EarthLink on AOL Dialup Acquisition: We Wanted To Buy, But Too Late Now; Other Bigger Options

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EarthLink announced its Q4 earnings yesterday and the numbers as with others were mixed: it had a profit of $27.3 million compared with a loss of $9.5 million in the year ago quarter (when it was laden with Helio debt/investment and mini WiFi projects as well)…these results include a $78.7 million non-cash impairment charge, partially offset by a $56.1 million tax benefit. Its revenue fell 23 percent to $216.1 million, from $282 million in the year-ago quarter, mainly due to continuing decline in its dialup sub and revenue numbers.

The main query to ELNK CEO Rolla Huff on the earnings call: its interest in buying AOL’s dialup business from Time Warner (NYSE: TWX). In the earnings call two quarters ago, Huff was a lot more enthusiastic about it:

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This conversation is a total laugh. Earthlink's income is a pittance, compared with AOL's Access business. Dude – reality check for you as CEO: Nobody in their right mind would take your stock and leave $800 million in earnings on the table.

You are truly delusional.

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