Earnings: Earthlink CEO: Cutting Off Helio Investment Was Hard But Necesssary

During today’s EarthLink call discussing Q4 and full year results, CEO Rolla Huff said it was a hard decision to stop investing in Helio, which is performing quite strongly: “We made hard decisions around getting our cost structure down. We made a very difficult decision…to not continue making incremental investments in Helio.”

Last year, EarthLink and SKT agreed that SKT would invest up to $270 million in Helio and EarthLink would be no longer have any future financial exposure to Helio results. EarthLink does maintain an ownership position in Helio with potential investment return in the future. For 2007, EarthLink’s share of Helio’s net loss was $111.3 million.

Helio stats: We’ve already had some of these but here are the stats that matter to Earthlink (NSDQ: ELNK), which says that Helio was exceeding many of the typical industry averages:

— Average revenue per user was more than $85 a month compared to an industry average of under $50.
— users average more than 550 text messages a month; instant message penetration is three times the industry average.
— 95 percent of Helio customers access the web through their mobile devices versus an industry average of about 13 percent.
— In December, Helio members uploaded photos from their devices to the web at a rate five times the industry average.
— Helio finished the quarter with just over 180,000 subscribers, representing a 28 percent growth rate over the prior quarter, and Helio recorded revenues of $56 million, an increase of 147 percent over the prior year and 8 percent over the prior quarter.

On Sky Dayton’s move: Huff: “Sky has a history of creating and building strong brands and he


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