AT HOME CORP, 424B4, 1998-08-13

AT HOME CORP
424B4, 1998-08-13
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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<PAGE>

Filed pursuant to rule 424(b)(4)
Registration No. 333-60049
PROSPECTUS
2,500,000 SHARES

[LOGO OF @HomeNetwork]
AT HOME CORPORATION
SERIES A COMMON STOCK

---------------

All of the 2,500,000 shares of Series A Common Stock offered hereby are
being sold by At Home Corporation (the "Company" or "@Home"). The Company's
Series A Common Stock is traded on the Nasdaq National Market under the symbol
"ATHM." On August 12, 1998, the last reported sale price of the Series A
Common Stock was $46 1/8 per share. See "Price Range of Common Stock." It is
expected that Tele-Communications, Inc. ("TCI") will purchase 800,000 shares
of the Series A Common Stock offered hereby.

The Company has three series of common stock: Series A Common Stock, Series
B Common Stock and Series K Common Stock (collectively, the "Common Stock").
The shares of Common Stock are substantially identical, except that (i)
holders of Series A and Series K Common Stock are entitled to one vote per
share, and holders of Series B Common Stock are entitled to ten votes per
share, on all matters submitted to a vote of stockholders, (ii) the holders of
Series A Common Stock vote separately as a series to elect two directors who
are not officers or employees of the Company and are not affiliates or
associates of TCI, Comcast Corporation ("Comcast") or Cox Communications, Inc.
("Cox"), (iii) the holders of Series B Common Stock vote separately as a
series to elect five directors, of which, pursuant to a Stockholders'
Agreement, three are to be designated by TCI, one is to be designated by
Comcast and one is to be designated by Cox, and (iv) the holders of Series K
Common Stock vote separately as a series to elect one director. Each share of
Series B and Series K Common Stock is convertible at the option of the holder
into one Share of Series A Common Stock. Immediately following the completion
of this offering, TCI will own all of the Series B Common Stock and will have
approximately 72% of the combined voting power of the outstanding Common Stock
(assuming no exercise of the over-allotment option granted to the
Underwriters). Therefore, TCI will have the ability to control most
significant matters requiring stockholder approval, including the election of
a majority of the Company's directors, subject to certain supermajority
approval rights held by Comcast and Cox. See "Principal Stockholders."

---------------

SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share............ $46.125 $2.31 $43.815
- ------------------------------------------------------------------------------
Total(3)............. $115,312,500 $5,775,000 $109,537,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $550,000.
(3) The Company has granted the Underwriters an option, to purchase up to an
additional 375,000 shares of Common Stock, on the same terms as set forth
above, solely to cover over-allotments, if any. If such option is
exercised in full, the total Price to Public, Underwriting Discount and
Proceeds to Company will be $132,609,375, $6,641,250 and $125,968,125,
respectively. See "Underwriting."

---------------

The Shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York, on
or about August 18, 1998.

---------------
The activities of the Managers are being jointly coordinated.
MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER

---------------
GOLDMAN, SACHS & CO.
BT ALEX. BROWN
HAMBRECHT & QUIST

---------------
The date of this Prospectus is August 12, 1998.

<PAGE>

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") (File No. 000-22697) pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated into this Prospectus by reference: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997; (ii) the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(iii) the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998; and (iv) the description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed on June 13, 1997 under
Section 12 of the Exchange Act.

Each document filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such document (all such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents"). Any statement
contained in an Incorporated Document shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed Incorporated Document
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, including any beneficial owner, upon the written
or oral request of such person, a copy of any or all of the Incorporated
Documents, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference therein. Requests for such copies
should be directed to At Home Corporation, 425 Broadway Street, Redwood City,
California 94063, Attention: David G. Pine, Vice President, General Counsel
and Secretary (telephone: (650) 569-5000). The information relating to the
Company contained in this Prospectus does not purport to be comprehensive and
should be read together with the information contained in the Incorporated
Documents.

----------------

@Home, @Home Network, @Media, @Work and the @ball logo are trademarks of the
Company and are registered in certain jurisdictions. @Work Remote, @Work
Internet, DirectConnect, Replicate, M-Cast and KnowledgeAPI are service marks
of the Company. This Prospectus also includes trademarks of companies other
than the Company.

----------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SERIES A COMMON
STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF SERIES A
COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

----------------

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE SERIES A
COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF
REGULATION M. SEE "UNDERWRITING."

2
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information and consolidated financial statements incorporated by reference
herein. Except where otherwise indicated, the information contained in this
Prospectus assumes that the Underwriters' over-allotment option is not
exercised. Investors should carefully consider the information set forth under
the heading "Risk Factors." This Prospectus (including the documents
incorporated by reference herein) contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 (the "Securities Act")
and Section 21E of the Exchange Act. All forward-looking statements included in
this Prospectus are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward-
looking statements. Actual results could differ materially from those projected
in the forward-looking statements as a result of the risk factors set forth
herein and in the documents incorporated by reference herein.

THE COMPANY

At Home Corporation (the "Company" or "@Home") is the leading provider of
broadband Internet services over the cable television infrastructure to
consumers. By virtue of its relationships with 17 cable companies in North
America and Europe, @Home has access to approximately 58.5 million homes, which
includes exclusive access to over 50% of the households in the United States
and Canada. @Home also provides broadband Internet services to businesses over
both the cable television infrastructure and digital telecommunications lines.

The Company's primary offering, the @Home service, allows residential
subscribers to connect their personal computers via cable modems to a high-
speed Internet backbone network developed and managed by the Company. This
service enables subscribers to receive the "@Home Experience," which includes
Internet service over hybrid fiber-coaxial ("HFC") cable at peak transmission
speeds over 100 times faster than typical dial-up connections, "always on"
connections and rich multimedia programming through its broadband Internet
portal. The technology foundation of the @Home Experience is the Company's
scalable, distributed, intelligent network architecture (the "@Home Broadband
Network"), a "parallel Internet" that optimizes traffic routing, improves
security and consistency of service, and facilitates end-to-end network
management, enhancing the Company's ability to address performance bottlenecks
before they affect the user experience.

For businesses, the Company's @Work services provide a platform for Internet,
intranet and extranet connectivity solutions and networked business
applications over both cable infrastructure and digital telecommunications
lines. In order to accelerate deployment of the @Work connectivity and hosting
solutions into major U.S. metropolitan areas, the Company has established
strategic relationships with Teleport Communications Group, Inc. ("TCG"), the
country's largest competitive local exchange carrier ("CLEC"), Northpoint
Communications, Inc. ("Northpoint"), a provider of digital subscriber line
("DSL") services to businesses, and Exodus Communications, Inc. ("Exodus"), a
provider of Internet hosting and network management services. By combining the
Company's broadband distributed network architecture with cable, telephone and
technology relationships, the @Work services provide a compelling platform for
nationwide delivery of network-based business applications. The Company has
developed this platform at a low incremental cost by leveraging its existing
@Home Broadband Network investment. The Company currently provides @Work
services to more than 1,000 businesses.

3
<PAGE>

The Company has entered into distribution arrangements for the @Home service
with 15 cable companies in North America whose cable systems pass approximately
57.1 million homes--TCI, Cablevision Systems Corp. ("Cablevision"), Comcast,
Cox (together with TCI, Cablevision and Comcast, the "Principal U.S. Cable
Partners"), Rogers Cablesystems Limited ("Rogers"), Shaw Cablesystems Ltd.
("Shaw"), Bresnan Communications Company ("Bresnan"), Century Communications
Corp. ("Century"), Cogeco Cable, Inc. ("Cogeco"), Garden State Cable ("Garden
State"), Insight Communications ("Insight"), Jones Intercable, Inc. ("Jones"),
Lenfest Communications Inc. ("Lenfest"), Marcus Cable Operating Company, L.P.
("Marcus") and InterMedia Partners IV L.P. ("InterMedia") (collectively, the
"Cable Partners"). As of June 30, 1998, approximately 7.9 million of these
homes were passed by upgraded two-way HFC cable, and the Company believes that
the Cable Partners will complete the upgrade of systems passing a majority of
their homes within five years. In order to shorten time to market for cable
operators, the Company provides a turnkey solution, which includes not only a
technology platform and a national brand, but also ongoing marketing, customer
service, billing and product development support. The Company has launched the
@Home service through its Cable Partners in portions of 35 cities and
communities in the United States and Canada and has approximately 147,000
subscribers, including recently acquired Internet subscribers served by Jones
and Cogeco that are being converted to the @Home service.

As part of its strategy to expand into international markets, the Company has
entered into a joint venture agreement for the distribution of the @Home
service by EDON Beheer B.V. ("Edon") and Palet Kabelcom in the Netherlands and
has entered into an agreement in principle with ComTel Limited in the United
Kingdom. The Company has also initiated a distribution program with leading
consumer electronics retailers, including CompUSA and Computer City, to
facilitate the sale of the @Home service and cable modems compliant with Data
Over Cable Service Interface Specifications ("DOCSIS"). In addition, the
Company is working with Cable Television Laboratories, Inc. ("CableLabs"), a
research and development consortium of cable television system operators, to
develop standards for advanced digital set-top boxes to provide broadband
Internet access via television sets and to accelerate transformation of the
Internet into a mass medium. TCI has entered into a non-binding memorandum of
understanding with General Instrument Corporation ("General Instrument") for
the purchase of up to 11 million advanced digital set-top boxes and has
selected @Home to develop software and provide integration services for this
platform.

RECENT EVENTS

On June 24, 1998, TCI and AT&T Corp. ("AT&T") announced that they had signed
a definitive merger agreement pursuant to which AT&T will acquire TCI. AT&T has
announced that it currently intends to combine following the merger TCI's
cable, telecommunications and high-speed Internet businesses, including TCI's
controlling equity interest in the Company, with AT&T's consumer businesses to
form AT&T Consumer Services, which will provide a broad set of consumer
communications services, including local, long distance, wireless and
international communications, cable television and dial-up and high-speed
Internet access services under the AT&T brand name. In announcing the merger,
AT&T stated its intention to accelerate the upgrade of TCI's cable
infrastructure significantly, enabling AT&T to begin providing digital
telephony and data services to consumers by the end of 1999. AT&T and TCI
anticipate that the merger, which is subject to regulatory and stockholder
approvals, will be completed in the first half of 1999. In addition, in July
1998, AT&T acquired TCG.

The Company believes that AT&T's acquisition of TCG and of TCI's cable,
telecommunications and high-speed Internet businesses may benefit the Company
by increasing the rate at which TCI's cable facilities will be upgraded to the
two-way HFC cable necessary to carry the Company's services, by allowing the
Company to utilize the strength of AT&T's brand in marketing the @Home service
to consumers and by increasing the potential for cooperation between the
Company and TCG. However, these benefits may not be realized. See "Risk
Factors--AT&T Acquisition of TCI and TCG."

---------------

The Company was incorporated in Delaware in March 1995. The Company's
executive offices are located at 425 Broadway Street, Redwood City, California
94063. Its telephone number at that location is (650) 569-5000.

4
<PAGE>

THE OFFERING

<TABLE>
<C> <S>
Series A Common Stock offered by the Company........ 2,500,000 shares
Common Stock to be outstanding after this offering:
Series A Common Stock............................ 97,559,514 shares(1)
Series B Common Stock............................ 15,400,000 shares
Series K Common Stock............................ 8,438,830 shares
Total.......................................... 121,398,344 shares(1)
Use of proceeds..................................... For general corporate
purposes, including
working capital and
capital expenditures,
including those
associated with domestic
and international
expansion and additional
backbone capacity. See
"Use of Proceeds."
Nasdaq National Market symbol....................... ATHM
</TABLE>

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PERIOD FROM
MARCH 28, 1995 YEAR ENDED SIX MONTHS ENDED
(INCEPTION) TO DECEMBER 31, JUNE 30,
DECEMBER 31, ------------------- -------------------
1995 1996 1997 1997 1998
-------------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Revenues................ $ -- $ 676 $ 7,437 $ 1,830 $ 14,993
Total costs and expenses
before cost of
distribution agreement. 2,886 25,703 56,941 24,977 39,832
Cost of distribution
agreement.............. -- -- 172,591 -- 83,320
Net loss................ (2,756) (24,513) (219,062) (22,804) (106,146)
Basic and diluted net
loss per share(2)...... $ (0.03) $ (0.26) $ (2.12) $ (0.23) $ (0.95)
======= ======== ========= ======== =========
Shares used in per share
calculations(2)........ 95,252 96,120 103,543 98,234 112,098
======= ======== ========= ======== =========
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1998
--------------------
AS
ACTUAL ADJUSTED(3)
-------- -----------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term cash investments.... $ 91,191 $200,179
Working capital........................................... 67,737 176,725
Total assets.............................................. 149,136 258,124
Capital lease obligations, less current portion, and other
long-term liabilities.................................... 14,941 14,941
Stockholders' equity...................................... 101,427 210,415
</TABLE>
- --------
(1) Based on the number of shares outstanding as of June 30, 1998. Excludes (i)
5,252,484 shares of Series A Common Stock then issuable upon the exercise
of outstanding options with a weighted average exercise price of $20.81 per
share, (ii) 6,439,349 shares of Series A Common Stock reserved for issuance
under the Company's 1997 Equity Incentive Plan, (iii) 882,973 shares of
Series A Common Stock reserved for issuance under the Company's 1997
Employee Stock Purchase Plan and (iv) 23,489,036 shares of Series A Common
Stock issuable upon the exercise of outstanding warrants with a weighted
average exercise price of $5.85 per share.
(2) Basic and diluted net loss per share for periods prior to 1998 give pro
forma effect to the conversion, in connection with the Company's initial
public offering in July 1997, of all outstanding shares of Convertible
Preferred Stock into shares of Common Stock.
(3) Reflects the sale of the 2,500,000 Shares of Series A Common Stock offered
hereby, after deducting the underwriting discount and estimated offering
expenses. See "Use of Proceeds."

5
<PAGE>

RISK FACTORS

In evaluating the Company's business, prospective investors should carefully
consider the following risk factors in addition to the other information set
forth herein or incorporated herein by reference.

UNPROVEN BUSINESS; NO ASSURANCE OF PROFITABILITY

The Company was incorporated in March 1995, commenced operations in August
1995, and has incurred net losses from operations in each fiscal period since
its inception. As of June 30, 1998, the Company had an accumulated deficit of
$93.6 million (before the $172.6 million and $83.3 million charges recorded in
the fourth quarter of 1997 and first quarter of 1998, respectively, in
connection with certain warrants granted to Cablevision and Shaw in connection
with their distribution agreements), and an accumulated deficit of $349.5
million, including the charges relating to these agreements. In addition, the
Company currently intends to increase its capital expenditures and operating
expenses in order to expand its network to support additional expected
subscribers in existing and future markets, to support the continued roll-out
of its @Work services and to market and provide the Company's services to a
growing number of potential subscribers. As a result, the Company expects to
incur additional substantial operating and net losses for the foreseeable
future. The profit potential of the Company's business model is unproven. The
@Home service was only available in portions of 35 geographic markets as of
June 30, 1998 and may not achieve broad consumer or commercial acceptance, and
the Company's @Work services have only recently been launched. Although
approximately 1,200 organizations have agreed to utilize @Work services as of
June 30, 1998, @Work services may not achieve broad commercial acceptance and
the current rate of deployment for @Work services may not be sustained. The
Company has difficulty predicting whether the pricing models for its Internet
services will prove to be viable, whether demand for its Internet services
will materialize at the prices it expects its Cable Partners to charge (for
the @Home service) or the prices it or the Cable Partners charge (for @Work
services), or whether current or future pricing levels will be sustainable. If
such pricing levels are not achieved or sustained or if the Company's services
do not achieve or sustain broad market acceptance, the Company's business,
operating results and financial condition will be materially adversely
affected. There can be no assurance that the Company will ever achieve
favorable operating results or profitability.

