It was the morning of Jan. 14, and Tom Jermoluk was ticked off. For a month, the boyish, irascible CEO of AtHome had been negotiating to buy Excite (ATHM), the company's next-door neighbor in Redwood City, Calif. For the first time, though, the talks seemed out of sync. Excite CEO George Bell was also negotiating with Yahoo (YHOO), sometimes talking with Tim Koogle, Jeff Mallett and Jerry Yang one hour and Jermoluk the next.

To the fiery Jermoluk, a 6-foot-4-inch Silicon Valley golden boy, it seemed AtHome wasn't Bell's first choice.

"What I want from you guys is for you to show me that you're serious about working with us, and [that] we're not just a second option," Jermoluk told Bell, according to another person involved in the talks.

Not long after Jermoluk's ultimatum - that same afternoon, in fact - Bell huddled with Excite's board. They decided to give Jermoluk a chance to close a deal without interruption from rival bidders. Jermoluk suggested a 6 p.m. meeting at Wilson Sonsini Goodrich & Rosati (dossier), the law firm representing AtHome on the deal. Bell agreed and brought Excite's lawyers from Fenwick & West.

The executives, lawyers, bankers and accounts descended on Wilson Sonsini's Palo Alto offices. Excite's team huddled in one room, AtHome's team in another down the hall. Connected to both of those rooms is a third room, where Bell and Jermoluk spent six hours hammering out the details of a merger. About midnight, a grim-faced Jermoluk stomped from the main meeting room shouting angrily at Bell, "... and don't even think about calling me again!"

The blood drained from the faces of his associates.

He was kidding. Bell and Jermoluk had closed the deal.

That concluded a frantic month in which both companies had talked merger with a variety of potential partners. Excite held talks with Microsoft (MSFT), Yahoo, Sony (dossier) and America Online (dossier). AtHome, meanwhile, held what Jermoluk calls "serious" discussions with two media entities. Despite their geographic proximity and their common membership in the club of Silicon Valley firms backed by venture capital power Kleiner Perkins Caufield & Byers (dossier), it was only late in the game that the two companies - partly at the urging of Kleiner partner John Doerr - seriously considered one another.

In the end, AtHome agreed to acquire Excite, worth $6.3 billion at the close of market last Thursday. (Terms of the agreement call for each Excite share to be exchanged for 1.041902 shares of AtHome.) It's the biggest deal in the short history of the Internet and eclipses the $4.2 billion in stock AOL (dossier) will issue to buy Netscape.

The deal, expected to close in three months, dramatically changes AtHome, which until now has focused on providing Internet access via cable television networks. The acquisition expands the company's business into the narrowband world, giving it one of the most visited sites on the Web and a better-known consumer brand. Jermoluk says AtHome has tentatively decided to rename its consumer cable service Excite AtHome. The company also plans to replace the current AtHome opening screen with a version of the Excite home page, which Jermoluk says has 90 percent more functionality than AtHome's. Buying a portal, rather than trying to build one, saved the company two to three years, he contends.

Jermoluk also seems excited about acquiring MatchLogic, an Excite subsidiary with expertise in targeting online advertising. Some observers see the deal as a sign broadband Internet access is coming of age; cynics might conclude that AtHome is hedging its bets against any slower-than-expected consumer acceptance of Internet access over cable. Jermoluk says he first saw the need to cozy up to a Web media company a year ago, when ATT (T) announced plans to buy the cable giant Tele-Communications Inc. TCI owns 39 percent of AtHome, and thus the deal meant the phone behemoth would soon be AtHome's controlling shareholder.

Not long after that, Bell and Jermoluk met informally, without specifically discussing a merger. But the late November announcement of America Online's proposed acquisition of Netscape scared both CEOs. Jermoluk was convinced he had to find a content partner, and fast. Starting with a wide search, AtHome quickly narrowed the field to six potential partners, and then whittled the list to three in December.

Just before Christmas, Jermoluk got his board's permission to conclude a deal with any one of the three finalists, though he claims that "all along, Excite was the No. 1 choice." Jermoluk says it made more sense to buy a content company rather than set up a partnership. "That's easy," he says with a characteristic wave of the hand. "A merger means you have alignment. It means that when you need to implement a strategy, you never have to question your partner to make sure they don't have a conflicting strategy. We have the same profiles, interfaces and technology."

Bell, meanwhile, was also analyzing the consequences of the AOL-Netscape deal and trying to determine if Excite, as it was then configured, could grow fast enough to keep up. His conclusion: Excite couldn't go it alone.

"There was no point for us to try and out-Yahoo Yahoo," says Bell, who already sports a watch with the AtHome logo on the face. "There was just no breakout strategy there, and I felt really burdened by that."

In the first week of December, John Doerr stepped in. The Kleiner partner played a key role in launching AtHome and sits on the company's board. He encouraged Bell to talk to Jermoluk about a possible partnership. Excite's board includes Kleiner's Vinod Khosla.

Bell says he'd never thought of AtHome as a potential parent company, though he thought a content-distribution deal might make sense. Jermoluk shared with Bell how much AT&T planned to spend on upgrading TCI's cable systems. Bell says those discussions got him thinking about a closer relationship with AtHome.

By this time, Bell was not only talking with AtHome, but also with Microsoft, Yahoo, AOL and a major media company, which sources say was Sony.