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FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-K are forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. The words "estimate," "plan,"
"intend," "expect," "anticipate," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking
statements are found at various places throughout this report and in the documents incorporated herein by reference. EarthLink, Inc. disclaims
any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise. Although EarthLink, Inc. believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals
will be achieved. Important factors that could cause actual results to differ from estimates or projections contained in the forward-looking
statements are described under "Safe Harbor Statement" in Item 7.
PART I
Item 1. Business.
Overview
EarthLink, Inc. ("EarthLink," "we," "us" or "our") is a leading Internet service provider ("ISP"), providing nationwide Internet access and
related value-added services to its individual and business customers. Our primary service offerings are narrowband, broadband or high-speed,
and wireless Internet access services; web hosting; and advertising and related services. We provide our broad range of services to more than
five million paying customers through a nationwide network of dial-up points of presence ("POPs"), a nationwide broadband footprint and
wireless technologies. We have grown our customer base organically through traditional marketing channels such as direct marketing; media
advertising; alliances with strategic partners and original equipment manufacturers; retail outlets; and word of mouth and referral marketing.
We have also grown our customer base through acquisitions of businesses and subscriber bases.
Our corporate offices are located at 1375 Peachtree St., Atlanta, Georgia 30309, and our telephone number at that location is (404) 815-
0770.
Business Strategy
Our business strategy is to sustain and build upon our strong position in the U.S. Internet access market by focusing on high-growth
opportunities such as broadband and value-priced narrowband access to generate organic subscriber growth; providing a high-quality customer
experience, including a full range of Internet access services and innovative applications; improving operating margins to fund growth; and
emphasizing customer service.
Focus on high
-growth opportunities
We provide broadband Internet access services in markets throughout the U.S., and as of December 31, 2003, we had approximately
1.1 million broadband subscribers. We have established a national broadband footprint via multiple wholesale vendors, enabling us to deploy
digital subscriber line ("DSL"), cable, fixed wireless and/or satellite broadband solutions in multiple markets throughout the U.S. We believe
the broadband market will continue to grow, and we will continue our efforts to expand our broadband footprint by pursuing new partnerships
and relationships with wholesale broadband providers. We are also exploring the commercial feasibility of emerging alternative broadband
access technologies, including power line, fixed wireless or other non-terrestrial based means of access, to expand our broadband footprint
and/or deliver broadband services more cost effectively.
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By acquiring PeoplePC Inc. ("PeoplePC") in July 2002, we acquired a platform that accelerated our participation in the growing value
segment of the narrowband Internet access market, where price is a significant factor in the buying decision. Continued declines in
telecommunications costs have allowed companies to begin offering Internet access services with limited functionality and support services at
comparatively lower prices. We have grown our value-priced narrowband subscriber base with the PeoplePC offering from 68,000 subscribers
at December 31, 2002 to 424,000 subscribers at December 31, 2003. We anticipate the market for value-priced narrowband access will
continue to grow, and we anticipate an increase in sales and marketing efforts to increase our value
-
priced narrowband customer base.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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EXHIBIT INDEX
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