SUBSCRIBER GROWTH RISKS FOR THE @HOME SERVICE

As of June 30, 1998, the Company had approximately 147,000 subscribers to
its @Home service, including recently acquired Internet subscribers served by
Jones and Cogeco that are being converted to the @Home service. The Company's
ability to increase the number of subscribers to the @Home service to achieve
its business plans and generate future revenues will be dependent on a number
of factors, many of which are beyond the Company's control. These factors
include, among others: (i) the rate at which the Company's current and future
Cable Partners upgrade their cable infrastructures; (ii) the ability of the
Company and its Cable Partners to coordinate timely and effective marketing
campaigns with the availability of such upgrades; (iii) the success of the
Cable Partners in marketing the @Home service to subscribers in their local
cable areas; (iv) the prices that the Cable Partners set for the @Home service
and its installation; (v) the speed at which the Cable Partners can complete
the installations required to initiate service for new subscribers; (vi) the
quality of customer and technical support provided by the Company and its
Cable Partners; and (vii) the quality of content on the @Home service. The
Company believes subscriber growth has been constrained, and will continue to
be constrained, by the cost and the amount of time required to install the
@Home service for each residential consumer. In addition, most of the
Company's Cable Partners are not obligated to upgrade their cable
infrastructures or market the @Home service. Moreover, the @Home service is
currently priced at a premium to many other online services, and large numbers
of subscribers may not be willing to pay a premium for the @Home service.
Because of the foregoing factors, among others, the Company's actual revenues
or the rate at which it will add new subscribers may differ from its
forecasts. The Company may not be able to increase its subscriber base in
accordance with its internal forecasts or the forecasts of industry analysts
or to a level that meets the expectations of investors. The rate at which
subscribers have increased during the first two quarters of 1998 should not be
taken as indicative of the rate at which subscribers may be expected to
increase in the future. In particular, while the Company has recently forecast
that its number of subscribers could grow to over 300,000 by the end of 1998
from approximately 147,000 subscribers at June 30, 1998, the Company may not
achieve this level of subscriber growth, particularly given the risks set
forth herein.

6
<PAGE>

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Company's quarterly operating results may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside the
Company's control. Factors that may affect the Company's quarterly operating
results attributable to its @Home service include: (i) the timing of the
Company's Cable Partners' upgrades of their cable infrastructures and roll-
outs of the @Home service; (ii) the rate at which customers subscribe to the
Company's Internet services and the prices subscribers pay for such services;
(iii) subscriber churn rates; (iv) changes in the revenue splits between the
Company and its Cable Partners; (v) the demand for Internet advertising and
electronic commerce; (vi) the effectiveness of the Cable Partners' marketing
and other operations; and (vii) potential competition with Cable Partners for
advertising revenue. Quarterly operating results attributable to the Company's
@Work services are dependent on: (i) the demand for, and level of acceptance
of, the Company's corporate Internet, intranet and extranet connectivity and
telecommuting solutions; (ii) the introduction of, demand for, and level of
acceptance of, the Company's value-added business applications; (iii) in part,
the timing of the Cable Partners' upgrades of their cable infrastructures;
(iv) the effectiveness of the Cable Partners' marketing and other operations;
(v) competitive pressures, including pricing pressure and the availability of
competing technologies, in the market for business Internet services; and (vi)
the creditworthiness of the Company's @Work customers. In addition, the
Company's quarterly operating results have been and may continue to be
adversely affected by significant charges associated with warrants issued to
current and potential Cable Partners in connection with distribution
agreements. The Company's quarterly sales and operating results are difficult
to forecast even in the short term. A significant portion of the Company's
expenses are fixed in advance based in large part on future revenue forecasts.
If revenue is below expectations in any given quarter, the adverse impact of
the shortfall on the Company's operating results may be magnified by the
Company's inability to adjust spending to compensate for the shortfall.
Moreover, the Company's Cable Partners have complete discretion regarding the
pricing of the @Home service in their territories, which could further impact
the Company's ability to generate sufficient revenue. A shortfall in actual as
compared to estimated revenue could have a material adverse effect on the
Company's business, operating results and financial condition.

DEPENDENCE ON CABLE PARTNERS TO UPGRADE TO TWO-WAY CABLE INFRASTRUCTURE
NECESSARY TO SUPPORT THE @HOME SERVICE; UNCERTAIN AVAILABILITY AND TIMING OF
UPGRADES

Transmission of the @Home service and certain @Work services over cable is
dependent on the availability of high-speed two-way HFC cable infrastructure.
However, only a small portion of existing cable plant in the United States and
in certain international markets has been upgraded to HFC cable, and even less
is capable of high-speed two-way transmission. The Company's Cable Partners
have announced and begun to implement major infrastructure investments in
order to deploy two-way HFC cable. However, cable system operators have
limited experience with these upgrades, and these investments have placed a
significant strain on the financial, managerial, operating and other resources
of the Cable Partners, most of which are already highly leveraged. Therefore,
these infrastructure investments have been, and the Company expects will
continue to be, subject to change, delay or cancellation. Although the
Company's commercial success depends on the successful and timely completion
of these infrastructure upgrades, most of the Cable Partners are under no
obligation to the Company to upgrade systems or to roll out, market or promote
the Company's services. In addition, most of the Cable Partners are not
contractually required to achieve any specific roll-out schedule. The failure
of the Cable Partners to complete these upgrades in a timely and satisfactory
manner, or at all, would prevent the Company from delivering high-performance
Internet services and would have a material adverse effect on the Company's
business, operating results and financial condition.

NO OBLIGATION OF PRINCIPAL U.S. CABLE PARTNERS TO CARRY THE COMPANY'S
SERVICES; LIMITATIONS ON THEIR EXCLUSIVITY

Although the Company's Principal U.S. Cable Partners are subject to certain
exclusivity obligations that prohibit them from obtaining high-speed (greater
than 128 Kbps) residential consumer Internet services from any source other
than the Company (the "Exclusivity Obligations"), such Principal U.S. Cable
Partners are under no affirmative obligation to carry any of the Company's
services. Such Exclusivity Obligations of the Principal

7
<PAGE>

U.S. Cable Partners expire on June 4, 2002, and may be terminated sooner under
certain circumstances. The Principal U.S. Cable Partners' Exclusivity
Obligations are limited to high-speed residential Internet services and do not
extend to various "Excluded Services" which the Company's Principal U.S. Cable
Partners may offer without the Company and which the Company may not offer
over a Principal U.S. Cable Partner's cable plant (even if part of a service
is integrated within the @Home service) without the consent of such Cable
Partner. "Excluded Services" include: (i) the provision of telephony services;
(ii) the provision of services that are primarily work-related (such as @Work
services); (iii) the provision of Internet services that do not use the
Principal U.S. Cable Partners' cable television infrastructures; (iv) the
provision of any local Internet service that does not require use of an
Internet backbone outside a single metropolitan area; (v) the provision of
services that are utilized primarily to connect students to schools, colleges
or universities; (vi) the provision of Internet telephony, Internet video
telephony or Internet video conferencing; (vii) the provision of certain
limited Internet services primarily intended for display on a television such
as some types of Internet-based digital set-top services; (viii) the provision
of certain Internet services that are primarily downstream services where the
user cannot send upstream commands in real-time; (ix) the provision of
streaming video services that include video segments longer than ten minutes
in duration; and (x) limited testing, trials and similar activities with
respect to businesses subject to the Exclusivity Obligations of less than six
months. By engaging in the Excluded Services, the Principal U.S. Cable
Partners can compete, directly or indirectly, with the activities of the
Company, including the Company's @Work services.

CONTROL BY TCI

TCI controlled approximately 72% of the voting power of the Company as of
June 30, 1998. Therefore, TCI has the ability to control most significant
matters requiring stockholder approval, including the election of a majority
of the Company's directors, subject to certain supermajority approval rights
held by Comcast and Cox. In addition, the Company's Board of Directors is
controlled by TCI, subject to certain veto rights held by Comcast and Cox.
Therefore, TCI, Comcast and Cox have the power, subject to directors'
fiduciary duties, to change the terms of distribution for the Company's
Internet services to be more favorable for the Company's Principal U.S. Cable
Partners and less favorable for the Company. See the Company's quarterly
report on Form 10-Q filed on July 28, 1998 and the exhibits to the
Registration Statement of which this Prospectus forms a part for additional
information on the rights of TCI and other Principal U.S. Cable Partners.

AT&T ACQUISITION OF TCI AND TCG

On June 24, 1998, TCI and AT&T announced that they had signed a definitive
merger agreement pursuant to which AT&T will acquire TCI. Following the
acquisition of TCI by AT&T and therefore of TCI's equity interest in the
Company, AT&T will have the power to exercise control over the Company as
described above. AT&T and TCI anticipate that the merger, which is subject to
regulatory and stockholder approvals, will be completed in the first half of
1999. In addition, in July 1998, AT&T acquired TCG. While the Company believes
that AT&T's acquisition of TCI and TCG may benefit the Company by increasing
the rate at which TCI's cable facilities will be upgraded to the two-way HFC
cable necessary to carry the Company's services, by allowing the Company to
utilize AT&T's brand in marketing the @Home service to consumers and by
increasing the potential for cooperation between the Company and TCG, these
benefits may not be realized and the TCI acquisition may not be completed.
Moreover, the Master Distribution Agreement Term Sheet under which the
Company's Principal U.S. Cable Partners have agreed to the Exclusivity
Obligations provides that upon a change of control of TCI, either Cox or
Comcast may terminate the Exclusivity Obligations as to all Principal U.S.
Cable Partners. For this purpose, a "change of control" of TCI is defined to
occur at such time as (i) any person (or group of persons acting in concert),
other than Bob Magness or John Malone or their descendants or any stockholder
that was a member of the controlling group of stockholders of TCI as of June
4, 1996, owns stock representing more than 50% of the voting power of TCI and
(ii) as a result of acquiring such ownership, at any time prior to the first
anniversary of acquiring such ownership (the "Acquisition Date"), the
directors who were members of the Board of Directors of TCI as of the
Acquisition Date, plus any additional directors not designated by the
acquiring person who are approved by a majority of the directors who were
directors on the Acquisition

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Date, no longer constitute a majority of the entire board of directors of TCI.
If AT&T completes its proposed acquisition, it will acquire a majority of the
voting power of TCI and will therefore have the power to preserve the
Exclusivity Obligations. However, if AT&T chooses not to retain a sufficient
number of the directors of TCI who were in office prior to the completion of
the merger for at least one year after the Acquisition Date, either Cox or
Comcast would have the right to terminate the exclusivity provisions
applicable to the Principal U.S. Cable Partners, which could have a material
adverse effect on the Company's business, operating results and financial
condition.

LIMITATIONS ON THE COMPANY'S ABILITY TO PROVIDE CERTAIN EXCLUDED SERVICES

The Company has agreed with its Principal U.S. Cable Partners (i) not to
directly or indirectly offer, provide, distribute, advertise, promote or
market (or carry or otherwise distribute advertising or promotions with
respect to) any streaming video transmissions that include video segments
longer than ten minutes in duration or any other Excluded Service to
residences in the Exclusive Territory (as defined below) of a Principal U.S.
Cable Partner without its prior written consent even if such Excluded Service
has been integrated with the @Home service in other areas and (ii) not to
offer or provide Internet services other than through the cable infrastructure
at data transmission speeds greater than 128 Kbps to residences in any
geographic area served by the cable systems of those Principal U.S. Cable
Partners that remain in compliance with their exclusivity provisions (the
"Exclusive Territory") until June 4, 2002 (the date upon which the Principal
U.S. Cable Partners may terminate their Exclusivity Obligations, unless sooner
terminated) or, with respect to those Principal U.S. Cable Partners which
elect to continue their Exclusivity Obligations after such date, such date as
such Principal U.S. Cable Partner ceases to comply with its Exclusivity
Obligations. No assurance can be given that the Company will have access to
the cable infrastructures of its Principal U.S. Cable Partners for Excluded
Services, and the Company must negotiate a separate agreement with each of the
Principal U.S. Cable Partners for each portion of such services that the
Company seeks to provide over their cable infrastructures. Any such failure to
obtain access, or competition from the Company's Principal U.S. Cable Partners
in providing Excluded Services, could have a material adverse effect on the
Company's business, operating results and financial condition.

POTENTIAL DISPOSITION OF CABLE SYSTEMS BY PRINCIPAL U.S. CABLE PARTNERS

The Company's agreements with its Principal U.S. Cable Partners do not
require that they maintain a specified number of cable systems, subscribers or
homes passed in order to maintain their control over and equity ownership of
the Company. Therefore, these Principal U.S. Cable Partners may dispose of a
significant amount of their cable systems without requiring that such cable
systems remain subject to any exclusivity provisions. However, to the extent
that any Principal U.S. Cable Partner disposes of more than 20% of the number
of homes passed in its service areas as of June 4, 1996 (subject to certain
exceptions) without causing such transferred homes to remain exclusive to
@Home, then such Principal U.S. Cable Partner may be required to sell a
proportionate amount of its equity interest in the Company to the other
Principal U.S. Cable Partners at the fair market value thereof. TCI has
completed the transfer or sale of certain cable systems and has announced the
proposed sale or transfer of additional cable systems and is considering
various plans and proposals that may result in the disposition of other of its
cable systems. Although TCI has informed the Company that it is attempting to
cause certain of such transferred systems to remain subject to the Exclusivity
Obligations, there can be no assurance that these efforts will be successful.
Such dispositions may have an adverse effect upon the business, operating
results and financial condition of the Company if the transferred homes do not
remain exclusive to the Company.

UNPROVEN NETWORK SCALABILITY, SPEED AND SECURITY

Due to the limited deployment of the Company's services, the ability of the
@Home Broadband Network to connect and manage a substantial number of online
subscribers at high transmission speeds is as yet unknown, and the Company
faces risks related to the @Home Broadband Network's ability to be scaled up
to its expected subscriber levels while maintaining superior performance. The
@Home Broadband Network may be unable to achieve or maintain a high speed of
data transmission, especially as the number of the Company's subscribers
grows. The Company's failure to achieve or maintain high-speed data
transmission would significantly reduce consumer demand for its services and
have a material adverse effect on its business, operating results and

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financial condition. In addition, while the Company has taken steps to prevent
users from sharing files via the @Home service and to protect against "email
spamming," public concerns about security, privacy and reliability of the
cable network, or actual problems with the security, privacy or reliability of
the Company's network, may inhibit the acceptance of the Company's Internet
services.

MANAGEMENT OF EXPANDED OPERATIONS; DEPENDENCE ON KEY PERSONNEL

The Company may not be able to successfully manage any future periods of
rapid growth or expansion, which could be expected to place a significant
strain on the Company's managerial, operating, financial and other resources.
From time to time, the Company and its Cable Partners have had difficulty
managing network operations and expansion of backbone capacity and providing
adequate customer service or efficient provisioning of new subscribers. A
prolonged failure to perform these functions successfully would have a
material adverse effect on subscriber growth and retention and would
materially adversely affect the Company's business, operating results and
financial condition. The Company is highly dependent upon the efforts of its
senior management team, and the Company's future performance will depend, in
part, upon the ability of senior management to manage growth effectively,
which will require the Company: (i) to implement additional management
information systems capabilities; (ii) to develop further its operating,
administrative, financial and accounting systems and controls; (iii) to
maintain close coordination among engineering, accounting, finance, marketing,
sales and operations; and (iv) to hire and train additional technical and
marketing personnel. There is intense competition for senior management,
technical and marketing personnel in the areas of the Company's activities.
The loss of the services of any of the Company's senior management team or the
failure to attract and retain additional key employees could have a material
adverse effect on the Company's business, operating results and financial
condition. The Company maintains no key-person life insurance.

