NorthPoint Communications

Last updated
NorthPoint Communications Group, Inc.
Founded1997;27 years ago (1997)
FounderMichael W. Malaga
Defunct2001;23 years ago (2001)
FateBankruptcy, assets acquired by AT&T
Headquarters California
Key people
Herman Bluestein
(Chief Development Officer)
Number of employees
506 (1999)

NorthPoint Communications Group, Inc. was a competitive local exchange carrier focused on data transmission via digital subscriber lines. The company had relationships with Microsoft, Tandy Corporation, Intel, Verio, Cable & Wireless, Frontier Corporation, Concentric Network, ICG Communications, Enron, Network Plus, and Netopia. The company had investments from The Carlyle Group, Accel Partners, Benchmark, and Greylock Partners. [1]

Contents

History

The company was founded in 1997 by Michael W. Malaga and 5 other former executives of Metropolitan Fiber Systems. [2]

On May 5, 1999, during the dot-com bubble, the company became a public company via an initial public offering in which it sold 15 million shares at $24 per share. [3] Malaga, then 34 years old, was worth $300 million on paper. [2]

In September 2000, Verizon agreed to acquire a 55% interest in the company and merge the companies' DSL businesses. [4]

In November 2000, as its customers failed to pay their bills, NorthPoint restated downwards its financial performance for the third quarter of 2000, lowering revenue from $30 million to $24 million. [5] [4] After the earnings restatement, Verizon terminated its acquisition agreement, claiming that a material adverse change had occurred. [4] Northpoint sued Verizon to force it to complete the transaction. [6] The lawsuit was settled out of court in July 2002, with Verizon agreeing to pay $175 million to Northpoint. [7] NorthPoint stated that "it would cut its workforce by 19%, or 248 jobs, to lower expenses after the collapse of its merger with Verizon." [8]

Bankruptcy

In January 2001, NorthPoint filed bankruptcy. [9] [10] [11] Some internet service providers, which faced a disruption in service, blamed the banks for failing to work out a deal to save the company. [12] In March 2001, AT&T Corporation acquired the assets of NorthPoint for $135 million in a liquidation. [13]

In many ways, the rise and fall of NorthPoint mirrors the fate of one of its chief competitors: Rhythms NetConnections.

Related Research Articles

<span class="mw-page-title-main">MCI Inc.</span> American telecommunications company (1983–2006)

MCI, Inc. was a telecommunications company. For a time, it was the second-largest long-distance telephone company in the United States, after AT&T. WorldCom grew largely by acquiring other telecommunications companies, including MCI Communications in 1998, and filed for bankruptcy in 2002 after an accounting scandal, in which several executives, including CEO Bernard Ebbers, were convicted of a scheme to inflate the company's assets. In January 2006, the company, by then renamed MCI, was acquired by Verizon Communications and was later integrated into Verizon Business.

<span class="mw-page-title-main">Regional Bell Operating Company</span> U.S. regional telephone company created by 1984 break of AT&T

A Regional Bell Operating Company (RBOC) was a corporate entity created as result of the antitrust lawsuit by the U.S. Department of Justice against the American Telephone and Telegraph Company (AT&T) in 1974 and settled in the Modification of Final Judgment on January 8, 1982.

<span class="mw-page-title-main">UUNET</span> Early U.S. Internet service provider

UUNET, founded in 1987, was one of the first and largest commercial Internet service providers and one of the early Tier 1 networks. It was based in Northern Virginia. Today, UUNET is an internal brand of Verizon Business.

Vonage is an American cloud communications provider operating as a subsidiary of Ericsson. Headquartered in Holmdel Township, New Jersey, the organization was founded in 1998 as Min-X as a provider of residential telecommunications services based on voice over Internet Protocol (VoIP). In 2001, the organization changed its name to Vonage.

<span class="mw-page-title-main">Whittman-Hart</span> Services company dealing with digital communications

Whittman-Hart was a services company dealing with digital communications. Founded in 1984, it grew steadily until 1999, when it acquired US Web/CKS, more than doubling its size. The combined company was re-corporated on March 1, 2000, with the new name of marchFIRST, inc. In May 2001, marchFIRST, which had declared bankruptcy a month earlier, was liquidated.

Cumulus Media, Inc. is a broadcasting company of the United States and is the third largest owner and operator of AM and FM radio stations in the United States behind Audacy and iHeartMedia. As of June 2019, Cumulus lists ownership of 428 stations in 87 media markets. It also owns and operates Westwood One. Its headquarters are located in Atlanta, Georgia. Its subsidiaries include Cumulus Broadcasting LLC, Cumulus Licensing LLC and Broadcast Software International Inc.

Encompass Health Corporation, based in Birmingham, Alabama, is one of the United States' largest providers of post-acute healthcare services, offering both facility-based and home-based post-acute services in 36 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. Effective January 2, 2018, the organization changed its name to Encompass Health Corporation and its New York Stock Exchange (NYSE) ticker symbol from HLS to EHC.

Charter Communications, Inc., is an American telecommunications and mass media company with services branded as Spectrum. With over 32 million customers in 41 states, it is the second-largest cable operator in the United States by subscribers, just behind Comcast, and the third-largest pay TV operator behind Comcast and AT&T. Charter is the fifth-largest telephone provider based on number of residential lines.

<span class="mw-page-title-main">Divine, Inc.</span>

Divine, Inc., originally Divine Interventures, was a company that invested in internet companies during the dot-com bubble. The company was originally modeled after CMGI but changed its business plan after the bubble burst.

<span class="mw-page-title-main">Frontier Communications</span> American telecommunications company

Frontier Communications Parent, Inc. is an American telecommunications company. Known as Citizens Utilities Company until 2000, Citizens Communications Company until 2008, and Frontier Communications Corporation until 2020, as a communications provider with a fiber-optic network and cloud-based services, Frontier offers broadband internet, digital television, and computer technical support to residential and business customers in 25 states. In some areas it also offers home phone services.

