NorthPoint Communications

Michael Malaga; who with five fellow entrepreneurs raised $ 582,000 to form NorthPoint Communications in June 1997. They started with a simple plan to sell high-speed set up access oer phone production lines (DSL, digital indorser line) to footling businesses in urban areas. NorthPoint aimed to reach 50% of subscribers by leasing lines at 10% of local Telcos tack to go farher sites.         In August 1997 Accel Partners, benchmark Capital and Greylock put up $ 11 jillion for 33% in equity. NorthPoint ended 1998 with $ 931,000 in raw sales, $ 29 one thousand thousand in losses and $ 59 million in debt.         Since the web was on the rise through 1999, NorthPoint eyed a public offering, which argue course cared little about profits that could come later. So NorthPoint changed its plan and focused on the metrics that Wall Street craved. Magala raised $ 530 million to ramp up a bigger mesh topology and serve both(prenominal) businesses a nd consumers everywhere. He began doubling subscribers and revenue, letting losses mount. NorthPoint ended 1999 with $ 21 million in sales, $ 184 million in losses.         NorthPoint paid the Bells $ 18 a month for each line and resold them to Internet work providers for as little as $ 35. The $ 17 left everywhere barely covered network be which, for the first society months of 2000, ran $ 700 per subscriber per month. Serving other castigate sites costs them over $ 200 Million linking each switch to a pommel constituent multiple Internet service providers a cost of $ 2,000 a month. By March 2000 NorthPoint had 41,300 users, accumulative losses of $ 295 million and $ 488 million in debt.         Magala gave the assignment to NorthPoint death chair Elizabeth hitch to look for an exist strategy. By August she had a disseminate with Verizon but since sales were down 20%, on November 29 Verizon backed out.

With no other rescuer give by March 2001 the network went dark. NorthPoint is sold to Michael Armstrongs AT&T for $ cxxxv million for the wirers and routers, but it ditched 87,000 customers. AT&T totally treasured piece parts.         In 46 months of existence it had sales of $ 116 million, losses of $ 700 million and debt of $ 508 million. On its last leg it was free anxious $ 66 million a month.          This would have worked, it just instantaneously would have taken time. Michael Magala believed if NorthPoint would have stuck to its original strategy of serving businesses in denser markets. It might have made NorthPoint less coarse-grained to The Streets, and the firm would have still been in business.          If you want to write down a full essay, order it on our website: OrderEssay.net

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