DEPENDENCE ON TWO-WAY CABLE MODEMS; NEW INDUSTRY STANDARD

Each of the Company's subscribers currently must obtain a cable modem from a
Cable Partner to access the @Home service. The North American cable industry
has recently adopted a set of interface specifications known as DOCSIS for
hardware and software to support the delivery of data services over the cable
infrastructure utilizing interoperable cable modems. The Company believes that
these specifications, together with its development agreement with Intel
Corporation ("Intel") relating to "plug and play" DOCSIS modems, will
facilitate the growth of the cable modem industry and the availability of
lower cost, interoperable cable modems through retail channels. However,
certain of the Company's Cable Partners have chosen to slow the deployment of
the @Home service until the commercial availability of DOCSIS-compliant cable
modems. The Company's subscriber growth could be constrained and the Company's
business, operating results and financial condition could be materially
adversely affected to the extent the Cable Partners choose to slow the
deployment of the @Home service further, as a result of the timing of
commercial availability of DOCSIS-compliant cable modems or otherwise. Cable
modems that are DOCSIS-compliant are not currently expected to be generally
commercially available before the fourth quarter of 1998 or to be available in
significant quantities until 1999. Although multiple vendors are expected to
supply DOCSIS-compliant cable modems and their constituent components, any
Cable Partner's reliance on a single provider of such modems or components
could cause that Cable Partner to be unable to generate expected subscriber
growth for the @Home service in the event such supplier does not provide the
Cable Partner with a sufficient quantity of DOCSIS-complaint modems to meet
the Cable Partner's requirements.

COMPETITION

The markets for consumer and business Internet services and online content
are extremely competitive, and the Company expects that competition will
intensify in the future. The Company's most direct competitors in these
markets are unaffiliated cable companies, national long-distance carriers,
local exchange carriers, Internet service providers ("ISPs"), online service
providers ("OSPs") and Internet content aggregators.

The Company's competitors in the cable-based services market are those
companies that have developed their own cable-based services and market those
services to unaffiliated cable system operators that are planning

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to deploy data services. In particular, Time Warner Inc. ("Time Warner") and
MediaOne Group ("MediaOne") have deployed high-speed Internet access services
over their existing local HFC cable networks through their cable-based
Internet service, Road Runner, which features a variety of proprietary content
from Time Warner Publications. Time Warner's substantial libraries of
multimedia content could provide Road Runner with a significant competitive
advantage. In June 1998, Microsoft Corporation ("Microsoft") and Compaq
Computer Corporation ("Compaq") each invested $212.5 million in Road Runner
and announced that Microsoft will provide software for the Road Runner service
and that Compaq will produce cable-ready personal computers to be used with
the service. Time Warner and MediaOne plan to market the Road Runner service
through their own cable systems as well as to other cable system operators
nationwide. Although the Company does not presently compete with the Road
Runner services for subscribers because their services are offered over
different cable systems than those that carry the @Home service, the Company
does compete with the Road Runner service in seeking to establish distribution
arrangements with cable system operators. Furthermore, at such time as the
Company's existing Cable Partners cease to be subject to the Exclusivity
Obligations, the Company may compete with Road Runner and potentially other
Internet service providers for distribution over the cable systems of the
Company's Cable Partners. In addition, other cable system operators, including
Adelphia Communications Corporation and Bell South Corporation, have launched
their own cable-based Internet services that could compete with the Company's
services.

Long distance inter-exchange carriers, such as AT&T, MCI Communications
Corporation ("MCI"), Sprint Corporation ("Sprint") and WorldCom, Inc.
("WorldCom"), have deployed large-scale Internet access networks and sell
connectivity to business and residential customers. The regional Bell
operating companies ("RBOCs") and other local exchange carriers have also
entered this field and are providing price competitive services. Many such
carriers are offering diversified packages of telecommunications services,
including Internet access, to residential customers and could bundle such
services together, which could put the Company at a competitive disadvantage.
Many of these competitors are offering (or may soon offer) technologies that
will compete with some or all of the Company's high-speed data service
offerings. Such technologies include Integrated Services Digital Network
("ISDN") and Asymmetric Digital Subscriber Line ("ADSL"). In January 1998,
Compaq, Intel and Microsoft, other technology companies and numerous
telecommunications providers announced an initiative to develop a simplified
version of ADSL, referred to as "ADSL Lite," which reduces the complexity and
expense of installing Internet services based on ADSL. While commercial tests
of this simplified version of ADSL are not expected until the end of 1998,
this initiative may accelerate the deployment of ADSL services. Widespread
commercial acceptance of ADSL technologies could significantly reduce the
potential subscriber base for the Company's Internet services, which could
have a material adverse effect on the Company's business, operating results
and financial condition.

The Company could also face substantial competition from its strategic
partners. In February 1997, TCG acquired CERFnet Services, Inc. ("CERFnet"),
an Internet service provider for business customers that competes with the
Company's @Work service. The Company's @Work business depends to a significant
extent on its agreement with TCG for local access telecommunications services.
If TCG ceases to cooperate with the Company, there could be an adverse effect
on the Company's @Work business. In July 1998, AT&T acquired TCG and in June
1998, AT&T announced an agreement to acquire TCI, including TCI's controlling
interest in the Company. AT&T also operates a consumer Internet service known
as AT&T WorldNet. Now that it owns TCG, and if it completes its acquisition of
TCI, AT&T could take actions that benefit CERFnet, WorldNet or other services
of AT&T to the detriment of the Company. Moreover, as discussed above, AT&T's
acquisition of TCI could result in termination of the Exclusivity Obligations
of the Company's Principal U.S. Cable Partners. Any of these actions could
have a material adverse effect on the Company's business, operating results
and financial condition.

The Company also competes to some extent with Internet service providers
which provide basic Internet access to residential consumers and businesses,
generally using existing telephone network infrastructures. While not offering
the advantages of broadband access, these services are widely available and
inexpensive. Barriers to entry are low, resulting in a highly competitive and
fragmented market. In addition, the Company competes with

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online service providers such as America Online, Inc. ("America Online") that
provide, over the Internet and on proprietary online services, content and
applications ranging from news and sports to consumer videoconferencing. These
services are designed for broad consumer access over telecommunications-based
transmission media, which enables the provision of data services to the large
group of consumers who have personal computers with modems. In addition, OSPs
provide basic Internet connectivity, ease of use and consistency of
environment. In addition to developing their own content or supporting
proprietary third-party content developers, online services often establish
relationships with traditional broadcast and print media outlets to bundle
their content into the service. Finally, the Company competes with content
aggregators and Internet portals that seek to capture audience flow by
providing ease-of-use and offering content that appeals to a broad audience.
Leading companies in this area include America Online, Yahoo! Inc. and Excite,
Inc. In this market, competition occurs in acquiring both content providers
and subscribers. The principal bases of competition in attracting content
providers include quality of demographics, audience size, cost-effectiveness
of the medium and ability to create differentiated experiences using
aggregator tools. The principal bases of competition in attracting subscribers
include richness and variety of content and ease of access to the desired
content. Many OSPs, such as America Online, have the advantage of large
customer bases, industry experience, many content partnerships and significant
resources.

Many of the Company's competitors and potential competitors have
substantially greater financial, technical and marketing resources, larger
subscriber bases, longer operating histories, greater name recognition and
more established relationships with advertisers and content and application
providers than the Company. Such competitors may be able to undertake more
extensive marketing campaigns, adopt more aggressive pricing policies and
devote substantially more resources to developing Internet services or online
content than the Company. The Company may not be able to compete successfully
against current or future competitors, and competitive pressures faced by the
Company could materially adversely affect the Company's business, operating
results or financial condition. Further, as a strategic response to changes in
the competitive environment, the Company and its Cable Partners may make
certain pricing, service or marketing decisions or enter into acquisitions or
new ventures that could have a material adverse effect on the Company's
business, operating results or financial condition.

RISKS ASSOCIATED WITH JOINT DEVELOPMENT EFFORT

The Company recently entered into a Memorandum of Understanding with TCI's
National Digital Television Center ("NDTC") to develop software and provide
integration services for TCI's next generation advanced digital set-top
devices. Such arrangement is subject to negotiation of a definitive agreement
and other conditions, and there can be no assurance that such transactions
will be consummated. Although the Company believes this relationship could
enable the Company to expand its product line and market the @Home service to
a broader audience of consumers who do not regularly use a personal computer,
the Memorandum of Understanding does not require that TCI deploy the @Home
service on such set-top devices, and the Company cannot predict when such set-
top devices will become commercially available. In addition to the
technological, financial and infrastructure challenges TCI faces in deploying
the new set-top devices, the success of this development effort is subject to:
(i) the technological and operational challenges of providing and supporting
email and other Internet services to set-top device users; (ii) competition
from alternative Internet service providers and deployment technologies; and
(iii) the degree to which consumers desire Internet services, including email,
on their televisions.

RISK OF SYSTEM FAILURE

The Company's operations are dependent upon its ability to support its
highly complex network infrastructure and avoid damage from fires,
earthquakes, floods, power losses, telecommunications failures and similar
events. The occurrence of a natural disaster or other unanticipated problem at
the Company's Network Operations Center ("NOC") or at a number of the
Company's regional data centers ("RDCs") could cause interruptions in the
services provided by the Company. Additionally, failure of the Company's Cable
Partners or companies from which the Company obtains data transport services
to provide the data communications capacity

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required by the Company, as a result of natural disaster, operational
disruption or any other reason, could cause interruptions in the services
provided by the Company. Any damage or failure that causes interruptions in
the Company's operations could have a material adverse effect on the Company's
business, operating results and financial condition.

RISKS OF TECHNOLOGICAL CHANGE

The markets for consumer and business Internet access services and online
content are characterized by rapid technological developments, frequent new
product introductions and evolving industry standards. The emerging nature of
these products and services and their rapid evolution will require that the
Company continually improve the performance, features and reliability of its
network, Internet content and consumer and business services, particularly in
response to competitive offerings. The Company may not be successful in
responding quickly, cost effectively and sufficiently to these developments.
There may be a time-limited market opportunity for the Company's cable-based
consumer and business Internet services, and the Company may not be successful
in achieving widespread acceptance of its services before competitors offer
products and services with speed and performance similar to the Company's
current offerings. In addition, the widespread adoption of new Internet or
telecommuting technologies or standards, cable-based or otherwise, could
require substantial expenditures by the Company to modify or adapt its
network, products and services and could fundamentally affect the character,
viability and frequency of Internet-based advertising, either of which could
have a material adverse effect on the Company's business, operating results
and financial condition. In addition, new Internet or telecommuting services
or enhancements offered by the Company may contain design flaws or other
defects that could have a material adverse effect on the Company's business,
operating results and financial condition.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

A key component of the Company's strategy is expansion into international
markets. To date, the Company has developed relationships only with United
States, Canadian and Dutch cable system operators and has only recently
entered into agreements in principle with a cable system operator in the
United Kingdom. The Company has extremely limited experience in developing
localized versions of its products and services and in developing
relationships with international cable system operators. The Company may not
be successful in expanding its product and service offerings into foreign
markets. In addition to the uncertainty regarding the Company's ability to
generate revenues from foreign operations and expand its international
presence, there are certain risks inherent in doing business on an
international level, such as: (i) regulatory requirements (including the
regulation of Internet access); (ii) legal uncertainty regarding liability for
information retrieved and replicated in foreign jurisdictions; (iii) export
and import restrictions; (iv) tariffs and other trade barriers; (v)
difficulties in staffing and managing foreign operations; (vi) longer payment
cycles; (vii) problems in collecting accounts receivable; (viii) political
instability; (ix) fluctuations in currency exchange rates; (x) seasonal
reductions in business activity during the summer months in Europe and certain
other parts of the world; and (xi) potentially adverse tax consequences, which
could adversely affect the success of the Company's future international
operations. One or more of such factors could have a material adverse effect
on the Company's future international operations and, consequently, on the
Company's business, operating results and financial condition.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

Although the Company's services are not directly subject to current
regulations of the Federal Communication Commission (the "FCC") or any other
federal or state communications regulatory agency, changes in the regulatory
environment relating to the Internet connectivity market, including regulatory
changes that, directly or indirectly, affect telecommunications costs, limit
usage of subscriber-related information or increase the likelihood or scope of
competition from the regional Bell operating companies ("RBOCs") or other
telecommunications companies, could affect the Company's pricing and/or
ability to market its services successfully. For example, regulation of cable
television rates may affect the speed at which cable operators that have
agreed or will agree in the future to provide the @Home service will be able
to upgrade their cable systems as necessary to carry the Company's services.
Similarly, enactment of proposed privacy legislation currently pending in
Congress, which would restrict the use of subscriber information by
interactive computer services for marketing and other purposes, could
adversely affect the marketing of the Company's services as well as its
revenue from advertising.

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The Cable Partners in the United States have advised the Company that their
local cable operators typically have elected to classify the provision of all
or some of the @Home services as "additional cable services" under their
respective local franchise agreements, and to pay franchise fees in accordance
therewith. Local franchise authorities may attempt to subject cable systems to
higher or other franchise fees or taxes or otherwise seek to require cable
operators to obtain additional franchises, in connection with their
distribution of the @Home service. There are thousands of franchise
authorities, and thus it will be difficult or impossible for the Company or
such cable operators to operate under a unified set of franchise requirements.
Legislation has been introduced in Congress that if enacted would impose a
moratorium limiting the ability of state and local governments to impose taxes
on Internet services pending the formulation and submission to Congress by the
President of recommendations concerning appropriate parameters for state and
local taxation of such services. However, state and local authorities have
expressed strong opposition to such legislation, and there remains the
possibility that the @Home services may be subject to potentially burdensome
taxes or other assessments in a multitude of state and local jurisdictions.

It is also possible that governmental authorities may attempt to classify
the Company in some other manner (e.g., as a common carrier-type service or
information service) and impose additional potentially burdensome regulatory
requirements on the Company, the Cable Partners or other cable operators
carrying the Company's services. In the event that the FCC or another
governmental agency were to classify the cable system operators as "common
carriers" of Internet services, or cable system operators were to seek such
classification as a means of protecting themselves against liabilities, the
Company's rights as the exclusive residential high-speed ISP over the systems
of certain of its Cable Partners could be lost. In addition, if the Company or
its Cable Partners in the United States were classified as common carriers,
they could be subject to government-regulated tariff schedules for the amounts
they could charge for their services. Rogers and Shaw have informed the
Company that, due to certain Canadian regulations, they are required to
provide access to their respective networks to third-party ISPs. Although no
third party currently uses Rogers' or Shaw's networks for purposes of offering
Internet services, these Canadian regulations preclude the Company from having
an exclusive contractual right to access to these networks.

In addition, the FCC is currently considering requests by Bell Atlantic
Corporation, Ameritech Corporation, U S WEST and Pacific Bell for relief
pursuant to section 706 of the 1996 Telecommunications Act ("1996 Act") from
various restrictions and regulatory requirements that, according to these
companies, inhibit their provision of Internet services. These petitions seek
authority to provide high-speed, packet-switched data services, including
Internet access and related services, without regard to Local Access and
Transport Area ("LATA") boundaries and free from otherwise applicable access,
unbundling and resale obligations and certain other regulatory requirements.
The FCC also is considering a separate request to provide all incumbent local
exchange carriers ("ILECs") with significant relief from existing access,
unbundling, pricing, and cost recovery rules and policies, in order to
encourage the deployment and operations by the ILECs of high-capacity, packet-
switched networks and other advanced telecommunications facilities and related
services, including Internet access services. Section 706 of the 1996 Act also
directs the FCC to initiate, no later than August 8, 1998, an inquiry into the
deployment of advanced telecommunications capability and to take immediate
action to accelerate such deployment if necessary. The FCC may use the
occasion of this inquiry to examine the feasibility and lawfulness of common
carrier regulation for cable systems, to provide some measure of the
regulatory relief for high speed data services requested by the RBOCs and
ILECs, or both.

