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To: BillyG who wrote (29022)	2/1/1998 11:33:00 PM
From: CPAMarty	Respond to of 50808

Venture capitalists predict wins By Dawn Yoshitake January 29, 1998, 6:10 p.m. PT FOLLOW THIS LINK FOR THE WHOLE STORY news.com SAN FRANCISCO--Venture capitalists at the NationsBanc Montgomery Securities 15th annual Technology Week conference here today are placing their bets on broadband and infrastructure as among the most promising technology investments of the future. "Broadband access will be a great market," said Geoffrey Yang, a general partner with Institutional Venture Partners. Yang also pointed to cable, satellite, and digital subscriber licenses as growth markets. Yang was joined on a panel at today's investor conference by John Doerr, partner with Kleiner Perkins Caufield and Byers, and Michael Moritz, a general partner with Sequoia Capital . Doerr, whose firm is an investor in @Home predicted that cable would dominate in the race to bring broadband service to consumers in a big way. He cited one instance, however, in which his firmed guessed wrong in its effort to predict the next great technology victory. "We were way early on pen computing and we were way wrong," Doerr said of his company's expectation that pen devices ultimately would replace the mouse. Moritz, for his part, also pointed to broadband as a technology with great revenue potential, but said merchandising on the Internet is the area investors should be watching most closely. "It's all about merchandising," Moritz said. Venture capital hit a record $3.57 billion in the third quarter, with high-tech companies attracting $2.3 billion of the total amount, according to a Price Waterhouse survey. As usual, software and communications companies attracted the bulk of VC investments. Internet infrastructure also will play an important role in future investing, Yang said, as more corporations come to depend on the Internet to run their operations, and to facilitate customer and vendor relations. He noted that his firm has taken a holistic approach toward selecting infrastructure deals, meaning that it looks simultaneously at core network technologies, like routers, switches, peripherals, and network access, rather than waiting for one aspect of the equation to catch up with the others.

To: BillyG who wrote (29022)	2/2/1998 8:59:00 AM
From: CPAMarty	Read Replies (2) \| Respond to of 50808

multichannel.com AT&T Still Eyeing Cable Deals By KENT GIBBONS & LESLIE ELLIS Last Monday's AT&T Corp. analyst meeting came and went with no big cable deals announced, but senior MSO executives insisted that talks are ongoing about possible Internet and telephony projects involving operators and AT&T. AT&T chairman Michael Armstrong has already pulled the trigger on AT&T's purchase of Teleport Communications Group, which is mostly owned by Tele-Communications Inc., Comcast Corp. and Cox Communications Inc. That deal, signed just a couple of weeks before AT&T's long-planned analyst meeting, set back talks between AT&T and TCI-controlled At Home Corp., parent company of high-speed-data service @Home Network, one person involved in the talks said. There were indications last week that AT&T was probably talking with Time Warner Cable and U S West Media Group, as well as with At Home, investors in which also include Comcast, Cox and Cablevision Systems Corp. "I have always assumed [that AT&T executives] were talking with all of the major cable online players, and that they would make them the same offer," Bear Stearns & Co. telephone analyst William Deatherage said. Armstrong did have several positive things to say about the cable industry at last week's gathering of financial analysts in New York. Analysts and an AT&T spokesman related the fact that he considered cable an increasingly viable broadband option to tap consumer markets. And Armstrong said he was encouraged by cable upgrades. Deatherage thinks that cable deals are still in the works, and that the question is not "if," but "when" and "how." Armstrong "has talked favorably about the opportunities between AT&T and the cable industry continually for the last month to six weeks," the analyst said. "Not only does he want to build the scale of his Internet business as a strategic priority, but he still lacks an entry path to consumer local services, which is also a strategic imperative, given the fact that he has about $25 billion in consumer long-distance revenue to protect. I think that it's a matter of deciding how to structure a deal that's win-win," Deatherage said. One financial analyst, describing his reaction to the lack of specific AT&T and TCI news last Monday, said, "The silence was deafening," after receiving tips and rumors on the subject for the last two months. But executives close to the talks, who described themselves as being under "a serious gag order," said last week that AT&T's negotiations with TCI are not endangered -- just slowed by routine processes. What still remains shrouded are the specific contexts of the two deals long rumored to be in the works between the long-distance giant and TCI. Analysts are still expecting some sort of arrangement between AT&T and @Home, which is controlled by TCI, as well as a deal between the two companies that will give AT&T a telephony foothold in the local loop via TCI's cable drops. The @Home deal may take the form of an investment or AT&T fusing its WorldNet Internet service with @Home's network. The latter option raises questions about the value of having two national high-speed backbones, which "could be one reason why this didn't happen sooner," said one industry executive, who requested anonymity. Another analyst also speculated that AT&T may be conducting similar negotiations with the merging Road Runner/MediaOne Express service. Here's what Armstrong did announce last Monday: A rollout of AT&T WorldNet Voice, which enables Internet-protocol phone calls. A $1.6 billion cost-cutting target that means the elimination of up to 18,000 jobs, a salary freeze and a management reshuffle A turbo-charge of its existing 40,000 miles of SONET (synchronous optical network) plant by installing 80-wavelength "dense-wave-division multiplexors," made by Lucent Technologies Inc. That move will let AT&T become the first carrier to test and deploy a system that can carry more than 3 million calls on a single SONET fiber, according to company officials. The addition of 20 more fiber rings to its existing coast-to-coast network of 32 fiber rings; seven more high-capacity, 4ESS switches to its existing web of 136 switches; and 200 more "edge switches" for data-communications traffic.