AboveNet Buys Compaq Unit
AboveNet Communications Inc., San Jose, Calif., said Monday it agreed to buy the Palo Alto Internet Exchange from Compaq Computer Corp. for about $75 million. AboveNet, a maker of products designed to improve electronic-commerce transactions and Internet traffic, said the purchase consists of $70 million cash and a pact to provide certain ongoing services. AboveNet uses so-called Internet-service exchanges like Palo Alto to provide direct access to the Internet, cutting down on the number of network connections a company needs to send and receive data. The majority of exchanges are owned by telecommunications companies that require Internet-service providers to buy lines from the company, but the Palo Alto exchange has an open business policy that offers customers a choice of line carriers, as well as encourages ISPs to connect directly to each other within the exchange, AboveNet said. The company said it will rename the exchange the Public Access Internet Exchange and operate it as a separate unit having its own board and retaining its current management.
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