POTENTIAL LIABILITY FOR DEFAMATORY OR INDECENT CONTENT

The law relating to the liability of ISPs and OSPs for information carried
on or disseminated through their networks is currently unsettled. It is
possible that claims could be made against ISPs and OSPs under both United
States and foreign law for defamation, negligence, copyright or trademark
infringement, or other theories based on the nature and content of the
materials disseminated through their networks. Several private lawsuits
seeking to impose such liability upon ISPs and OSPs are currently pending. In
addition, legislation has been proposed that imposes liability for or
prohibits the transmission over the Internet of certain types of information.
The imposition upon ISPs or OSPs of potential liability for information
carried on or disseminated through their

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systems could require the Company to implement measures to reduce its exposure
to such liability, which may require the expenditure of substantial resources,
or to discontinue certain service or product offerings. The increased
attention focused upon liability issues as a result of these lawsuits and
legislative proposals could impact the growth of Internet use. Furthermore,
certain foreign governments, such as Germany, have enforced laws and
regulations related to content distributed over the Internet that are more
strict than those currently in place in the United States. There can be no
assurance that one or more of these factors will not have a material adverse
effect on the Company's business, operating results and financial condition.

DILUTION FROM CERTAIN TRANSACTIONS

As a result of a transaction effective October 2, 1997, whereby Cablevision
became a party to the agreement between the Company and TCI, Comcast and Cox
to distribute the @Home service on substantially the same terms and conditions
as TCI, Comcast and Cox, Cablevision was granted warrants to purchase up to
10,946,936 shares of the Company's Series A Common Stock at an exercise price
of $0.50 per share under certain conditions (the "Cablevision Agreement"). A
portion of the warrants issued to Cablevision (the "Contingent Warrants") do
not become exercisable unless certain cable systems are transferred by TCI to
Cablevision. To the extent that Cablevision exercises its warrants, the
Company's stockholders will experience substantial dilution. The Company
recorded a non-cash charge in the fourth quarter of 1997 of $172.6 million,
which represents the cost of the Cablevision Agreement, based on the fair
value of the warrants that were not Contingent Warrants. Additional charges to
operations of approximately $83.3 million were recorded in the first quarter
of 1998 in connection with a portion of the Contingent Warrants becoming
exercisable as a result of the transfer of certain cable systems owned by TCI
to Cablevision on March 4, 1998. Additional charges to operations may be
recorded in connection with the remaining Contingent Warrants to purchase
715,638 shares of Series A Common Stock becoming exercisable if and when
certain other cable systems owned by TCI are transferred to Cablevision. In
addition, in March 1998, the Company issued performance-based warrants to
Rogers and Shaw to purchase up to 5,000,000 shares of Series A Common Stock at
an exercise price of $10.50 per share. These warrants will become exercisable
when, as and if Rogers and Shaw meet certain performance milestones for homes
passed, subscribers and revenue. The Company has also issued warrants to
purchase an aggregate of 5,272,100 shares of Series A Common Stock at an
exercise price of $10.50 per share to certain new Cable Partners in connection
with distribution agreements entered into in the second quarter of 1998. These
warrants will become exercisable based on the number of homes that those Cable
Partners upgrade to two-way or, for certain homes, one-way HFC cable and that
are capable of accessing the @Home service. To the extent that such Cable
Partners exercise their warrants, the Company's stockholders would experience
additional dilution. The Company also may issue additional stock, or warrants
to purchase the same, at less than fair market value in connection with its
efforts to expand its distribution of the @Home service to other cable
operators.

POSSIBLE VOLATILITY OF STOCK PRICE

The stock market has from time to time experienced significant price and
volume fluctuations. In addition, the market price of the shares of the
Company's Series A Common Stock, similar to the market prices of other
Internet companies, has been and is likely to be highly volatile. Factors such
as fluctuations in the Company's operating results, announcements of
technological innovations or new products by the Company or its competitors,
regulatory actions, market rumors, acquisitions in the telecommunications or
cable industries and general market conditions may have a significant effect
on the market price of the Company's Series A Common Stock.

YEAR 2000 RISKS

The Company continues to review its internal management information systems
as well as third parties' systems in order to assess the possible impact of
year 2000 issues on its business. The Company expects the result of this
review and assessment will enable it to develop plans for any necessary
changes, including the testing and implementation of these changes, and to
make estimates of the likely time and costs of any required changes. To the
extent that such modifications need to be made, the Company will endeavor to
make them on a timely basis and does not believe that the cost of such
modifications will have a material effect on the Company's operating results,
due to its relatively short operating history and small number of installed
computer systems.

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USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of
Series A Common Stock offered by the Company hereby are approximately $109.0
million (approximately $125.4 million if the Underwriters' over-allotment
option is exercised in full), after deducting the underwriting discount and
estimated offering expenses payable by the Company. The Company intends to use
the net proceeds for general corporate purposes, including working capital and
capital expenditures, including those associated with domestic and
international expansion and additional backbone capacity. A portion of the net
proceeds may also be used to acquire or invest in complementary businesses or
products or to obtain the right to use complementary technologies. The Company
has no current plans, agreements or commitments with respect to any such
acquisition or investment, and the Company is not currently engaged in any
negotiations with respect to any such transaction. Pending such uses, the net
proceeds of this offering will be invested in short-term, interest-bearing,
investment grade securities.

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its capital
stock and does not anticipate paying any cash dividends on its capital stock
in the foreseeable future.

PRICE RANGE OF SERIES A COMMON STOCK

The Company's Series A Common Stock has been traded on the Nasdaq National
Market under the symbol "ATHM" since July 11, 1997, the date of the Company's
initial public offering. The following table sets forth, for the periods
indicated, the high and low sales prices for the Series A Common Stock as
reported by the Nasdaq National Market:

<TABLE>
<CAPTION>
HIGH LOW
--------- -------
<S> <C> <C>
FISCAL YEAR ENDED DECEMBER 31, 1997:
Third Quarter (from July 11, 1997).......................... $25 1/2 $16 5/8
Fourth Quarter.............................................. 30 5/8 18
FISCAL YEAR ENDING DECEMBER 31, 1998:
First Quarter............................................... $38 1/8 $20 1/2
Second Quarter.............................................. 57 1/4 29 3/4
Third Quarter (through August 12, 1998)..................... 54 15/16 39 1/2
</TABLE>

On August 12, 1998, the last reported sale price for the Series A Common
Stock on the Nasdaq National Market was $46 1/8 per share. As of August 12,
1998, the Company estimates that there were approximately 650 holders of
record of the Series A Common Stock.

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BUSINESS

At Home Corporation is the leading provider of broadband Internet services
over the cable television infrastructure to consumers. By virtue of its
relationships with 17 cable companies in North America and Europe, @Home has
access to approximately 58.5 million homes, which includes exclusive access to
over 50% of the households in the United States and Canada. @Home also
provides broadband Internet services to businesses over both the cable
television infrastructure and digital telecommunications lines.

The Company's primary offering, the @Home service, allows residential
subscribers to connect their personal computers via cable modems to a high-
speed Internet backbone network developed and managed by the Company. This
service enables subscribers to receive the "@Home Experience," which includes
Internet service over HFC cable at peak transmission speeds over 100 times
faster than typical dial-up connections, "always on" connection and rich
multimedia programming through its broadband Internet portal. The technology
foundation of the @Home Experience is the Company's scalable, distributed,
intelligent network architecture (the "@Home Broadband Network"), a "parallel
Internet" that optimizes traffic routing, improves security and consistency of
service, and facilitates end-to-end network management, enhancing the
Company's ability to address performance bottlenecks before they affect the
user experience.

The Company's @Media group has established the @Home launch screen (the
"@Home Portal") as the leading broadband Internet portal, providing a gateway
to compelling multimedia and electronic commerce offerings on the Internet. To
date, the @Home Experience has generated greater page views per subscriber
than are reported by the leading narrowband Internet portal companies. The
@Media group works with content providers to facilitate the creation of rich
multimedia broadband content delivered through the @Home Portal and to
facilitate online transactions and services for @Home subscribers. Multimedia
content offerings include on-demand video clips from partners such as
Bloomberg, CNN Interactive and the National Basketball Association, on-demand
music and CD previews provided by the Company's Tune-In service and low-
latency multiplayer gaming from SegaSoft. Electronic commerce partners include
Amazon.com, the leading online bookseller, SoftwareNow.com, an online software
distributor, and Travelocity, a leading online travel site. The @Media group
also sells advertising on a CPM basis as well as on a sponsorship basis. The
Company had over 30 advertisers in the quarter ended June 30, 1998, including
Clorox, Disney, General Motors, Home Box Office, Kraft, MGM, Procter & Gamble,
Standard & Poor's, Toyota and Unilever. For businesses, the Company's @Work
services provide a platform for Internet, intranet and extranet connectivity
solutions and networked business applications over both cable infrastructure
and digital telecommunications lines. In order to accelerate deployment of the
@Work connectivity and hosting solutions into major U.S. metropolitan areas,
the Company has established strategic relationships with TCG, the country's
largest CLEC, Northpoint, a provider of DSL services to businesses, and
Exodus, a provider of Internet hosting and network management services. By
combining the Company's broadband distributed network architecture with cable,
telephone and technology relationships, the @Work services provide a
compelling platform for nationwide delivery of network-based business
applications. The Company has developed this platform at a low incremental
cost by leveraging its existing @Home Broadband Network investment. The
Company currently provides @Work services to more than 1,000 businesses.

The Company has entered into distribution arrangements for the @Home service
with 15 cable companies in North America whose cable systems pass
approximately 57.1 million homes--TCI, Cablevision, Comcast, Cox, Rogers,
Shaw, Bresnan, Century, Cogeco, Garden State, Insight, Jones, Lenfest, Marcus
and InterMedia. As of June 30, 1998, approximately 7.9 million of these homes
were passed by upgraded two-way HFC cable, and the Company believes that the
Cable Partners will complete the upgrade of systems passing a majority of
their homes within five years. In order to shorten time to market for cable
operators, the Company provides a turnkey solution, which includes not only a
technology platform and a national brand, but also ongoing marketing, customer
service, billing and product development support. The Company has launched the
@Home service through its Cable Partners in portions of 35 cities and
communities in the United States and Canada and has approximately 147,000
subscribers, including recently acquired Internet subscribers served by Jones
and Cogeco that are being converted to the @Home service.

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<PAGE>

As part of its strategy to expand into international markets, the Company
has entered into agreements for the distribution of the @Home service by
CasTel and Palet Kabelcom in the Netherlands and has entered into an agreement
in principle with ComTel Limited in the United Kingdom. The Company has also
initiated a distribution program with leading consumer electronics retailers,
including CompUSA and Computer City, to facilitate the sale of the @Home
service and cable modems compliant with DOCSIS. In addition, the Company is
working with CableLabs to develop standards for advanced digital set-top boxes
to provide broadband Internet access via television sets and to accelerate
transformation of the Internet into a mass medium. TCI has entered into a non-
binding memorandum of understanding with General Instrument for the purchase
of up to 11 million advanced digital set-top boxes and has selected @Home to
develop software and provide integration services for this platform.

RECENT EVENTS

On June 24, 1998, TCI and AT&T announced that they had signed a definitive
merger agreement pursuant to which AT&T will acquire TCI. AT&T has announced
that it currently intends to combine following the merger TCI's cable,
telecommunications and high-speed Internet businesses, including TCI's
controlling equity interest in the Company with AT&T's consumer businesses to
form AT&T Consumer Services, which will provide a broad set of consumer
communications services, including local, long distance, wireless and
international communications, cable television and dial-up and high-speed
Internet access services under the AT&T brand name. In announcing the merger,
AT&T stated its intention to accelerate the upgrade of TCI's cable
infrastructure significantly, enabling AT&T to begin providing digital
telephony and data services to consumers by the end of 1999. AT&T and TCI
anticipate that the merger, which is subject to regulatory and stockholder
approvals, will be completed in the first half of 1999. In addition, in July
1998, AT&T acquired TCG.

PRODUCTS AND SERVICES

@Home Service

The Company's primary offering is the @Home service, a comprehensive
broadband Internet solution that leverages the two-way HFC cable television
infrastructure and the Company's technological and programming capabilities to
provide the @Home Experience, which the Company believes is the most
compelling consumer Internet experience currently available. By connecting via
a cable modem to the @Home Broadband Network through the local cable
infrastructure, subscribers to the @Home service can achieve peak data
transmission speeds of 2 to 5 Mbps (2,000 Kbps to 5,000 Kbps), which is over
100 times faster than the peak data transmission speed of a 28.8 Kbps dial-up
modem. This high bandwidth enables compelling multimedia applications,
broadband advertising, online commerce and multiplayer games. The @Home
service offering also includes standard ISP functionality, including Web page
hosting for subscribers, and the ability to create and manage multiple email
accounts. The Company also offers the ability to share Internet access across
multiple PCs in the home for an additional monthly fee. A critical
differentiation of the @Home service is that the two-way cable infrastructure
is "always on," providing instantaneous access to the Internet and eliminating
the need for a time consuming dial-up procedure using the telephone network.

The Company's @Media group has established the @Home launch screen as the
leading broadband Internet portal, providing a gateway to compelling
multimedia and electronic commerce offerings on the Internet. The @Home Portal
provides the user with access to an array of multimedia content "Channels,"
powerful tools and

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<PAGE>

Web-based applications designed specifically to take advantage of the
Company's broadband network architecture. The Company believes that the @Home
Portal broadens the appeal of online services beyond technology enthusiasts to
the mass market by facilitating access to broadband content (such as animated
graphics, near-CD-quality audio and video clips) and stimulating persistent
usage with timely, dynamic, highly sought-after data streams, as well as by
simplifying navigation, increasing the subscriber's knowledge of Internet
resources. The @Home Portal is organized around a series of "Channels," which
are defined by both topical subjects (such as news, technology, sports or
popular culture) and audiences (such as children, game players or shoppers),
and which present timely and compelling editorial content. Through the @Home
Portal, the Company generates and directs regular audience traffic to @Media
and content providers' offerings. The @Home Portal includes a variety of tools
to obtain information quickly and easily. For example, the "How Do I" section,
which is one click from the @Home Portal, provides users with a variety of
step-by-step solutions to such tasks as making plane reservations and checking
movie schedules. The service also includes a "Member Services" area where the
customer can manage accounts and services via a simple graphical interface.
The Company has also recently launched the @Home Assistant, a proprietary
@Home software application, which exploits @Home's "always-on" connection to
provide "out of browser" one-click access to personalized stock prices, news
feeds, local weather, sports scores and dining information. The @Home
Experience also permits @Home subscribers to access online services, purchase
software and engage in multiplayer gaming and interactive shopping.

The @Home service is currently offered to consumers in the United States for
flat monthly fees generally ranging from $35 to $55, and typically includes a
cable modem provided by the Cable Partner. Installation of the @Home service
is provided by the Cable Partner at prices generally ranging from $75 to $175.
Upon installation, each new subscriber's personal computer is configured for
the @Home Experience with @Home client software, which provides access to the
@Home Portal. In addition to making the Internet considerably easier to access
for consumers, the @Home client software offers advertisers and content
providers a rich and consistent client environment for delivering multimedia
advertising, content and applications. The @Home client software includes a
customized browser from Netscape Communications Corporation ("Netscape") and
other high-performance and multimedia software optimized for the @Home
Experience. The Company also provides a customized version of Microsoft's
Internet Explorer 4.0, thereby giving subscribers a choice of browsers. The
Company has also initiated a distribution program with leading consumer
electronic retailers, including CompUSA and Computer City, to facilitate the
sale of the @Home service and DOCSIS-compliant cable modems.

