Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: tech101 who wrote (17191)	10/11/2006 4:15:18 AM
From: Frank A. Coluccio	Read Replies (2) \| Respond to of 46821

Tech101, I'm not sure what approach (build or buy) or which carrier (Broadwing, Level3, XO, etc.) would appeal to Google at this point, but I've got some ideas concerning what they'd want in the end state. I can tell you without any hesitation, however, that Broadwing's customer base is not only not attractive to Google, but if Google were to acquire Broadwing, they would have to dump those legacy customers onto someone else. I can't think of a single motivation that would prompt Google into agreeing to acquire and maintain Class 5 end office switches, ATM & Frame Relay networks and SONET rings, which are all in addition to, or intermixed with, its IP network. At the present time those are all of the transmission and switching modes still sitting atop Broadwing's fiber. Do I agree with your premise on the grounds of financial merit? Yes, there's no denying those numbers appear very attractive. Although, there's more to doing an acquisition of this type from strategic and tactical perspectives than price. For example, reach, overall capacity, and the number of data centers and metro fiber networks owned, not to mention existing peering terms with both domestic and international Tier Ones. Remember, Level3 has a substantial presence on transoceanic routes and in metro settings overseas. But, even if a bake off that used all of these factors as criteria between LVLT and BWNG resulted in a draw, I still don't think that your argument is strong enough to nullify the downsides associated with legacy factors that I've listed above. Of course, I could be all wrong. Fwiw, I suspect that this issue will be put to rest before long, because the meteoric growth patterns of both companies, combined, even barring anything else that comes along - which often occurs when you least expect it - will reach a point where they must undergo a step function by some order of magnitude to the next level of capacity availability. FAC