EarthLink, MindSpring Merge

(CBS MarketWatch)  EarthLink and MindSpring agreed Thursday to merge in a pact that would create the nation's second-largest Internet service provider and a shot at taking on market leader America Online.

The combined company, to be called EarthLink and to trade under the symbol "ELNK," will have 3 million subscribers, a market capital of $3 billion and annual sales of $650 million.

While the new entity will leapfrog past AT&T and Microsoft Network as the No. 2 Net service provider, it still will trail AOL and its approximately 20 million subscribers by a wide margin. No matter, the companies say.

"Our mission is to become the leading ISP in the world. We are going to make it happen, and perhaps faster than you think," Charles "Garry" Betty, chief executive of EarthLink, said in a morning news conference. "Customers didn't know they had an alternative before (to AOL). Now they do."

Under the agreement, MindSpring stockholders will receive one share of the new company for each share they own. EarthLink stockholders will receive 1.615 shares of the new company for each share they own.

MindSpring chief executive Charles Brewer will become chairman of the new entity. EarthLink's Betty will remain CEO. The company will be based in MindSpring's headquarters in Atlanta, with the deal expected to close in the first quarter of 2000.

By Jeffry Bartash