The Company is currently developing the capability to deliver the @Home
Experience to televisions via set-top boxes connected to the cable
infrastructure, and thereby meet the needs of a broader market of non-computer
users. According to IDC, there are approximately 282 million television sets
compared to approximately 66 million personal computers in United States
households. In February 1998, the Company entered into a memorandum of
understanding with TCI's NDTC pursuant to which the Company agreed to develop
software and provide integration services for TCI's advanced set-top devices
that will deliver both digital television and Internet data services. The
memorandum of understanding contemplates that @Home will provide Internet
connectivity for these devices, supply email accounts via geographically
dispersed mail servers and provide overall system management for TCI's email
services. @Home also would work with NDTC on the overall software integration
related to TCI's advanced digital set-top devices. Completion of the
transactions contemplated by the memorandum of understanding is subject to
negotiation of a definitive agreement and other conditions, and there can be
no assurance such transactions will be consummated. See "Risk Factors--Risks
Associated with Joint Development Efforts."

@Work Services

For businesses, @Work services provide end-to-end managed connectivity for
Internet, intranet and extranet solutions over the cable infrastructure and
digital telecommunications lines. In addition, @Work is developing a next
generation platform to support networked business applications and other
value-added data networking solutions such as server hosting and electronic
commerce hosting. In order to accelerate deployment of @Work's connectivity
solutions in metropolitan areas throughout the United States, the Company has
established a

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<PAGE>

strategic relationship with TCG, the country's largest CLEC, to provide
targeted co-location and local telephone circuits for infrastructure and
subscriber connectivity. The Company currently offers two services: @Work
Internet and @Work Remote.

@Work Internet. The @Work Internet service delivers dedicated, high-speed,
end-to-end managed Internet connectivity to commercial enterprises over
digital telecommunications lines and HFC cable. The @Work Internet service
offers dedicated access options at peak data transmission speeds ranging from
56 Kbps to 10 Mbps. These solutions are priced competitively vis-a-vis
existing alternatives. As of June 30, 1998, the telco-based @Work Internet
service was available in 21 metropolitan markets including Boston, Chicago,
Denver, Detroit, Los Angeles, New York, Orange County, Philadelphia, Phoenix,
San Diego, San Francisco, Seattle, Vancouver and Washington, D.C. At June 30,
1998, the Company was providing @Work Internet services over digital
telecommunications lines to over 800 corporate customers.

In February 1998, the Company and Cox announced the availability of the
@Work Internet service via Cox's HFC cable infrastructure in Orange County,
Phoenix, and San Diego. Businesses in these markets that are passed by two-way
HFC cable can connect directly to the @Work Internet service. The @Work
Internet HFC service is a shared bandwidth solution that offers peak data
transmission speeds of 2 to 5 Mbps downstream using the @Home Broadband
Network. At June 30, 1998, the Company was providing @Work Internet services
over HFC to over 200 corporate customers.

@Work Remote. The @Work Remote Service is the Company's first Virtual
Private Networking ("VPN") solution. This solution provides a secure, high-
speed method for corporations to extend their Local Area Networks ("LANs") to
telecommuters and branch offices via the cable infrastructure. In November
1997, the Company announced a non-exclusive agreement with TCI, Cox and
Comcast to develop, deploy and market @Work Remote in areas served by these
Cable Partners. The @Work Remote service also includes the network equipment
and software needed to connect corporate LANs securely to the @Home Broadband
Network via high-bandwidth local telephone circuits. @Work Remote users can
gain secure access to all of their corporate LAN resources 24 hours a day,
seven days a week. The Company offers VPN capability between branch offices
and corporate headquarters.

The Company's future @Work service offerings will leverage the Company's
existing connectivity solutions and its broadband network architecture to
deliver more value-added services to commercial customers. @Work expects to
introduce enhanced access services that will include increased service level
options as well as solutions for companies seeking multiple commercial
Internet connections to provide redundancy and load balancing. The Company
also plans to develop and deploy hosting services that allow corporate
information technology professionals to outsource certain networking tasks.
For example, the Company anticipates introducing a variety of commercial
shared Web site hosting and co-location services in the third quarter of 1998.
To further this goal, the Company entered into an agreement in March 1998 with
Exodus, a provider of Internet hosting and network management solutions, to
develop and deploy @Work-branded shared server hosting solutions. These
hosting solutions will also serve as a platform for outsourced network-based,
commercial applications and related management services. In addition, by
designing each of its RDCs to include high-availability, high-performance
servers and mass storage, the Company believes that it will have the ability
to deliver and facilitate next-generation client-server and distributed-object
networked business applications. See "Risk Factors--Risks of Technological
Change."

@Media Services and Technologies

The Company's @Media group has established the @Home Portal as the leading
broadband Internet portal, providing a gateway to compelling multimedia and
electronic commerce offerings on the Internet. To date, the @Home Experience
has generated greater page views per subscriber than are reported by the
leading narrowband
Internet portal companies. The @Media group works with content providers to
facilitate the creation of rich multimedia broadband content delivered through
the @Home Portal and to facilitate online transactions and services for @Home
subscribers.

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The Company believes that growth in its subscriber base will be critical to
attracting advertisers. In addition to traditional sales and marketing
efforts, the Company has developed a variety of compelling programming
services delivered through the @Home Portal in order to drive incremental
subscriber penetration. In addition to receiving advertising fees, the @Media
programming services provide a variety of revenue sources. Examples of @Media
programming services include:

Real-Time News and Entertainment Services. Continuously-updated headlines
delivered in the News, Sports and Finance @Home channels, and video clips
presenting top stories, sports highlights and movie previews. Current
@Media partners include Bloomberg, CNN Interactive and the National
Basketball Association.

Interactive Shopping. Evaluate and purchase goods via an interactive
multimedia shopping experience. Current @Media partners include Amazon.com,
AutoConnect, BUYDIRECT, N2K, PC Connection, QVC, Realtor.com, Reel.Com and
Travelocity.

High-Speed Multiplayer Gaming. Download and play popular Internet games
against other online players, delivered via the @Home Games channel. By
combining high speed with very low latency, the @Home Broadband Network
provides an excellent environment for high-quality game play. The Company
has already co-located game servers on the network backbone and is offering
multiplayer online games to @Home subscribers from SegaSoft.

Digital Audio Services. Near-CD-quality audio on various music, talk and
event channels (e.g. jazz, rock and 24-hour sports talk) via the Company's
Tune-In service. Users can simultaneously listen to the Tune-In service and
browse the Internet. Current @Media partners include Bloomberg Radio, CNET
Radio, Net Radio, SportsLine and The DJ.

Software Purchase with Real-Time Downloading. Purchase and download
software titles at speeds substantially faster and with greater reliability
than a typical dial-up modem. @Home has partnered with Release Software to
create the "SoftwareNow" store. In addition to accelerated download speeds,
SoftwareNow.com gives @Home users multiple, unique purchase options
including a "Try-Before-Buy" option and rental software.

Enhanced Search and Directory Services. Leading search and directory
services integrated into the @Home Portal. Current @Media partners include
Inktomi Corporation ("Inktomi"), a leading provider of search solutions,
and Looksmart International Limited, a leading provider of directory
services.

The @Media group offers a series of technologies to assist advertisers and
content providers in delivering compelling multimedia advertising and premium
services, including replication and co-location. Replication enables the
Company's content partners to place copies of their content and applications
locally on the @Home Broadband Network, thereby reducing the possibility of
Internet bottlenecks at the interconnect points. Co-location allows content
providers to co-locate their content servers directly on the @Home Broadband
Network. Content providers can then serve their content to @Home subscribers
without traversing the congested Internet. For example, CNN and Bloomberg
videos are replicated into each of the @Home RDCs. Also, SoftwareNow.com
servers are co-located on the @Home backbone to enable faster downloading of
software, and multiplayer game servers are co-located to enable low-latency
online gaming.

The @Media group sells advertising through several formats including
banners, half-banners, and the "B*box," a broadband audio/video advertising
space. With the B*box, advertisers are not constrained by the Web banner
paradigm and can broaden their creative presentation using video clips, audio
and animation. Advertisers have the ability to enhance their message by using
multimedia tools and technologies such as Flash, Quicktime Video and Real
Audio. The Company derives advertising revenue on a CPM basis as well as on a
sponsorship basis. The Company had over 30 advertisers in the quarter ended
June 30, 1998, including Clorox, Disney, General Motors, Home Box Office,
Kraft, MGM, Procter & Gamble, Standard & Poor's, Toyota and Unilever.
Advertisers have reported response rates (click-throughs) substantially
greater than they currently experience with traditional Web banner
advertisements. The Company believes that advertisers' ability to present

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<PAGE>

more compelling messages to online users will lead to advertising rates
greater than those charged for banner advertising on the Web.

In addition to revenue derived from advertisements, the Company has
established relationships with certain of its interactive shopping and gaming
partners whereby the Company participates in the revenues or profits for
certain transactions on the @Home Portal. The Company also allows certain of
its content partners to sponsor certain content channels for a fee.

THE @HOME BROADBAND NETWORK

The Company designed the @Home Broadband Network on the premise that
sustainable, high-performance Internet access requires a new, scalable
architecture to alleviate Internet bottlenecks and to enable true end-to-end
network management capabilities. Residential subscribers access the network
primarily through high-speed cable modems, which attach to their personal
computers via a standard Ethernet connection, while businesses can also
connect through CLEC telecommunications networks. The four key principles of
the Company's network strategy are moving data closer to the user, end-to-end
network management, "always-on" service and scalability.

Moving Data Closer to the User. The @Home Broadband Network utilizes caching
and replication technologies to move the information that a subscriber
requests close to the subscriber. Local caching reduces backbone network
traffic, enabling the @Home Broadband Network to overcome a fundamental
weakness of the Internet--duplicative data transfers. For example, when a
subscriber downloads a video clip from a Web site, the user must "pull" data
across the Internet from that Web site to the user's ISP and finally to the
user's computer. If the user's neighbor requests the same video clip from that
Web site, the neighbor must pull the same data across a similar path. In
contrast, the Company's approach would move the video clip over its high-speed
backbone only once in a given geographic area and retain it in a local cache
near the user's home where it could be accessed by every subscriber within
that area without retransmission over the backbone. This more cost-effective
approach simultaneously improves the end user's performance and reduces
traffic volume across the backbone.

End-to-End Network Management. End-to-end network management is achieved
through the Company's proactive network quality, service and performance
management systems. The @Home Broadband Network provides visibility from the
Company's servers (or content partners' servers) across the backbone and all
the way to the subscriber's home. Because the @Home Broadband Network is
centrally managed, the Company can dynamically identify and enhance network
quality, service and performance, or address issues before they affect the
user experience.

"Always On" Service. The @Home Broadband Network is "always on," unlike
switched technologies such as dial-up and ISDN. The user is always connected
to the Internet as long as his or her computer and cable modem are on. This
eliminates the need for a time-consuming connection process, as with a dial-up
service, and changes the way the customer uses the Internet.

Scalability. The @Home service is architected to be scalable to handle
increasing numbers of subscribers without degradation. Although proximate
users share high-bandwidth access (much like corporate LANs), which may limit
the effective bandwidth that is available to a given subscriber at a given
time, this shared connection is particularly efficient and well suited to the
sporadic nature of Internet traffic, where browsing tends to consume bandwidth
in discrete bursts intermixed with periods of inactivity. As subscriber
penetration increases, the cable operator has multiple cost-effective
alternatives to increase capacity, including allocating additional 6 MHz
channels for the @Home service or reducing the number of subscribers sharing a
given bandwidth by adding nodes, with each node serving a smaller number of
subscribers over the same fiber-optic infrastructure.

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The primary components of the @Home Broadband Network are the Company's
high-speed private national backbone, RDCs, regional networks, headends
(including caching servers), network connections and cable modems and the
Network Operations Center.

Private National Backbone. The Company operates its own private national
backbone, which consists of a network of high-speed asynchronous transfer
mode ("ATM") communications services that the Company leases to connect its
RDCs and regional networks with content providers and the Internet. These
services currently operate at a speed of 45 Mbps and can be upgraded to 155
Mbps or higher. This backbone can be viewed as a high-speed "parallel
Internet" that connects via the Company's routers to the Internet at
multiple network access points ("NAPs") with "Tier-One" peering status,
which permits the Company to exchange Internet traffic with other
nationwide ISPs.

Regional Data Centers. The RDCs act as service hubs for defined geographic
areas, such as major metropolitan areas, providing key services, including
email, news groups and chat facilities, to subscribers, managing network
performance proactively, replicating content and applications, and
providing a cost-efficient infrastructure to cache and multicast data
throughout a region and to house local content and subscribers' Web pages.
The Company uses "high availability" servers from Sun Microsystems, Inc.
("Sun") in its RDCs for these mission-critical activities. The Company had
deployed RDCs in 19 geographic areas as of June 30, 1998. The Company
estimates that providing the @Home service throughout North America will
require between 40 and 50 RDCs.

Regional Networks. The regional networks consist of network routers and
switches that interconnect the Company's RDCs and its national backbone to
multiple cable headend facilities at speeds of 45 Mbps to 155 Mbps. These
networks generally take advantage of cable operators' fiber optic
infrastructures that are normally used to transport cable television
signals from a consolidated master headend facility to other headends
within a region. This approach often allows the Company to avoid the high
cost of leasing conventional high-speed communication services from local
telephone companies when deploying high-speed connectivity in a region.

Headends. The cable system headends are connected to each RDC through the
regional network. In order to move data as close to the subscriber as
possible and to avoid repetitive transmission of the same data, the
headends employ high-performance caching servers that store frequently
accessed content locally, thereby greatly reducing the amount of data
transmission (and corresponding transport costs) in higher layers of the
network. In addition, local caching servers can compile far more
comprehensive usage data than is normally attainable on the Internet, which
can be used for network troubleshooting, tuning performance and tailoring
the @Home service.

Network Connections. The last leg of the network connection is from the
headend to the consumer over a cable operator's HFC cable system. Multiple
fiber optic lines carry the signal from the headend out to cable "nodes" in
each neighborhood, which in turn connect through traditional coaxial cable
to the home. These fiber optic nodes typically service from 300 to 2,000
homes in a relatively modern cable system. In such a system, each
television channel requires 6 MHz of the 450-750 MHz of total system
capacity. Downstream transmission of the @Home service utilizes a similar
channel. Upstream transmission, however, utilizes a frequency range not
used for traditional broadcast by cable systems. This range is more prone
to interference than downstream channels, which effectively limits the peak
upstream transmission speed.

Cable Modems. In the home, a cable modem connects to the cable television
coaxial wiring and attaches to the user's personal computer via standard
Ethernet connections. While peak data transmission speed of a cable modem
depends on the specific model and can approach 10-27 Mbps downstream and
0.7-10 Mbps upstream, the performance that subscribers actually experience
is often constrained by the capacity of their personal computers, the
capacity of the server being accessed, and the type of network architecture
utilized. The North American cable industry has adopted a set of interface
specifications for hardware and software to support the delivery of data
services utilizing interoperable cable modems. The Company believes that
these specifications, together with the agreement that the Company entered
into with Intel in July 1997 relating to the development of "plug and play"
modems, will facilitate the growth of the cable modem

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industry and the availability of lower cost interoperable cable modems
through retail channels. See "Risk Factors--Unproven Network Scalability,
Speed and Security" and "--Dependence on Two-Way Cable Modems; New Industry
Standard."

Network Operations Center. The Company provides end-to-end network
management through its NOC. The NOC uses advanced network management tools
and systems to monitor the network infrastructure on a 24 x 7 basis,
enhancing its ability to address performance bottlenecks before they affect
the user experience. From the NOC, the Company can manage the @Home
Broadband Network from end-to-end, including the backbone, RDCs, regional
networks, headend facilities, servers and other components of the network
infrastructure to the user's home. See "Risk Factors--Risk of System
Failure."

