Will acquire 100% of New Edge Networks in a merger transaction for approximately $144 million; acquisition expected to close in the first quarter of 2006.

EarthLink, an Internet service provider (ISP), today announced the execution of a definitive agreement to acquire New Edge Networks, a privately-held single-source provider of private Virtual Private Networks (VPNs) and secure multi-site managed data networks and dedicated access for businesses and communications carriers.

Under the terms of the agreement, EarthLink will acquire 100 percent of New Edge Networks in a merger transaction for approximately $144 million, consisting of 2.6 million shares of EarthLink common stock and $114.3 million in cash, including cash to be used to satisfy certain liabilities. The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to close in the first quarter of 2006.

EarthLink plans to retain New Edge Networks' 345 employees and the New Edge Networks brand and operate the company as a wholly-owned subsidiary of EarthLink. New Edge Networks will continue to be based in Vancouver.

"New Edge Networks is a tremendous growth platform for EarthLink to compete in the rapidly expanding SME networking market," said Bill Heys, President of EarthLink's value and small to medium enterprises business unit. "This acquisition builds upon our existing suite of award-winning services for small businesses and gives New Edge Networks the added resources to strengthen its market position."

"When we bring together EarthLink's financial resources and reputation for outstanding customer service with our national network and proven track record of performance, we will be uniquely positioned for serving our customers and tapping the growing market for business networks," said Dan Moffat, President and CEO of New Edge Networks. "We believe this transaction benefits customers, investors and employees of both companies."