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Revision as of 19:46, 1 December 2004 by Brian Kendig (talk | contribs) (still needs more editing)(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)Verio is an ISP in the United States. Formed in the mid-1990s in Denver, Colorado, it is currently a division of NTT which purchased it in 2000. Verio performed the first consolidation in the ISP industry, and it was the largest cash buy-out of a high-tech company by a foreign entity in American history.
Initially, Verio raised funds with which to purchase regional small "mom and pop" ISPs around the USA and Europe. It was funded by the principal founders, private investors, NTT, and institutional investors in a private placement. The concept was to "roll up" small ISPs into one large national ISP and achieve economy of scale with a single internet infrastructure, a single branded product line, a unified support structure, and so forth. This type of regional rollup into a national brand is common in many industries, but was the first of its kind in the newly-evolving ISP industry.
By the year 2000, Verio had purchased almost fifty small ISPs, most in the USA but some in Europe, ranging in price from under a million dollars (USD) to over 100 million dollars per ISP. During this time Verio went public on the NASDAQ, trading under the symbol VRIO. In early 2000 Verio was sold to NTT at a per-share price of over $60, a total cost slightly exceeding $5 billion. Because NTT is a Japanese government owned company, foreigners are not allowed to own NTT stock (according to Japanese law) and therefore the buy-out was a 100% cash deal. This was and still remains the largest cash transaction for a high-tech company in history. The United States Congress held hearings over the transaction to ensure it did not violate national security concerns, because the Verio Internet backbone was at the time one of the top five in the world, carrying a large amount of potentially sensitive data.
Within months of the announced deal, the NASDAQ stock market crashed in the spring of 2000 in the dot-com bubble burst. The share price of Verio went from a high in the 80s just before the announced buy-out to single digits, however the set price of around $60 remained and NTT had completed the transaction by the fall of 2000.
Over the course of the next few years Verio abandoned the lower revenue consumer market and focused primarly on the more lucrative business to business web hosting. Most of the original infrastructure and employees it had purchased were disbanded and consolidated into a few large centralized data centers.
Verio continues to operate as a division of NTT.
Some of the ISPs purchased by Verio
- Clark Internet Services (ClarkNet), Columbia, Maryland
- Monumental Network Services (MNS), Chantilly, Virginia
- Internet Information Services (IIS), Bethesda, Maryland
- Northwest Network Services (NorthWestNet), Poulsbo, Washington