EarthLink Considering Strategic Alternatives for Municipal Wireless Business

Nov 16, 2007, 00:00 ET from EarthLink

    ATLANTA, Nov. 16 /PRNewswire-FirstCall/ -- EarthLink (Nasdaq:   ELNK)
 today announced that it would begin a process to consider its strategic
 alternatives for its municipal wireless business.
     "After thorough review and analysis of our municipal wireless business
 we have decided that making significant further investments in this
 business could be inconsistent with our objective of maximizing shareholder
 value," said Rolla P. Huff, EarthLink president and CEO.
     "Accordingly, at this time, we are considering our strategic
 alternatives with respect to this business," Huff added.
     EarthLink will seek to work closely with the municipalities in which it
 has operations as it considers these alternatives.
     The net book value of the assets attributable to EarthLink's municipal
 wireless business is approximately $40 million.
     About EarthLink
     "EarthLink. We revolve around you(TM)." As the nation's next generation
 Internet service provider, Atlanta-based EarthLink has earned an
 award-winning reputation for outstanding customer service and its suite of
 online products and services. EarthLink offers what every user should
 expect from their Internet experience: high-quality connectivity, minimal
 online intrusions and customizable features. Whether it's dial-up,
 high-speed, voice, web hosting, wireless or "EarthLink Extras" like home
 networking or security, EarthLink connects people to the power and
 possibilities of the Internet. Learn more about EarthLink by calling (800)
 EARTHLINK or visiting EarthLink's Web site at
     Cautionary Information Regarding Forward-Looking Statements
     This press release includes forward-looking" statements (rather than
 historical facts) that are subject to risks and uncertainties that could
 cause actual results to differ materially from those described. Although we
 believe that the expectations expressed in these forward-looking statements
 are reasonable, we cannot promise that our expectations will turn out to be
 correct. Our actual results could be materially different from and worse
 than our expectations. With respect to such forward-looking statements, we
 seek the protections afforded by the Private Securities Litigation Reform
 Act of 1995. These risks include, without limitation, (1) that we might not
 realize the benefits we are seeking from the corporate restructuring plan
 announced on August 28, 2007 and that our corporate restructuring plan
 might have a negative effect on our efforts to maintain our subscribers and
 our relationships with our business partners; (2) that we may have to
 undertake further restructuring plans that would entail additional charges
 and cause us to take additional actions, including incurring asset
 impairment and facility exit and restructuring charges that may result from
 our continuing review of our growth initiatives such as our consideration
 of alternatives for our municipal wireless business; (3) that we may not
 successfully enhance existing or develop new products and services in a
 cost-effective manner to meet customer demand in the rapidly evolving
 market for Internet, wireless and IP- based voice communications services,
 including new products and services offered in connection with our voice
 and municipal broadband network growth initiatives, which we do not expect
 to be profitable in their early stages; (4) that our service offerings may
 fail to be competitive with existing and new competitors; (5) that
 competitive product, price or marketing pressures could cause us to lose
 existing customers to competitors (churn), or may cause us to reduce prices
 for our services which could adversely impact average revenue per user; (6)
 that we may be unsuccessful in making and integrating acquisitions into our
 business, which could result in operating difficulties, losses and other
 adverse consequences; (7) that the continued decline of our narrowband
 revenues could adversely affect our profitability and adversely impact our
 ability to invest in other initiatives; (8) that we may not be able to
 successfully manage the costs associated with delivering our wireline
 broadband services, which could adversely affect our ability to grow or
 sustain revenues and our profitability; (9) that companies may not provide
 last mile broadband access to us on a wholesale basis or on terms or at
 prices that allow us to grow and be profitable; (10) that our commercial
 and alliance arrangements may be terminated or may not be as beneficial as
 anticipated, which could adversely affect our ability to increase our
 subscriber base; (11) that our business may suffer if our third-parties for
 technical and customer support and certain billing services are unable to
 provide these services, cannot expand to meet our needs or terminate their
 relationships with us; (12) that service interruptions or impediments could
 harm our business; (13) that government regulations could force us to
 change our business practices; (14) that changes in, or interpretations of,
 laws regarding consumer protection could subject us to liability or cause
 us to change our practices; (15) that we may not be able to protect our
 proprietary technologies or successfully defend infringement claims and may
 be required to enter licensing arrangements on unfavorable terms; (16) that
 we may be accused of infringing upon the intellectual property rights of
 third parties, which is costly to defend and could limit our ability to use
 certain technologies in the future; (17) that we could face substantial
 liabilities if we are unable to successfully defend against legal actions;
 (18) that our business depends on the continued development of effective
 business support systems, processes and personnel; (19) that we may be
 unable to hire and retain sufficient qualified personnel, and the loss of
 any of our key executive officers could adversely affect us; (20) that we
 may not obtain a sufficient number of wireless broadband customers in a
 municipality to generate a sufficient return on our investment in a
 wireless broadband network in that municipality; (21) that certain aspects
 of our VoIP service are not the same as traditional telephone service,
 which may limit the acceptance of our services by mainstream consumers and
 our potential for growth; (22) that our E911 emergency services are
 different from those offered by traditional wireline telephone companies
 and may expose us to significant liability; (23) that our ability to
 provide our VoIP service is dependent upon third-party facilities and
 equipment, the failure of which could cause delays or interruptions of our
 service, damage our reputation, cause us to lose customers and limit our
 growth; (24) that we may not realize the benefits we are seeking from our
 investments in the HELIO joint venture or other investment activities as a
 result of lower than predicted revenues or subscriber levels of the
 companies in which we invest, larger funding requirements for those
 companies or otherwise; (25) that our stock price has been volatile
 historically and may continue to be volatile; (26) that our indebtedness
 could adversely affect our financial health and limit our ability to react
 to changes in our industry or to implement our strategic initiatives; (27)
 that we may be unable to repurchase our convertible senior notes for cash
 when required by the holders, including following a fundamental change, or
 to pay the cash portion of the conversion value upon conversion of any
 notes by the holders; (28) that the convertible note hedge and warrant
 transactions may affect the value of our common stock; and (29) that some
 provisions of Delaware law, our second restated certificate of
 incorporation and amended and restated bylaws may be deemed to have an
 anti-takeover effect and may delay or prevent a tender offer or takeover
 attempt that a stockholder might consider in its best interest. These risks
 and uncertainties, as well as other risks and uncertainties that could
 cause our actual results to differ significantly from management's
 expectations, are not intended to represent a complete list of all risks
 and uncertainties inherent in our business, and should be read in
 conjunction with the more detailed cautionary statements and risk factors
 included in our Annual Report on Form 10-K for the year ended December 31,
 2006, as amended.

SOURCE EarthLink