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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Alok Sinha who wrote (6129)	5/29/1998 1:07:00 PM
From: Bottomfisher	Read Replies (4) \| Respond to of 6980

Up until today's leak about the restructuring, I was a big believer that a strategic combination with merger-hungry NT or LU made sense for BAY. However, I have to wonder if senior management would go through such an extensive restructuring (announced right in the midst of what are supposedly hot merger talks) if they were going to be integrating with NT soon. The disruption from such a restructuring can harm a company already wracked with decelerating low-end switch and shared media sales (not to mention the Asian economy and CSCO's further success at the enterprise level). And the talk about missing the quarter falls in line with CSCO's Chambers' comments today in which he lowered growth expectations due to Asian orders falling off a cliff. Will be interesting to watch ... PC Magazine Breaking Story: Reorganization under way at Bay Networks 05.28.98 3:39 pm ET Bay Networks Inc. this week restructured its business, combining its Internet and Telecom Business Group and Enterprise Business Group. The new entity, called the Products Group, will take on all product development and management for both carrier and enterprise hardware and software. The sales forces for the two groups will also be combined over the coming weeks. Employees were informed of the move on Tuesday. The reorganization could signal a repositioning in anticipation of a merger with a large carrier vendor. Bay was linked recently with Northern Telecom Ltd. as a potential partner. That deal foundered, however, because of a difference of opinion about price, according to sources. Some observers now think Bay could hook up with a carrier vendor such as Alcatel Data Networks. Although Bay officials would not comment on merger speculation, a spokesman for the Santa Clara, Calif., company said the reorganization was undertaken to better address evolving customer needs and improve management of the entire product line. "There was a lot of disconnect between the two groups," said one industry observer familiar with the reorganization. "But if they want to be in the service provider space, they may lose their focus by merging the two groups unless another group is coming in."