<span class="mw-page-title-main">Jeremy Allaire</span> American technologist and entrepreneur

Jeremy D. Allaire is an American technologist and Internet entrepreneur. He is CEO and founder of the digital currency company Circle and chairman of the board of Brightcove. With his brother JJ Allaire, he co-founded Allaire Corporation in 1995. Allaire Corp. had a successful IPO in January 1999 and was acquired by Macromedia in 2001. Allaire served as CTO of Macromedia after the acquisition and helped develop the Macromedia MX platform.

Snyder Communications Inc. (SNC) was an American advertising corporation founded in 1988 by Daniel Snyder and his sister Michelle Snyder. Their activities were mainly outsourced marketing services, such as direct marketing, database marketing, proprietary product sampling, sponsored information display in prime locations, call centers, and field sales.

Broadview Networks is a network-based electronically integrated communications provider serving small and medium-sized businesses in the Northeastern and Mid-Atlantic United States. The Company offers local, long-distance and international voice services; data services that encompass VPN and MPLS enabled offerings; hosted and premises-based VOIP systems; traditional telephone systems; and Internet access services using digital subscriber line (DSL) and related technologies.

<span class="mw-page-title-main">Vignette Corporation</span>

Vignette Corporation was a company that offered a suite of content management, web portal, collaboration, document management, and records management software. Targeted at the enterprise market, Vignette offered products under the name StoryServer that allowed non-technical users to create, edit and track content through workflows and publish it on the web. It provided integration for enterprise resource planning, customer relationship management and legacy systems, supporting Java EE and Microsoft.NET. Vignette's integrated development environment and application programming interface offered an alternative to conventional Common Gateway Interface/vi/Perl web development. StoryServer was used on many large websites including those of CNET, UnitedHealth Group, The Walt Disney Company, Wachovia, Martha Stewart, Fox News, National Geographic Channel, Pharmacia & Upjohn, MetLife, BSkyB, the 2004 Summer Olympics, and NASA.

Geeknet, Inc. is a Fairfax County, Virginia–based company that is a subsidiary of GameStop. The company was formerly known as VA Research, VA Linux Systems, VA Software, and SourceForge, Inc.

<span class="mw-page-title-main">Apollo Global Management</span> American private equity company

Apollo Global Management, Inc. is an American private equity firm. It provides investment management and invests in credit, private equity, and real assets. As of 2022, the company had $548 billion of assets under management, including $392 billion invested in credit, including mezzanine capital, hedge funds, non-performing loans, and collateralized loan obligations, $99 billion invested in private equity, and $46.2 billion invested in real assets, which includes real estate and infrastructure. The company invests money on behalf of pension funds, financial endowments, and sovereign wealth funds, as well as other institutional and individual investors.

<span class="mw-page-title-main">Verizon Communications</span> American telecommunications company

Verizon Communications Inc. is an American multinational telecommunications conglomerate. The company is incorporated in Delaware, and headquartered at 1095 Avenue of the Americas in Midtown Manhattan, New York City. Verizon's capital stock is a component of the Dow Jones Industrial Average.

<span class="mw-page-title-main">Qwest</span> Defunct American corporation

Qwest Communications International, Inc. was a United States telecommunications carrier. Qwest provided local service in 14 western and midwestern U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming.

Stargate Industries, Inc. was an Internet service provider that started in 1994, providing dial-up access in the Pittsburgh, Pennsylvania area. Stargate expanded its service territory and began offering other services as the company grew, such as dedicated Internet access using leased lines and DSL, data center services, co-location, and professional services, such as Web development. The company grew rapidly throughout the late 1990s through both organic growth and through the acquisitions of other providers, becoming the largest locally owned Internet service provider in western Pennsylvania, with customer count of nearly 100,000, and employing about 450 people at its peak.

References

  1. "NORTHPOINT COMMUNICATIONS GROUP INC (NPNT) IPO". NASDAQ.
  2. 1 2 Sinton, Peter (May 12, 1999). "The Cash Just Keeps Coming / NorthPoint founder stays grounded". San Francisco Chronicle .
  3. Vrana, Deborah (May 6, 1999). "This IPO Goes to Show: 'Dot-com' Is No Magic Bullet" . Los Angeles Times .
  4. 1 2 3 SCHIESEL, SETH (November 30, 2000). "Verizon Abandons NorthPoint Deal" . The New York Times .
  5. Young, Shawn (November 21, 2000). "NorthPoint Restates Earnings; Loss Could Affect Verizon Deal" . The Wall Street Journal .
  6. Lais, Sami (November 30, 2000). "Verizon, NorthPoint in heated dispute over DSL merger deal". Computerworld .
  7. "Verizon Agrees to Settle NorthPoint Merger Suits" . Los Angeles Times . Bloomberg News. July 24, 2002.
  8. Staff, T. S. C. (7 December 2000). "NorthPoint Communications Unmoved by Layoffs". TheStreet. Retrieved 2020-04-28.
  9. "NorthPoint files for Chapter 11". American City Business Journals . January 17, 2001.
  10. Young, Shawn (January 17, 2001). "NorthPoint Communications Files For Chapter 11 Creditor Protection" . The Wall Street Journal .
  11. Weiss, Todd R. (January 17, 2001). "NorthPoint files for Chapter 11 protection". Computerworld .
  12. Wagner, Jim (March 29, 2001). "ISPs React To NorthPoint's Imminent Shutdown". QuinStreet .
  13. Young, Shawn; Solomon, Deborah (March 23, 2001). "AT&T to Acquire Most Assets Of NorthPoint Communications" . The Wall Street Journal .