Excite Loosens Ties to Enliven

Web portal and broadband firm Excite@Home distanced itself from its pioneering rich media ad subsidiary Enliven on Wednesday, spinning out the firm in an effort to concentrate on its core business and boost its bottom line.

As an independent, privately held corporation, Waltham, Mass.-based Enliven — widely regarded as the first true rich media banner ad provider — is now operating with funding from Sage Hill Partners, a venture capital firm at which Scott Kliger, a founder of Enliven, is a partner.

The amount of funding Enliven received from Sage Hill was not disclosed. Kleiger and Cambridge, Mass.-based Sage Hill’s chief executive and founding partner Stephen Johnson will both sit on Enliven’s board of directors.

Excite@Home retains a minority interest in the company and, according to spokespeople from Excite, plans to continue using and selling banner ads based on Enliven’s rich media technology. Susan Bratton, senior vice president of media sales and marketing at Excite@Home will also serve on Enliven’s board of directors. However, Enliven said it is free to form similar partnerships with other major publishers.

Excite-owned ad network MatchLogic will continue to sell Enliven’s ad technology, as well, the companies said.

Much of Enliven’s management teams remains in place following the divestiture, with the firm’s general manager, Frank Kashner, assuming the top post of president.

The spin-out had been expected for several weeks. During Excite’s most recent earnings announcement, spokespeople from the company said that the soft online ad market had hurt Enliven’s bottom line, and that Excite would either sell or spin-off the subsidiary. @Home had originally purchased the firm — then called Narrative Communications — for $96 million in stock, in January 1999.

Despite Wednesday’s divestiture, spokespeople from Enliven said the firm is optimistic, although they declined to disclose details of the company’s revenue predictions.

“We’re psyched … we’re a little bit like a cat with nine lives, which we think we have to be as the market comes to meet us,” Kashner said.

Kashner did say that the independent company would continue to serve clients the same way it always had.

Some changes nevertheless are potentially in store for the firm. For one, Kashner said Enliven is considering future moves into emerging media, while broadening its existing product acceptance on the Web.

“We’re not going to lose sight of wireless,” Kashner said. “We’re watching it … And through our continued relationship with Excite we’re going to be paying attention to developments in broadband and interactive TV,” Kashner said. “We’re really core to Excite’s ad product development still.”

“We’re at the very beginning of the [Web] product lifecycle,” Kashner added. “We will continue to develop [our] products … we think their penetration is one percent of their potential penetration.”

The former parent, meanwhile, touted the benefits to both itself and the newly spun-off Enliven.

“This is an important step in helping Excite@Home focus on its critical objectives — the broadband opportunity and profitability,” said Excite@Home’s Bratton. “I’ve believed in the power of Enliven since day one, and look forward to helping them push the boundaries of effective online advertising. They have solutions that work and provide services both for advertisers new to rich media as well as more experienced online marketers.”

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