Good article in The Wall Street Urinal about Annunziata:
Dow Jones Newswires -- February 24, 1999
Exec Leaving AT&T For An Upstart Reflects Cultures At Both
By Shawn Young
NEW YORK (Dow Jones)--A top executive's departure from AT&T Corp. (T) to run a
globe-spanning telecommunications upstart called Global Crossing Ltd. (GBLX) is a victory for the
smaller company and a flag in the wind of change at AT&T.
Robert Annunziata is a 50-year-old entrepreneur who left AT&T early in his career only to return last
year when AT&T spent more than $11 billion to buy Teleport Communications Group Inc., the
competitive local phone company he founded and ran.
With the acquistion of his company, Annunziata became president of AT&T's $23 billion-a-year
business services unit. He was named chief executive of Global Crossing, based in Bermuda and Los
Angeles, on Wednesday.
His move is significant in an obvious way for Global Crossing and in a more nuanced one for AT&T,
analysts said.
"Everything Bob Annunziata has done in his career has turned out to be stellar," said Merrill Lynch &
Co. analyst Daniel Reingold. "He is a fantastic operator and builder of businesses and networks and
that's exactly where Global Crossing is in its history. I expect he'll make a major impact on Global
Crossing."
Global Crossing's shareholders apparently agreed. They bid the stock up 3 7/8, or 7.2%, to 57 1/2
on torrential Nasdaq volume of 1.9 million shares, compared to a daily average of 539,100.
The entrepreneurial culture at Global Crossing probably appealed to Annunziata, analysts said.
"He'd rather reign than serve, that's why he left AT&T the first time," said Kenneth McGee of Gartner
Group, a Stamford, Conn., consultancy.
Annunziata was not available for comment.
The effect of Annunziata's departure on AT&T, based in New York, is more subtle and symbolic.
The New York long-distance company is undergoing a profound transformation as Chairman and
Chief Executive C. Michael Armstrong attempts sweeping internal and strategic changes, including the
company's imminent merger with Denver-based cable giant Tele-Communications Inc. (TCOMA,
TCOMB), commonly known as TCI.
"Armstrong's fundamental challenge now is to create a core management team and create stability,"
said Brian Adamik of Yankee Group, a Boston consulting firm.
Annunziata's departure in itself is not a crushing blow to AT&T, nor is it uncommon for entrepreneurs
to leave after their companies have been bought, experts said.
"I'm not even sure this is going to show up on the Richter Scale" for AT&T, McGee said.
Certainly, AT&T shareholders took the news in stride. AT&T's NYSE-listed shares recently were
down 9/16, or 0.7%, to 85 3/8 on fairly typical volume of 7 million shares.
AT&T said it has named 50-year-old Michael Keith to the business services post. Keith is a 21-year
AT&T veteran who ran the division on an interim basis for part of last year and was instrumental in
forging AT&T's global joint venture with British Telecommunications PLC (BTY), an AT&T
spokeswoman said.
Annunziata had run AT&T's business services division since September, but some analysts
speculated that his style may have been a little too gritty for AT&T, and he may have found AT&T
still too bureaucratic for him.
As head of Teleport, which built its own network to serve giant businesses, including Merrill Lynch,
Annunziata remained intensely involved with the pragmatics of the network itself. That trait that
probably will serve him well at Global Crossing, which is building a global undersea fiber optic
communications network that will be the first to connect Asia, Latin America, North America and
Europe.
Annunziata's arrival signals that Global Crossing is maturing, said Phelps Hoyt, an analyst with KDP
Investment Advisors.
"With more operations, Global Crossing needed someone with operational skills for handling the
day-to-day needs of the company," Hoyt said.
Annunziata's appointment as chief executive does not mean Global Crossing is putting his
predecessor, Jack Scanlon, out to pasture. Scanlon becomes vice chairman.
"I think Scalon will be firmly in charge of the business strategy," said Hoyt. "He is good at making
deals and raising capital."
Annunziata's successor at AT&T, Keith, said in an interview he does not expect to make any radical
changes to the business division's goals or style.
After all, he was the one who made many of the plans the division is now executing, he said. As
interim leader for most of last year, he presided over intensive cost cutting and redirection of
resources toward data and other fast-growing parts of the business.
"I don't think it's something our of the blue," said Keith of his appointment.
He praised Annunziata's entrepreneurial spirit. |