The Company also utilizes certain key technologies from third parties to
build and manage the @Home Broadband Network. In particular, the Company has
established strategic relationships with Sun for high availability servers,
Silicon Graphics, Inc. ("SGI") for caching servers, Cisco Systems, Inc. for
network routing and switching hardware, Sprint for national switched ATM
backbone services, Objective Systems Integrators, Inc. for network management
software, Tivoli Systems Inc. for systems management software to operate RDCs
remotely, Oracle Corporation for advanced database management software,
Netscape and Microsoft for server and browser software, Inktomi for proxy and
caching software and Software.com for more efficient mail delivery. See "Risk
Factors--Risks of Technological Change" and "--Unproven Network Scalability,
Speed and Security."

PRODUCT DEVELOPMENT AND ENGINEERING

The Company's product development and engineering efforts focus on: (i)
design and development of new technologies and products to increase the speed
and efficiency of the Company's broadband network architecture and to
facilitate the development and distribution of high bandwidth content and
commercial value-added applications; (ii) adaptation of the Company's network
services for use over non-HFC access technologies, such as DSL; and (iii)
porting the appropriate components of the @Home Experience to TV-based
Internet devices and developing software, email support and related services
for these devices. See "Risk Factors--Risks Associated with Joint Development
Effort."

The Company's product development and engineering expenses for the period
from March 28, 1995 (inception) to December 31, 1995, the years ended December
31, 1996 and 1997 and the six months ended June 30, 1998 were $1.4 million,
$6.3 million, $12.0 million and $7.5 million, respectively.

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STRATEGIC DISTRIBUTION RELATIONSHIPS

Strategic Relationships with North American Cable Partners. The Company has
strategic relationships with 15 cable companies whose systems pass
approximately 57.1 million homes in North America. Subject to certain
exceptions, TCI, Comcast, Cablevision and Cox have granted the Company the
exclusive right to offer high-bandwidth residential consumer Internet services
over their cable systems until June 4, 2002. Rogers and Shaw have agreed to
market and promote the @Home service in Canada on an exclusive basis. The
Company's other Cable Partners in North America have entered into agreements
to distribute the @Home service on an exclusive basis through certain of their
cable systems. The following table sets forth what the Company believes are
the approximate number of homes passed by the cable systems of each of the
Cable Partners and the principal cities and regions served by their cable
systems as of June 30, 1998. See "Risk Factors--No Obligation of Principal
U.S. Cable Partners to Carry the Company's Services; Limitations on Their
Exclusivity."

<TABLE>
<CAPTION>
MILLIONS OF
HOMES PRINCIPAL CITIES AND COMMUNITIES SERVED
CABLE PARTNER PASSED BY CABLE PARTNERS' SYSTEMS
------------- ----------- ---------------------------------------
<C> <C> <S>
TCI.................. 22.7(1)(2) Chicago, Dallas, Denver, Hartford,
Miami, Pittsburgh, San Francisco Bay
Area, Seattle and Washington, D.C.
Comcast.............. 7.2 Baltimore, Detroit, Northern New Jersey,
Orange County, Philadelphia and
Sarasota
Cox.................. 5.6(3) Hampton Roads, Hartford, Las Vegas, New
Orleans, Oklahoma City, Omaha, Orange
County, Phoenix, Providence and San
Diego
Cablevision.......... 5.1(4) Boston, Cleveland, Long Island and
Southern Connecticut
Rogers............... 2.8 London, Ottawa, Toronto and Vancouver
Century.............. 2.8 Colorado Springs and Los Angeles
Jones................ 2.4(5) Independence, Savannah and Washington,
D.C. Area
Shaw................. 2.0 Calgary, Edmonton, Saskatoon, Victoria,
Windsor and Winnipeg
Marcus............... 2.0(6) Fort Worth
InterMedia........... 1.4(6) Asheville, Greenville, Nashville and
Spartanburg
Lenfest.............. 1.4 Northern Delaware, Southeastern
Pennsylvania and Southern New Jersey
Cogeco............... 1.0(5) Ontario and Quebec
Insight.............. 0.4 Illinois and Indiana
Garden State......... 0.3 Southern New Jersey
Bresnan.............. 0.1 Michigan
-------
TOTAL............... 57.1
=======
</TABLE>
- --------
(1) TCI has announced the proposed sale or transfer of a number of cable
systems to other cable companies or joint ventures, some of which do not
currently have distribution arrangements with the Company. Although TCI
has informed the Company that it is attempting to cause certain of these
cable systems to remain subject to the Exclusivity Obligations, there can
be no assurance that these efforts will be successful. See "Risk Factors--
Potential Disposition of Cable Systems by Principal U.S. Cable Partners."

(2) Includes 357,819 homes that TCI anticipates transferring to Cablevision at
a later date.

(3) Includes approximately 506,000 homes in Las Vegas that are expected to be
transferred to Cox in the fourth quarter of 1998.

(4) Does not include 357,819 homes that TCI anticipates transferring to
Cablevision at a later date.

(5) Certain of the homes passed by such Cable Partner's cable systems are not
subject to the Exclusivity Obligations.

(6) Represents total homes passed by such Cable Partner's cable systems. The
Company has agreements for distribution of its @Home service only with
respect to the cities and communities listed, which represent a small
portion of the total homes passed.

25
<PAGE>

Of the 57.1 million homes, approximately 7.9 million were passed by upgraded
two-way HFC cable as of June 30, 1998, and the Company believes that the Cable
Partners will complete the upgrade of systems passing a majority of their
homes within five years. However, certain of the Cable Partners have limited
experience with these upgrades, and these investments have placed a
significant strain on the financial, managerial, operating and other resources
of the Cable Partners, most of which are already highly leveraged, and thus
have been, and the Company expects will continue to be, subject to change,
delay or cancellation. Although the Company's commercial success depends on
the successful and timely completion of these infrastructure upgrades, most of
the Cable Partners are under no obligation to the Company to upgrade systems
or to roll out, market or promote the Company's services. In addition, most of
the Cable Partners have not agreed to any specific schedule for rolling out
two-way HFC infrastructure improvements, and most of the Cable Partners are
not contractually required to achieve any specific roll-out schedule. See
"Risk Factors--Dependence on Cable Partners to Upgrade to Two-Way Cable
Infrastructure Necessary to Support the @Home Service; Uncertain Availability
and Timing of Upgrades" and "--Potential Disposition of Cable Systems by
Principal U.S. Cable Partners."

As of June 30, 1998, the Company had approximately 147,000 subscribers in
the United States and Canada, including recently acquired Internet subscribers
served by Jones and Cogeco that are being converted to the @Home service. As
of June 30, 1998, Cablevision, Comcast, Cox, InterMedia, Marcus, Rogers, Shaw
and TCI had launched the @Home service in portions of the cities and
communities set forth in the following table.

<TABLE>
<CAPTION>
CABLE
PARTNERS CITIES & COMMUNITIES
----------------------------------------------------------------------
<S> <C> <C>
CABLEVISION
Norwalk, CT
----------------------------------------------------------------------
COMCAST Atlanta, GA Orange County, CA
Baltimore, MD Philadelphia, PA
Detroit, MI Sarasota, FL
Chesterfield, VA
----------------------------------------------------------------------
COX Hampton Roads, VA Orange County, CA
Hartford, CT Phoenix, AZ
Oklahoma City, OK Providence, RI
Omaha, NE San Diego, CA
----------------------------------------------------------------------
INTERMEDIA Greenville, SC
Nashville, TN
Spartanburg, SC
----------------------------------------------------------------------
MARCUS Fort Worth, TX
----------------------------------------------------------------------
ROGERS Ottawa, ON
Toronto, ON
Vancouver, BC
----------------------------------------------------------------------
SHAW Calgary, AB Richmond Hill, ON
Edmonton, AB Saskatoon, SK
Ft. McMurray, AB Victoria, BC
----------------------------------------------------------------------
TCI Arlington Heights, IL Hartford, CT
Baton Rouge, LA Pittsburgh, PA
Dallas, TX San Francisco Bay Area, CA
Denver, CO Seattle, WA
</TABLE>

In order to shorten time to market for cable operators, the Company provides
a turnkey solution, which includes not only a technology platform, but also a
national brand, marketing, customer service and billing. This solution enables
the Cable Partners to leverage their respective infrastructures to deliver
high-bandwidth interactive data services that represent significant new
revenue opportunities. The Company's Cable Partners have the additional
opportunity to develop and receive all the revenues derived from local content
distributed locally through portions of the @Home Broadband Network to local
subscribers. The Cable Partners bear the cost of upgrading and maintaining
their cable systems to provide high-speed two-way data transmission,
installing the

26
<PAGE>

@Home service in subscribers' homes, procuring the cable modems needed to
interface with the @Home Broadband Network and local marketing efforts. See
"Risk Factors--Subscriber Growth Risks for the @Home Service."

Under the current Principal U.S. Cable Partner arrangements, the Company
receives 35% of both the basic monthly fees and the fees for premium services,
and the Principal U.S. Cable Partner retains the entire installation payment.
In Canada, the Company receives a smaller percentage of the monthly
subscription fees billed by Rogers, Shaw and Cogeco because Rogers, Shaw and
Cogeco are responsible for various costs that are not borne by the Company's
Cable Partners in the United States such as the costs of providing additional
customer support, data transport within Canada, and marketing and programming.

In international markets, the Company anticipates that the subscriber
pricing and revenue or royalty splits with cable system operators will be
different from those that prevail in the United States based on differences in
services and content provided by the international cable system operators,
data transport costs and regulatory environments. To the extent that the
Company offers terms of distribution and other services to international cable
system operators that are more favorable than those offered to the four
Principal U.S. Cable Partners, these Principal U.S. Cable Partners have the
right to obtain such more favorable terms under a "most favored nation"
provision in the Master Distribution Agreement entered into by the Principal
U.S. Cable Partners and @Home as of October 10, 1997.

Strategic Relationships with Cable Partners Outside of North America. On
July 15, 1998, the Company entered into a Joint Venture Agreement with Edon
and MEGA Limburg Telediensten N.V. and N.V. PNEM Teleservices, together acting
under the trade name Palet Kabelcom ("Palet Kabelcom") (Edon and Palet
Kabelcom are each multi-system cable operators in The Netherlands which
together cover approximately twenty percent (20%) of homes served by cable in
The Netherlands), to create a Netherlands limited liability company to be
known as @Home Benelux B.V. ("@Home Benelux"). @Home Benelux will deliver a
customized version of the Company's Internet services to residential cable
subscribers in The Netherlands and, later, throughout the Dutch-speaking
Benelux territories. In connection with the formation of @Home Benelux, the
Company has agreed to license to @Home Benelux its core technologies on an
exclusive basis in the Dutch-speaking Benelux territories for a period of
seven years commencing on the earlier of June 30, 1999 or the date the Company
is first entitled to receive revenue from its 1,000th @Home Benelux
subscriber. The Company will also perform certain management services in
connection with the start-up and ongoing operations of @Home Benelux. Edon and
Palet Kabelcom have each agreed to the exclusive distribution via their cable
networks of the Company's Internet services for a similar time period as the
@Home Benelux license. @Home Benelux will also seek to expand its penetration
of homes served by cable in the Benelux territories by entering into
additional exclusive distribution agreements with other multi-system cable
operators. The Company believes that @Home Benelux will begin delivery of the
Company's services to customers in The Netherlands in the first quarter of
1999.

Agreement with TCG. The Company has a Master Communications Services
Agreement with TCG, the largest CLEC in the United States, which provides
high-speed fiber optic telecommunications services to commercial customer
sites in 65 metropolitan centers in the United States. Under its agreement
with the Company, TCG provides the Company with telecommunications facilities
management and network services for the local telecommunications transport
requirements of the Company's @Work services. In markets served by TCG
networks, TCG provides the Company with (i) the ability to co-locate its
equipment within TCG's network distribution facilities and (ii) transport
access facilities to and from the co-located equipment, including all services
provided completely on TCG's network and services provided through a
combination of TCG's network and the network of a third-party local exchange
carrier. The agreement provides the Company with such telecommunications
services at rates generally at or below those of competing carriers, and the
ability to co-locate the Company's RDCs within TCG's network distribution
facilities at favorable rates. The Company's access to TCG's fiber optic
network and switching infrastructure gives the Company a nationwide
opportunity in the commercial marketplace, which the Company believes will
accelerate the deployment of the Company's @Work services into major United
States markets. In July 1998, AT&T acquired TCG, and there can be no assurance
that the Company's favorable relationship with TCG will continue or will
provide the anticipated benefits.

27
<PAGE>

Agreement with Northpoint. In June 1998, the Company entered into an
agreement with Northpoint, a wholesale data CLEC that provides DSL access to
small and medium sized businesses, whereby Northpoint provides "local loops"
that represent an additional last-mile transport option for @Work's Internet
access and networking offerings. Northpoint currently offers service in
Boston, metropolitan Los Angeles and the San Francisco Bay Area and plans to
expand nationally over the next several years. As part of the agreement, the
Company will receive engineering and operational support from Northpoint. In
addition, the Company will have input into Northpoint's launch plans, and the
two companies will jointly fund marketing programs. The Company believes that
favorable access to Northpoint's DSL transport services will facilitate
@Work's deployment of value-priced dedicated commercial Internet access
services aimed at small businesses that historically have relied on dial-up or
ISDN access options.

Agreement with Exodus. In March 1998, the Company entered into an agreement
with Exodus, a provider of Internet hosting and network management services,
under which Exodus will work with the Company to develop and implement
customized, @Work-branded versions of Exodus' server hosting and network
management services solutions that leverage Exodus facilities and
infrastructure. The Company will market and sell these solutions in
conjunction with @Work's connectivity and value-added network applications.
Additionally, Exodus has committed to market and resell certain @Work
commercial connectivity and value-added application solutions. Exodus and the
Company will also work to interconnect their respective networks, allowing the
Company to take advantage of Exodus' series of private and public peering
relationships. The Company believes that favorable access to these hosting
capabilities will accelerate the development and implementation of @Work's
network-based applications and other services.

28
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company, and their ages and
positions, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Thomas A. Jermoluk...... 42 Chairman of the Board, President and Chief Executive Officer
David P. Bagshaw........ 45 Senior Vice President, @Media Group
Leilani T. Gayles....... 43 Vice President, Human Resources
Dean A. Gilbert......... 41 Senior Vice President and General Manager, @Home Group
Kenneth A. Goldman...... 49 Senior Vice President and Chief Financial Officer
Adam Grosser............ 37 Vice President, Product Development
Donald P. Hutchison..... 41 Senior Vice President and General Manager, @Work Group
Milo S. Medin........... 35 Senior Vice President and Chief Technology Officer
John L. O'Farrell....... 39 Senior Vice President, International
David G. Pine........... 39 Vice President, General Counsel and Secretary
Robert E. Tomasi, Jr. .. 46 Senior Vice President, Operations
William R. Hearst
III(1)................. 49 Vice Chairman
James L. Barksdale...... 55 Director
Joseph W. Cece.......... 44 Director
L. John Doerr(2)........ 47 Director
Leo J. Hindery, Jr. .... 50 Director
John C. Malone.......... 57 Director
Bruce W. Ravenel(1)(2).. 48 Director
Brian L. Roberts........ 39 Director
Larry E. Romrell........ 58 Director
James R. Shaw........... 40 Director
David M. Woodrow(1)..... 52 Director
</TABLE>
- --------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee

Thomas A. Jermoluk has served as Chairman of the Board, President and Chief
Executive Officer of the Company since he joined the Company in July 1996.
From 1994 to July 1996, he was President and, from 1992 to July 1996, he was
Chief Operating Officer of SGI, a visual computing company. From 1991 to 1994,
Mr. Jermoluk was Executive Vice President of SGI, and, from 1988 to 1991, he
was Vice President and General Manager of SGI's Advanced System Division. From
October 1993 to August 1996, he was a member of the board of directors of SGI.
Prior to joining SGI in 1986, Mr. Jermoluk managed a variety of hardware and
software development projects at Hewlett-Packard Company and Bell
Laboratories. He currently serves on the board of directors of Forte Software,
Inc. Mr. Jermoluk holds B.S. and M.S. degrees in Computer Science from
Virginia Tech.

