excite CEO George Bell and @Home CEO
Tom Jermoluk meet for the first time.
January 1999, @Home announces plans to buy
Excite for $6.7B in stock.
Vision: marriage of content and broadband access creates
AOL of the broadband age.
Excite CEO George Bell becomes CEO of combined company.
Merger officially closes in May 1999.
Q4 1999. First (and only) profitable quarter on $169M revenue.
CY 1999 Revenues reach $420M. Peak market cap of $35B.
Peak headcount of ~3200.
Silicon Valley Foreshadowing:
Excite@Home moves into shiny new HQ across the street.
Final Worldwide HQ: 400 - 420 Broadway, Redwood City, CA
Homepage Fall 1999, Search Index Grows to 250M Pages
The beginning of the end…
June 1998, AT&T buys TCI for $48B.
May 1999, AT&T buys MediaOne for $54B.
mid 1999, Open Access Debate reaches fever pitch,
calling into question E@H’s exclusivity deals
with cable operators, the company’s largest shareholders.
July 1999, Excite@Home buys iMall for $425M.
December 1999, Excite@Home buys Blue Mountain Arts
for $780M, $350M in cash.
April 2001, CEO George Bell resigns.
Patti Hart, former CEO of Telocity, becomes CEO.
The death spiral.
June 2001, Excite@Home raises $100M in convertible debt
from Promethean Capital Management and
Angelo & Co.
August 2001, E@H fires Ernst & Young, hires PWC. Debt
holders demand $50M debt repayment.
Cox & Comcast announce they will cease to offer internet via E@H.
September 2001. Blue Mountain Arts sold to American Greetings
for $35M in cash.
October 2001. Excite@Home files for Chapter 11. Nationwide
high-speed fiber network sold to AT&T for $307M.
iWon.com acquires Excite brand and Excite.com domain for $10M.
March 2004, Ask Jeeves acquires Excite Network.
March 2005, InterActiveCorp (Barry Diller) acquires Ask Jeeves.
What might have been?
Would Excite have survived as an independent company?
Would Excite have survived as a brand by merging with Yahoo?
Excite’s revenues were built entirely on old-media style
impression-based banner ads and sponsorships.
In the bursting of the bubble, non-measurable, non-CPC spend
Excite’s focus was too broad, the cost-structure too expensive.
Unlikely that the company could have re-tooled and restructured
quickly enough to adapt to the rise of the CPC ad model and
live through the “nuclear winter” of 2001 - 2003.
So Close, Yet So Far…
Or, why wasn’t Excite Google?
Key Contributors to Google’s Dominance:
1. Late mover advantage
2. Focus on search, a better mousetrap
3. Open source, commodity hardware, cheap bandwidth
4. “Discovery” of a sustainable business model*
5. Great Execution
*CPC advertising has transformed marketing into a quantitative
discipline with measurable ROI.