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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: jach who wrote (26002)	5/27/1999 7:40:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 77400

Cisco, Microsoft buy stake in Net exchange company REDWOOD CITY, Calif., May 26 (Reuters) - Cisco Systems Inc. <CSCO.O> and Microsoft Corp. <MSFT.O> are among investors in a new company that plans to build up to 35 Internet business exchanges worldwide to interconnect leading Web firms. The investment group, which also includes Benchmark Capital, has put $12.4 million into Redwood City, Calif.-based Equinix Inc., which plans to open three U.S. exchanges by the end of 1999, Equinix said in a statement. The Equinix facilities will act as exchange hubs for companies that provide Internet services, sell Web content and operate communications networks. These companies, which in essence form the Internet, will locate hardware in exchanges as a way to link their networks with those of other companies -- for instance an Internet service outsourcing its e-mail service to another Web firm. As independents, the Equinix exchanges would allow Internet companies to connect with other companies without running traffic through phone company networks. Most of the Internet exchanges owned by telecommunications companies encourage customers to run connections through their networks or those of other service providers, said Tom Nolle, president of research firm CIMI Corp. "We're neutral in the sense we're not in any of these businesses," said Equinix Chief Executive Officer and founder Al Avery, who together with Equinix Chief Technology Officer and co-founder Jay Adelson helped set up the well-known Palo Alto Internet Exchange, or PAIX. Adelson said Equinix services would cut down the cost of linking networks and offer badly needed additional capacity for the electronic commerce market. Unlike PAIX, which AboveNet Communications Inc. <ABOV.O> agreed to buy from Compaq Computer Corp. <CPQ.N> on Monday for about $75 million, Equinix exchanges will not link companies to the Net, but interconnect companies that already form the Web. Equinix will generate revenue by charging for space to locate companies' network computers and for interconnections like switches and routers that link those computers. The first operation to open in the Washington D.C. area will be between 30,000 square feet and 150,000 square feet, depending on demand. The PAIX exchange is around 10,000 square feet. Avery declined to name specific companies Equinix had signed up but said the number of leading ISPs, communications carriers and content providers was well into double figures. Equinix plans to build 15 facilities across the United States and start international expansion, either in Europe or Asia, around mid-year 2000. Adelson valued the Web business exchange market at between $4 billion and $6 billion by 2002. He said it could be worth as much as $2 billion in 1999. Asked if Equinix would consider an initial public offering of stock within 12 months, Avery said the company was not ruling out the possibility but had set no timeframe for such a process. In a mid-afternoon rally by technology and Internet issues, shares of Cisco were up $3.69 at $108.06 while Microsoft was up $1.25 at $77.56.