David P. Bagshaw has served as the Senior Vice President and General
Manager, @Media Group of the Company since he joined the Company in September
1996. From August 1991 to August 1996, he served as Vice President of
Marketing for SGI, where he was responsible for various marketing
organizations and activities, including communications, public relations,
business development, application developer support and product marketing.
From 1987 to August 1991, he served as a product manager and as a director of
marketing at SGI. Mr. Bagshaw holds B.S. and M.S. degrees in Mechanical
Engineering from Stanford University and an M.B.A. degree from the Stanford
University Graduate School of Business.

Leilani T. Gayles has served as Vice President, Human Resources of the
Company since she joined the Company in October 1997. From October 1995 until
October 1997, she served as a human resources consultant

29
<PAGE>

to a variety of companies. From February 1985 until June 1995, she held
various management positions, including Vice President, Human Resources, at
Silicon Graphics Computer Systems, a worldwide manufacturer of computer
workstations. Previously, Ms. Gayles was employed by Hewlett-Packard Company,
a manufacturer of computing and other electronic products. Ms. Gayles holds a
B.S. degree in Organization Behavior from the University of San Francisco.

Dean A. Gilbert has served as Senior Vice President and General Manager,
@Home Group of the Company since November 1996 and served as Senior Vice
President, Marketing and Sales of the Company from February 1996 to November
1996. From September 1994 to February 1996, he served as President and Chief
Executive Officer of Positive Communications, Inc., a provider of paging
products and services. From 1991 to September 1994, Mr. Gilbert served as
Executive Vice President, Group Operations and from 1989 to 1991 as Senior
Vice President, Marketing, Programming and Business Development at KBLCOM,
Incorporated, a cable television provider. He holds B.A. and M.A. degrees in
Telecommunications from Michigan State University.

Kenneth A. Goldman has served as Senior Vice President and Chief Financial
Officer of the Company since he joined the Company in July 1996. From July
1992 to July 1996, he was Senior Vice President and Chief Financial Officer of
Sybase, Inc., a database software and services company. From 1989 to
July 1992, Mr. Goldman was Vice President of Finance and Administration and
Chief Financial Officer at Cypress Semiconductor Corporation. From 1983 to
1989, he was Vice President and Chief Financial Officer of VLSI Technology,
Inc. Mr. Goldman serves on the board of directors of Global Village Inc. He
holds a B.S. degree in Electrical Engineering from Cornell University and an
M.B.A. degree from the Harvard University Graduate School of Business.

Adam Grosser has served as Vice President, Product Development of the
Company since he joined the Company in February 1997. Prior to that time, Mr.
Grosser was the President and Chief Executive Officer of Catapult
Entertainment, Inc., a provider of networking services for personal computers
and console video games that he co-founded in April 1994 and sold in November
1996. From August 1992 to April 1994, Mr. Grosser was the Senior Vice
President of New Media at Sony Pictures. From August 1990 to August 1992, he
was the General Manager of the New Media Group at LucasArts Entertainment. Mr.
Grosser holds B.A., M.A. and M.B.A. degrees from Stanford University.

Donald P. Hutchison has served as Senior Vice President and General Manager
of the Company's @Work Group since he joined the Company in February 1997.
Prior to that time, he served as Senior Vice President, Strategic Partnerships
from March 1996 to November 1996, Senior Vice President, Sales from August
1995 to March 1996 and Vice President, Sales and Marketing from May 1994 to
August 1995 of Netcom On-Line Communications Services, Inc., an Internet
access service provider. From 1989 to May 1994, Mr. Hutchison was Director of
Sales and Marketing at TAU Corporation, a digital video imaging company. From
1987 to 1989, he was Director of Sales and Business Planning for Pixar
Animation Studios, and, prior to that time, he held various sales and
management positions with Prime Computer and Data General Corporation. Mr.
Hutchison holds a B.A. in Business Economics from the University of California
at Santa Barbara and an M.B.A. degree from Loyola Marymount University.

Milo S. Medin has served as Senior Vice President and Chief Technology
Officer of the Company since March 1998. Prior to March, Mr. Medin served as
the Company's Vice President, Networks from the time he joined the Company as
its founder in June 1995. From 1985 to June 1995, he was employed at the NASA
Ames Research Center ("NASA Ames"), where he was responsible for a variety of
wide area networking projects, including the use of Internet technology to
interconnect NASA facilities and researchers at over 200 sites in
16 countries. In 1989, Mr. Medin developed the architecture for the first
Internet interconnect at NASA Ames, linking the major government backbones
together. He also managed the National Research and Education Network project
at NASA Ames, which, in concert with the United States Department of Energy,
deployed the first non-experimental 155 Mbps Internet backbone using switched
ATM services to interconnect supercomputing and data archive facilities across
the United States. Prior to joining NASA, he was employed by Science
Applications Inc. as a programmer for defense program activities at the
Lawrence Livermore National

30
<PAGE>

Laboratory and at the Los Alamos National Laboratory. In addition, Mr. Medin
has been active in the development of Internet routing protocols and
standards, primarily in the Internet Engineering Task Force, the leading
Internet development and standards organization, for more than 10 years. He
studied Computer Science at the University of California at Berkeley.

John L. O'Farrell has served as Senior Vice President, International of the
Company since he joined the Company in April 1997. From August 1995 to April
1997, he was President of U S WEST Interactive Services, Inc., an Internet
content development company. From May 1994 to August 1995, he was Vice
President, Corporate Strategy of U S WEST, Inc., a telephone and cable network
operator, and, from March 1992 to May 1994, he was Executive Director,
Corporate Strategy of U S WEST, Inc. Before joining U S WEST, Inc., he held
general management, marketing and consulting positions in the United States
and Europe with Telecom Ireland (Ireland), Booz, Allen & Hamilton (U.S.), the
Commission of European Communities (Luxembourg), Digital Equipment Corporation
and Siemens AG (both Germany). Mr. O'Farrell holds a B.E.E. degree from
University College Dublin, Ireland and an M.B.A. degree from the Stanford
University Graduate School of Business.

David G. Pine has served as Vice President and General Counsel of the
Company since he joined the Company in April 1996 and as secretary of the
Company since July 1996. From July 1990 to March 1996, he served as Vice
President, General Counsel and Secretary for Radius Inc., a manufacturer of
Macintosh computer peripherals. Before that, Mr. Pine was in private practice
with Fenwick & West LLP. Mr. Pine holds an A.B. degree in Government from
Dartmouth College and a J.D. degree from the University of Michigan
Law School.

Robert E. Tomasi, Jr. has served as the Company's Senior Vice President,
Operations since he joined the Company in November 1997. From November 1996 to
November 1997, he served as Chief Operating Officer of Best Internet
Communications, Inc., an Internet services organization specializing in Web
hosting. From November 1994 to November 1996, Mr. Tomasi served as Vice
President Operations of Netcom. Prior to that, Mr. Tomasi spent sixteen years
in various management positions at British Telecommunications ("BT"), a
telecommunications provider. As Vice President of Operations for BT, he
directed the domestic and international expansion of Tymnet Data Network, and
had responsibility for global operations, customer service and technical
support. He also served as General Manager of BT's Custom Data Networks
business in London, England. Mr. Tomasi holds a B.S. degree in Electrical
Engineering, Computer Systems from the New Jersey Institute of Technology.

William R. Hearst III has been a director of the Company since August 1995
and has served as Vice Chairman of the Board of Directors since July 1996. He
has been a general partner of Kleiner Perkins Caufield & Byers ("KPCB"), a
venture capital firm, since January 1995. From May 1995 to July 1996, he was
the founding Chief Executive Officer of the Company. Before joining KPCB, Mr.
Hearst was editor and publisher of the San Francisco Examiner for ten years.
He is a Fellow of the American Association for the Advancement of Science and
Technology and a Trustee of the Carnegie Institute in Washington, D.C. and the
California Academy of Sciences. Mr. Hearst serves on the board of directors of
Preview Travel, Inc. and Hearst Argyle Television, Inc. Mr. Hearst holds an
A.B. degree in Mathematics from Harvard University.

James L. Barksdale has been a director of the Company since August 1995. He
has been President and Chief Executive Officer of Netscape, an Internet
software company, since January 1995. He has served as a director of Netscape
since October 1994. From January 1992 to January 1995, Mr. Barksdale served as
President and Chief Operating Officer, and, as of September 1994, the Chief
Executive Officer, of AT&T Wireless Services (formerly, McCaw Cellular
Communications, Inc.), a cellular telecommunications company. From April 1983
to January 1992, he served as Executive Vice President and Chief Operating
Officer of Federal Express Corporation. From 1979 to 1983, Mr. Barksdale
served as Chief Information Officer of Federal Express Corporation. He also
held various management positions, including Chief Information Officer, with
Cook Industries, Inc., during the mid-1970s and was employed by International
Business Machines Corporation from

31
<PAGE>

1965 to 1972. Mr. Barksdale serves on the boards of directors of 3Com
Corporation, Robert Mondavi Corp. and Network Computer, Inc. He holds a B.S.
degree in Business Administration from the University of Mississippi.

Joseph W. Cece has been a director of the Company since May 1998. He has
been Senior Vice President, Strategic Planning of Cablevision since February
1996. From January 1994 to February 1996, he served as President and Chief
Operating Officer of Cablevision Lightpath, Inc., and from September 1993 to
January 1994, he served as Vice President, New Business of Cablevision. From
October 1988 to August 1993, Mr. Cece served as President and Publisher of
T.V. Guide.

L. John Doerr has been a director of the Company since August 1995. He has
been a general partner of KPCB since September 1980. Prior to joining KPCB,
Mr. Doerr was employed by Intel Corporation for five years. He serves on the
boards of directors of Amazon.com, Inc., Intuit Inc., Netscape, Platinum
Software Corporation, Shiva Corporation and Sun Microsystems, Inc. Mr. Doerr
holds B.S.E.E. and M.E.E. degrees from Rice University and an M.B.A. degree
from the Harvard University Graduate School of Business.

Leo J. Hindery, Jr. has been a director of the Company since October 1997.
He has served as the President and Chief Operating Officer of TCI, a cable
systems company, since March 1997. Mr. Hindery has served as a director of TCI
since May 1997 and has served as Chairman of the Board of TCI Music, Inc.
since January 1997. He has served as President and Chief Executive Officer of
TCI Communications, Inc. ("TCIC") since March 1997 and has served as President
and Chief Executive Officer of TCI Pacific Communications, Inc. ("TCI
Pacific") since September 1997. Mr. Hindery has served as a director of TCIC
since March 1997 and has served as a director of TCI Pacific since September
1997. In addition, he is President, Chief Executive Officer and/or a director
of many of TCI's subsidiaries. Mr. Hindery was previously founder, Managing
General Partner and Chief Executive Officer of InterMedia Partners, a cable TV
operator, and its affiliated entities from 1988 until March 1997. He was a
director of DMX, Inc. from May 1996 to July 1997. Mr. Hindery also is a
director of Tele-Communications International, Inc., United Video Satellite
Group, Inc. TCI Satellite Entertainment, Inc., Cablevision Systems Corporation
and Lenfest Communications, Inc.

John C. Malone has been a director of the Company since April 1997. He has
served as Chairman of the Board of TCI since November 1996 and has served as
Chief Executive Officer of TCI since August 1994. Dr. Malone was also
President of TCI from August 1994 through March 1997. He served as Chief
Executive Officer of a predecessor of TCI from March 1992 to August 1994 and
as President of such predecessor company from 1973 to August 1994. Dr. Malone
has been a director of TCI and its predecessors since 1973. Dr. Malone also
serves on the boards of directors of Tele-Communications International, Inc.,
TCI Satellite Entertainment, Inc., BET Holdings, Inc., Cablevision Systems
Corporation, Lenfest Communications, Inc., TCI Pacific and the Bank of New
York Company, Inc. He holds a B.S. degree in Electrical Engineering and
Economics from Yale University and a M.S. degree in Industrial Management and
a Ph.D. in Operations Research from Johns Hopkins University.

Bruce W. Ravenel has been a director of the Company since August 1995. Since
March 1998, he has served as Executive Vice President-Interactive Ventures of
TCIC. From January 1996 to March 1998, he has served as President and Chief
Executive Officer of TCI.NET, Inc. and Senior Vice President of TCIC, both
wholly owned subsidiaries of TCI, where he has been responsible for all
Internet-related business activities of TCI. From March 1994 to January 1996,
Mr. Ravenel was Senior Vice President and Chief Operating Officer of TCI
Technology Ventures, Inc., a division of TCI. From March 1992 to March 1994,
he served as Vice President of TCI Technology, Inc. Mr. Ravenel holds a B.A.
degree in Economics from the University of Colorado.

Brian L. Roberts has been a director of the Company since August 1996. He
has served as President of Comcast since February 1990 and as a director of
Comcast since 1987. Prior to becoming President, Mr. Roberts spent eight years
in various management positions with Comcast. Mr. Roberts also serves as Vice
President and a director of Sural Corporation, a privately-held investment
company, and as a director of Comcast UK Cable Partners Limited. Mr. Roberts
holds a B.S. degree in Finance from the Wharton School of Finance of the
University of Pennsylvania.

32
<PAGE>

Larry E. Romrell has been a director of the Company since August 1995. He
has served as Executive Vice President of TCI since January 1994 and Executive
Vice President and Chief Executive Officer of TCI Business Alliance and
President of TCI Technology Ventures, Inc. from September 1994 to October
1997. From 1991 to October 1994, Mr. Romrell was Senior Vice President of
TCIC. He serves on the boards of directors of General Communication, Inc., TCG
and United Video Satellite Group, Inc.

James R. Shaw has been a director of the Company since July 1998. He has
served as President and Chief Operating Officer of Shaw since November 1995,
and from 1982 to November 1995, he held other management positions with Shaw.
Mr. Shaw is the Chairman of Vision.com, a strategic alliance of Canadian cable
television companies, and is a Director of CableLabs, a North American cable
television research organization.

David M. Woodrow has been a director of the Company since August 1996. He
has served as Senior Vice President of Broadband Services for Cox since April
1994. Mr. Woodrow joined Cox in 1982 as Director, Business Development, and
was promoted to Western Regional Manager in 1984, to Vice President and
General Manager of Cox Cable Santa Barbara, Inc. in 1985 and to Senior Vice
President, Operations in 1989. Prior to joining Cox, he was employed by the
Technology Components Group of Exxon Enterprises from 1976 to 1982 and by
Pitney Bowes, Inc. from 1970 to 1976. Mr. Woodrow serves on the board of
directors of TCG. He holds B.S. and M.S. degrees in Mechanical Engineering
from Purdue University and an M.B.A. degree from the University of
Connecticut.

