IPOS
The latest run of the IPO market has brought a few newly conceived businesses into stark relief. Portals, auction sites, and ecommerce players have all become accepted businesses, even if the valuations seem to defy gravity. But that's the old news. With an IPO market that shows few signs of cooling, the question becomes: Who will win IPO riches during the coming months?
One way to answer that question is to follow the data. If you trace the packets, you'll find that all the now-big Net players are banking on advanced broadband services to keep the revenues streaming in. As the AOL-Netscape deal shows, the portals are looking to expand into the workplace. And one of the conclusions that can be drawn from the @Home-Excite deal is that content players are intent on realizing the promise of broadband. In order for these investments to pay off, offices will have to be connected to high-speed networks.
Right now there's a war going on in the telecom industry. Competing technologies - ISDN, T1, xDSL, and cable - are vying for a foothold in today's office. Not surprisingly, the large ILECs (incumbent local exchange carriers, such as SBC) have been slow to move into this market. But data CLECs, or competitive local exchange carriers, are moving fast to bridge the chasm between slow dialup modems and expensive T1 connections.
Several outfits are poised to roll out high-bandwidth services at a lower price than current T1 offerings. Covad Communications recently enjoyed a successful IPO. NorthPoint Communications and Rhythms NetConnections, both privately held, have been making impressive moves - Rhythms, for example, in January announced a strategic partnership with MCI WorldCom. Expect the data CLEC market to heat up - and it may not be long before Rhythms and NorthPoint are also off to the IPO races.
Covad Communications: www.covad.com.
NorthPoint Communications: www.northpointcom.com.
Rhythms NetConnections: www.rhythms.net.
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