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Technology Stocks : CORR - Corridor Communications Corporation

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To: jmhollen who started this subject	6/16/2004 7:48:09 PM
From: jmhollen	of 179

Wi-Fi Basics: Taking a page from the ISP business In the mid 1990’s, EarthLink created a segmentation map to plot its course in a rapidly evolving ISP industry. Unlike all previous companies attempting to provide nationwide ISP service, EarthLink elected not to build its own coast-to-coast network. Instead, it partnered with UUNET and other infrastructure providers who were operating carrier-class systems. In the early years, this strategy left people scratching their heads. “An ISP without a network?” they asked. Instead of spending time and money building a big network, EarthLink focused on providing great software, support and service to its customers, and it left the network build-out to specialist companies who were great at that business – and who got economies of scale by also being focused. This focused strategy turned out to be a huge success and ultimately became the model for the whole ISP industry. In contrast, ISPs who tried to stay vertically integrated either stayed small, were consolidated or went out of business. EarthLink’s segmentation map had three primary industry layers. The physical layer companies owned the physical infrastructure, such as phone and cable lines. They sold to the next layer up, the network layer companies that built and operated Internet backbones with hundreds of points of presence around the country. Those companies in turn sold to the brand layer companies on the top of the stack who served end users. Here’s the model showing a sampling of one or two companies at each layer: boingo.com Instead of trying to vertically integrate and do it all, the most successful industry players focused primarily on one layer of the stack. Fierce competition occurred within each layer, and strong partnerships evolved between the layers. .

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