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Friday, June 27, 2008
Like a Virgin: Hip Helio is history
Atlanta-based EarthLink Inc. is shedding yet another money-losing venture that once was considered key to turning the struggling Internet company around.
Virgin Mobile announced Friday it is buying cell phone upstart Helio, a joint venture between EarthLink and Korea’s SK Telecom, for about $39 million.
Earlier this year, EarthLink announced it was bailing out of the municipal wireless business, which - like Helio - had been seen as a way to revive EarthLink, which was hit hard when Web users shifted from slow dial-up service to faster broadband connections.
Think your portfolio stinks right now? Consider that EarthLink and SK Telecom put about $440 million into Helio when they started the joint venture just two years ago.
Back then, Sky Dayton, the high-tech young gun who founded both EarthLink and Helio, told me that young cell phone users were practically begging for hipper handsets (another guy named Steve Jobs had a similar, but much more fruitful idea) and a cell phone provider that cared about things like social networking and instant messaging as much as phone calls.
“They don’t want their dad’s cellphone anymore,” Dayton said back then.
Or maybe they do. Helio said Friday it only had about 170,000 customers, who will now become customers of Virgin.
Two years ago, Dayton said he was hoping to have about 3 million subscribers by 2010.
