EarthLink Inc. and Sprint Corp. said Friday they
have liberalized their three-year-old marketing and branding
alliance to give each company more flexibility to pursue deals with
The revised alliance ends exclusivity terms and allows Sprint
and EarthLink to drop each other's name from Internet products.
Sprint, which owns 27 percent of Atlanta-based EarthLink, also
relinquished two seats on the Internet service provider's board and
its right to buy EarthLink this year. Sprint retained the right to
bid against any competing offer for the company.
EarthLink said it will take an $11.3 million non-cash charge
this quarter to write off assets related to the previous alliance.
"Like any relationship, with time and experience, it can and
should be modified periodically to reflect the natural evolution
of the relationship," said EarthLink chief executive Garry Betty.
Sprint, based in Kansas City, Mo., said it will continue
marketing EarthLink-Sprint service to dial-up Internet customers
for now, but anticipates buying wholesale EarthLink access and
selling it as Sprint service in the future.
All EarthLink services now will be sold only with the EarthLink
"From our perspective, our Internet offerings are changing,"
Sprint spokeswoman Cindy Parks said. "We've got a broad and
expanding portfolio and we needed the flexibility to work with a
lot of partners."
Shares of EarthLink were up 91 cents, or 10 percent, to $9.81 in
afternoon trading on the Nasdaq Stock Market. Sprint shares were
down 59 cents at $24.06 on the New York Stock Exchange.