Dial-UP value by ELN

Ali Mokerabi

Thanks. Actually, to follow-up on the first question, I was wondering, in considering acquisitions of access subs, can you give us an idea of how you value those? What lifetime value are you looking for and how much you might be willing to spend on each subscriber?

Rolla P. Huff, CEO, EarthLink

Sure. Well, let me just spend a few seconds talking to you about how we think about it. I probably won’t get into any specific valuations but as we said in our opening comments, the tenure matters in this business and so we’ve had, as you can imagine, over the years we’ve got quite an amount of information about how various cohort groups tend to churn, based on tenure, based on geography -- we have more data than you can shake a stick at here. And so as we look at any base of customers, we look at those customers against our knowledge base of what they are likely to do and we look at what cash we think we’ll generate and then any offers that we have made in the past are based on how we value that set of cash flows.

Ali Mokerabi

I see. So again, based on that first question, then I’m assuming that you would not be open to acquiring the entire AOL, what they have, over 7 million or 8 million subscribers currently. You would probably look at each different region that they serve and as you said, based on -- make your decision based on tenure and how much cash they’ll bring in?

Rolla Huff

Well, I’m not prepared to say that we will or won’t consider anything. I’m prepared to say that we’re not going to do anything that we believe isn’t going to provide some sort of return to our shareholders.

source = seeking alpha's transcript of ELN's 4Q07 call