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Om On Earthlink's Day Today

Mid day yesterday Om broke a story that likely affects some friends at Earthlink. I've been unable to reach them so like everyone else including Om and Cynthia the world is awaiting the morning news today out of Atlanta.

A lot of this is a result of the untimely passing of Gary Betty from cancer. But what good can you say when the company still has his bio up, unedited since his death . To me that shows no one is really paying attention to the little things there any more, and the executives are busy figuring out how to sell the company to someone like NetZero or even the private equity market where an all dial up generating cash cow, shed of foolish moves into WiFi and mobile, without a Fixed Mobile Strategy since Brent Cobb (now at cBeyond) left the company via Helio in 2005..

A friend at a leading network equipment provider has been saying that the folks at Earthlink have been on an annuity for years, collecting their pay checks and basically not really innovating outside of VoIP (i.e. Steve Howe and David Elgas). Their Muni-Wireless model is in trouble, and people I knew there from MuniWireless activities who were on the network build out team have also left over the last few months, signaling that changes were coming and now with the news out of Chicago of a pull back seem to be right on the money.

Friends in the mobile world tell me that Sky Dayton's unfettered Earthlink money train has also run off the tracks. With over $200 million in sunk costs and a ton of the mobile customers that Earthlink had running on their Earthlink Mobile service (really a rebranded Sprint or Verizon service) that got handed over to Helio, it seems the "divine right" of dollars from ELN won't be coming their way any more. For a company with less than a rumored 100,000 subs (about a third reportedly came from ELN Mobile to help Helio get on their way) this could mean that Helio may be the next AMP'd in the MVNO world as they follow Disney and others.

Basically for Dayton and the Helio folks, the days of being in Fantasyland are over. That means no more rumored first class flights for executives for business trips and likely a trimming back of their expensive store front leases, like the one in Palo Alto where the hottest game on campus is "guess the time a customer will actually be in the Helio shop." This comes at a time when the word out of South Korea is that SK senior executives are very displeased with Helio's performance and are struggling to continue to find reasons to support it. I'd say Helio's days are numbered unless they can find a way to get new money fast.

For now we sit back and wait for the news...........

As for the Muni Wireless projects Earthlink was so boldly going after, albeit with a flawed model, just look at the news over the last two weeks.

Houston, TX-On hold

St. Petersburg, FL- On hold.

Alexandria and Arlington, VA-on hold.

Now the Windy City too.....

I'd say Om pretty much nailed things.....


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