33
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to the Company with
respect to the beneficial ownership of the Company's Common Stock as of June
30, 1998 and as adjusted to reflect the sale of the 2,500,000 shares of Series
A Common Stock offered hereby by: (i) each person who is known by the Company
to own beneficially more than 5% of the Company's Common Stock; (ii) each
director of the Company; (iii) the Company's Chief Executive Officer and each
of the Company's five other most highly compensated executive officers during
1997; and (iv) all directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
COMMON STOCK VOTE OF ALL
NUMBER OF SHARES BENEFICIALLY BENEFICIALLY SERIES OF COMMON
OWNED(1) OWNED STOCK
------------------------------- ----------------- -----------------
AFTER AFTER
BEFORE OFFERING BEFORE OFFERING
NAME OF BENEFICIAL OWNER SERIES A SERIES B SERIES K OFFERING (2) OFFERING (2)
- ------------------------ ---------- ---------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
TCI(3).................. 31,060,000 15,400,000 -- 39.1% 38.9% 71.9% 71.5%
Comcast(4).............. 14,557,300 -- -- 12.2 12.0 5.7 5.6
Cox(5).................. 14,557,300 -- -- 12.2 12.0 5.7 5.6
Cablevision(6).......... 10,946,936 -- -- 8.4 8.3 4.1 4.0
KPCB(7)................. -- -- 6,438,830 5.4 5.3 2.5 2.5
Thomas A. Jermoluk(8)... 2,801,000 -- 1,000,000 3.2 3.1 1.5 1.5
Rogers(9)............... 1,761,286 -- -- 1.5 1.4 * *
Shaw(10)................ 1,622,395 -- -- 1.4 1.3 * *
William R. Hearst
III(11)................ 585,499 -- -- * * * *
Milo S. Medin(12)....... 563,000 -- -- * * * *
Kenneth A. Goldman(13).. 421,000 -- -- * * * *
Donald P. Hutchison(14). 348,000 -- -- * * * *
L. John Doerr(15)....... 345,481 -- -- * * * *
David P. Bagshaw(16).... 341,000 -- -- * * * *
Dean A. Gilbert(17)..... 320,524 -- -- * * * *
James L. Barksdale(18).. 84,786 -- -- * * * *
John C. Malone(19)...... 23,000 -- -- * * * *
David M. Woodrow(20).... 9,750 -- -- * * * *
Bruce W. Ravenel(21).... 5,000 -- -- * * * *
Brian L. Roberts(22).... 2,500 -- -- * * * *
Joseph W. Cece(23)...... -- -- -- -- -- -- --
Leo J. Hindery, Jr.(24). -- -- -- -- -- -- --
Larry E. Romrell(25).... -- -- -- -- -- -- --
James R. Shaw(26)....... -- -- -- -- -- -- --
All directors and
executive officers as a
group (22 persons)(27). 6,524,541 -- 1,000,000 6.3% 6.2% 2.9% 2.9%
</TABLE>
- --------
* Less than 1% of the Company's outstanding Common Stock.
(1) Percentage ownership is based on 118,898,344 shares of Common Stock
outstanding as of June 30, 1998, and 121,398,344 shares outstanding after
the offering. All shares subject to options and warrants exercisable
within 60 days after June 30, 1998 are deemed to be beneficially owned by
the person or entity holding such options or warrants and to be
outstanding solely for calculating such person's or entity's percentage
ownership. Unless otherwise indicated below, the persons and entities
named in the table have sole voting and sole investment power with
respect to all shares beneficially owned, subject to community property
laws where applicable.
(2) Assumes the Underwriters' over-allotment option to purchase up to 375,000
shares of Series A Common Stock is not exercised.
(3) Represents shares of Series A Common Stock and Series B Common Stock held
by TCI Internet Holdings, Inc., a wholly owned subsidiary of TCI. TCI
disclaims beneficial ownership of all shares held by Dr. Malone and Mr.
Ravenel. It is expected that TCI will purchase 800,000 shares of the
Series A Common Stock offered hereby, and the "After Offering"
percentages reflect this expected purchase. The address of TCI is 5619
DTC Parkway, Englewood, Colorado 80111.
(4) Represents shares of Series A Common Stock held by Comcast PC
Investments, Inc., a wholly owned subsidiary of Comcast. Comcast
disclaims beneficial ownership of all shares held by Mr. Roberts. The
address of Comcast is 1500 Market Street, 35th Floor, Philadelphia,
Pennsylvania 19102.
(5) Represents shares of Series A Common Stock held by Cox@Home, Inc., a
wholly owned subsidiary of Cox. Cox disclaims beneficial ownership of all
shares held by Mr. Woodrow. The address of Cox is 1400 Lake Hearn Drive,
Atlanta, Georgia 30319.
(6) Represents warrants to purchase 10,946,936 shares of Series A Common
Stock. Of these shares, 10,231,298 are immediately exercisable and the
balance will become exercisable as and to the extent certain Connecticut
cable systems are transferred to Cablevision from TCI and its controlled
affiliates. The address of Cablevision is One Media Crossways, Woodbury,
New York 11797.

34
<PAGE>

(7) Represents 6,116,890 shares of Series K Common Stock held by Kleiner
Perkins Caufield & Byers VII ("KPCB VII") and 321,940 shares of Series K
Common Stock held by KPCB Information Sciences Zaibatsu Fund II ("KPCB
Info."). KPCB VII and KPCB Info. disclaim beneficial ownership of all
shares held by Messrs. Doerr and Hearst outside of these funds. The
address of KPCB VII and KPCB Info. is Kleiner Perkins Caufield & Byers,
2750 Sand Hill Road, Menlo Park, California 94025.
(8) Mr. Jermoluk is the Company's Chairman of the Board, President and Chief
Executive Officer. Of these shares, 1,562,500 were subject to repurchase
at June 30, 1998.
(9) Represents 1,420,000 shares of Series A Common Stock and currently
exercisable warrants to purchase 341,286 shares of Series A Common Stock
held by Rogers, a wholly owned subsidiary of Rogers Communications, Inc.
(10) Represents 1,100,000 shares of Series A Common Stock and currently
exercisable warrants to purchase 522,395 shares of Series A Common Stock
held by Shaw, a wholly owned subsidiary of Shaw Communications, Inc.
(11) Mr. Hearst, the Company's Vice Chairman of the Board, is a general
partner of KPCB, which is the general partner of the general partner of
KPCB VII and KPCB Info. Mr. Hearst disclaims beneficial ownership of the
shares held by KPCB VII and KPCB Info.
(12) Mr. Medin is the Company's Senior Vice President and Chief Technology
Officer. Of these shares, 149,040 were subject to repurchase at June 30,
1998.
(13) Mr. Goldman is the Company's Senior Vice President and Chief Financial
Officer. Of these shares, 233,751 were subject to repurchase at June 30,
1998.
(14) Mr. Hutchison is the Company's Senior Vice President and General Manager,
@Work Group. Of these shares, 266,667 were subject to repurchase at June
30, 1998, and 25,000 were subject to options that are exercisable on
August 30, 1998 but, if exercised, 18,750 are subject to repurchase.
(15) Mr. Doerr, a director of the Company, is a general partner of KPCB, which
is the general partner of the general partner of KPCB VII and KPCB Info.
Of the shares of Series A Common Stock reported by Mr. Doerr, 133,763 are
held in trusts for which Mr. Doerr disclaims beneficial ownership except
to the extent of any indirect pecuniary interest therein. Mr. Doerr
disclaims beneficial ownership of the shares held by KPCB VII and KPCB
Info.
(16) Mr. Bagshaw is the Company's Senior Vice President and General Manager,
@Media Group. Of these shares, 243,450 were subject to repurchase at June
30, 1998, and 25,000 were subject to options that are exercisable on
August 30, 1998 but, if exercised, 18,750 are subject to repurchase.
(17) Mr. Gilbert is the Company's Senior Vice President and General Manager,
@Home Group. Of these shares, 182,864 were subject to repurchase at June
30, 1998, and 50,000 were subject to options that are exercisable on
August 30, 1998 but, if exercised, 37,500 are subject to repurchase.
(18) Mr. Barksdale, a director of the Company, is the President and Chief
Executive Officer of Netscape.
(19) Mr. Malone, a director of the Company, is Chairman and Chief Executive
Officer of TCI. Mr. Malone disclaims beneficial ownership of the shares
held by TCI.
(20) Mr. Woodrow is the Senior Vice President of Broadband Services of Cox and
serves as its designee as a Series B Director of the Company. Mr. Woodrow
disclaims beneficial ownership of the shares held by Cox.
(21) Mr. Ravenel is Executive Vice President Interactive Ventures of TCIC and
serves as TCI's designee as a Series B Director of the Company. Mr.
Ravenel disclaims beneficial ownership of the shares held by TCI.
(22) Mr. Roberts is the President of Comcast and serves as its designee as a
Series B Director of the Company. Mr. Roberts disclaims beneficial
ownership of the shares held by Comcast.
(23) Mr. Cece, a director of the Company, is Senior Vice President, Strategic
Planning of Cablevision. Mr. Cece disclaims beneficial ownership of the
shares held by Cablevision.
(24) Mr. Hindery is President and Chief Operating Officer of TCI and serves as
its designee as a Series B Director of the Company. Mr. Hindery disclaims
beneficial ownership of the shares held by TCI.
(25) Mr. Romrell is Executive Vice President of TCI and serves as its designee
as a Series B Director of the Company. Mr. Romrell disclaims beneficial
ownership of the shares held by TCI.
(26) Mr. Shaw, a director of the Company, is President and Chief Operating
Officer of Shaw. Mr. Shaw disclaims beneficial ownership of the shares
held by Shaw.
(27) Includes all of the shares shown in the table and an additional 674,001
shares of Series A Common Stock held by four other executive officers. Of
these shares, 459,618 were subject to repurchase at June 30, 1998, and
55,000 were subject to options that are exercisable at August 30, 1998,
but, if exercised, 41,250 are subject to repurchase.

35
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Morgan Stanley &
Co. Incorporated, Goldman, Sachs & Co., BT Alex. Brown Incorporated and
Hambrecht & Quist LLC are acting as representatives (the "Representatives"),
has severally agreed to purchase from the Company, the respective numbers of
shares of Series A Common Stock set forth opposite its name below. In the
Purchase Agreement, the several Underwriters have agreed, subject to the terms
and conditions set forth therein, to purchase all of the shares of Series A
Common Stock offered hereby if any of such shares are purchased. In the event
of default by an Underwriter, the Purchase Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased or the Purchase Agreement may be terminated.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................. 460,000
Morgan Stanley & Co. Incorporated................................. 460,000
Goldman, Sachs & Co. ............................................. 460,000
BT Alex. Brown Incorporated....................................... 460,000
Hambrecht & Quist LLC............................................. 460,000
Cazenove Incorporated............................................. 50,000
ING Barings Furman Selz LLC....................................... 50,000
TD Securities (USA) Inc. ......................................... 50,000
Wit Capital Corporation........................................... 50,000
---------
Total........................................................ 2,500,000
=========
</TABLE>

The Representatives have advised the Company that the Underwriters propose
initially to offer the shares of Series A Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus, and to
certain dealers at such price less a concession not in excess of $1.38 per
share. The Underwriters may allow, and such dealers may reallow, a discount
not in excess of $.10 per share to certain other dealers. After the public
offering, the public offering price, concession and discount may be changed.
It is expected that TCI will purchase 800,000 shares of the Series A Common
Stock offered hereby.

The Company has granted to the Underwriters an option exercisable for 30
days after the date of this Prospectus, to purchase up to an aggregate of
375,000 additional shares of Series A Common Stock at the public offering
price set forth on the cover page of this Prospectus, less the underwriting
discount. The Underwriters may exercise such option only to cover over-
allotments, if any, made in connection with the sale of Series A Common Stock
offered hereby. To the extent that the Underwriters exercise this option, each
Underwriter will have a firm commitment, subject to certain conditions, to
purchase approximately the same percentage thereof which the number of shares
of Series A Common Stock to be purchased by it shown in the above table is of
the 2,500,000 shares of Series A Common Stock initially offered hereby. If
purchased, the Underwriters will offer such additional shares on the same
terms as those on which the 2,500,000 shares are being offered.

Until the distribution of the Series A Common Stock is completed, the rules
of the Commission may limit the ability of the Underwriters and certain
selling group members (if any) to bid for and purchase the Series A Common
Stock. As an exception to these rules, the Representatives are permitted to
engage in certain transactions that stabilize the price of the Series A Common
Stock. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Series A Common Stock.

If the Underwriters create a short position in the Series A Common Stock in
connection with the offering (i.e., if they sell a greater number of shares of
Series A Common Stock than is set forth on the cover page of this Prospectus),
the Representatives may reduce that short position by purchasing shares of
Series A Common Stock in the open market. The Representatives may also elect
to reduce any short position by exercising all or part of the over-allotment
option described above.

36
<PAGE>

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Series A Common
Stock. In addition, neither the Company nor any of the Underwriters makes any
representation that the Representatives will engage in such transactions or
that such transactions, once commenced, will not be discontinued without
notice.

In connection with this offering, the Underwriters or their respective
affiliates and selling group members (if any) who are qualified market makers
on Nasdaq may engage in "passive market making" in the Series A Common Stock
on the Nasdaq National Market in accordance with Rule 103 of Regulation M
under the Exchange Act. Rule 103 permits, upon the satisfaction of certain
conditions, underwriters and selling group members participating in a
distribution that are also Nasdaq market markers in the security being
distributed (or a related security) to engage in limited market making
transactions during the period when Regulation M under the Exchange Act would
otherwise prohibit such activity. Rule 103 prohibits underwriters and selling
group members engaged in passive market making generally from entering a bid
or effecting a purchase at a price that exceeds the highest bid for those
securities displayed on the Nasdaq National Market by a market maker that is
not participating in the distribution. Under Rule 103, each underwriter or
selling group member engaged in passive market making is subject to a daily
net purchase limitation equal to 30% of such entity's average daily trading
volume during the two full consecutive calendar months immediately preceding
the date of the filing of the registration statement under the Securities Act
pertaining to the security to be distributed (or such related security).

The Company, the directors and executive officers of the Company, the
Principal U.S. Cable Partners and certain other stockholders of the Company
have agreed not to offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file or cause to be filed a registration statement
under the Securities Act with respect to, any shares of Series A Common Stock,
securities convertible into, exchangeable for or repayable with such shares or
rights or warrants to acquire such shares, for 90 days after the date of this
Prospectus (for the Company) or until October 19, 1998 (for the other
individuals and entities), without the prior written consent of Merrill Lynch,
except that the Company may, without such consent, grant options pursuant to
its benefit plans or issue shares of Series A Common Stock upon exercise of
options currently outstanding.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments the Underwriters may be required to make in respect
thereof.

LEGAL MATTERS

The validity of the shares of Series A Common Stock offered hereby will be
passed upon for the Company by Fenwick & West LLP, Palo Alto, California.
Fenwick & West LLP holds an option to purchase 18,750 shares of Series A
Common Stock of the Company. Certain legal matters will be passed upon for the
Underwriters by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California.

EXPERTS

The consolidated financial statements of At Home Corporation appearing in At
Home Corporation's Annual Report (Form 10-K) for the year ended December 31,
1997 have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.

37
<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy and information statements,
and other information with the Commission. Such reports, proxy and information
statements, and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C., as well as the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois, and Seven World Trade Center, Suite 1300, New York, New
York. Copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Company's Series A Common Stock is listed on the Nasdaq
National Market. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements, and other information filed through
the Commission's Electronic Data Gathering, Analysis and Retrieval System.
This Web site can be accessed at http://www.sec.gov.

The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Series A Common Stock
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits thereto, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and such
Series A Common Stock, reference is made to the Registration Statement and the
exhibits thereto. Statements contained in this Prospectus as to the contents
of any contract or any other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference. Copies of
the Registration Statement, including all exhibits thereto, may be inspected
without charge at the Commission's principal office in Washington, D.C., and
copies of all or any part thereof may be obtained from such office after
payment of fees prescribed by the Commission.

38
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SERIES A COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 6
Use of Proceeds............................................................ 16
Dividend Policy............................................................ 16
Price Range of Series A Common Stock....................................... 16
Business................................................................... 17
Management................................................................. 29
Principal Stockholders..................................................... 34
Underwriting............................................................... 36
Legal Matters.............................................................. 37
Experts.................................................................... 37
Available Information...................................................... 38
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

2,500,000 SHARES

[LOGO OF @HOME NETWQRK]

SERIES A COMMON STOCK

---------------

PROSPECTUS

---------------

MERRILL LYNCH & CO.

MORGAN STANLEY DEAN WITTER

---------------

GOLDMAN, SACHS & CO.

BT ALEX. BROWN

HAMBRECHT & QUIST

AUGUST 12, 1998

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------