• United States

In brief: WorldCom name going away

Apr 14, 20034 mins

Plus: Microsoft names its new IM server; Siebel tries to quash reports of unhappy customers; Ciena buys WaveSmith; Network Associates reports loss; International Network Services to buy Predictive; Netgear to go IPO.

WorldCom will announce this week that it is ditching its tainted name, which has become synonymous with corporate scandal and accounting fraud. According to The Washington Post, WorldCom will adopt the moniker of its long-distance subsidiary, MCI, which has been a household name among consumers for about 20 years.

In addition to the name change, WorldCom is expected to announce that is moving its corporate headquarters from Clinton, Miss., to a facility it has in Ashburn, Va. WorldCom this week also is expected to file its latest reorganization plan with the bankruptcy court overseeing its restructuring. That document is supposed to include a three-year blueprint for the company to return to profitability.

Microsoft has dubbed its instant-messaging product Greenwich the Real-Time Communications Server 2003, Standard Edition. The company said the server would be launched this fall as a separate product and not part of Windows Server 2003. The server, based on Session Initiation Protocol and SIP for Instant Messaging and Presence Leveraging Extensions (SIMPLE) standards, was originally touted as a feature of the new operating system, which ships next week. The company did not announce licensing terms, but did say a subset of the technology, namely its presence awareness capabilities for tracking users online, would be offered as a free add-on to Windows Server 2003. Microsoft also will make available a set of APIs and a SIP proxy so developers can build presence directly into their applications.

CRM software maker Siebel Systems went on the offensive last week in an effort to quash reports that its customer satisfaction reviews were less than stellar. The reports stem from data in a confidential, Siebel-sponsored survey, which the company says was unlawfully leaked. “Someone has taken, selectively, eight pages of the 75-page report, clearly marked ‘confidential,’ and over the past month systematically leaked it to members of the financial community, press and analyst community,” said Nitsa Zuppas, senior director of public relations at Siebel. “It was clearly stolen and leaked. It was a violation of the law, and we have the FBI looking into it.”

The software maker didn’t dispute the authenticity of the leaked data, but says it was taken out of context. “In any given survey what we’ve seen is a couple of problem areas,” said Steve Mankoff, senior vice president of technical services at Siebel. Mankoff stressed that overall, Siebel’s customer satisfaction scores were extremely positive.

Optical network vendor Ciena last week acquired privately held multiservice edge switch maker WaveSmith Networks for $158 million in stock. Ciena was a third-round investor in WaveSmith and distributed the company’s products. The acquisition follows WaveSmith’s recent contract, valued at $50 million or more over three years, to supply SBC with multiservice edge switches in 200 sites. The deal helps Ciena tap additional sources of revenue as sales of optical network gear remain sluggish during the 3-year-old telecom slump. Citing data from Infonetics Research, Ciena says the worldwide multiservice switch market addressed by WaveSmith’s products will grow from approximately $2.4 billion in 2003 to nearly $4 billion by 2006.

Network Associates last week reported a quarterly loss of $3.7 million in contrast to a profit of $15.8 million for the same period last year. First-quarter revenue fell to $215.2 million from $220.7 million. Network Associates’ CEO George Samenuk told analysts on a conference call that the company saw an unexpected fall-off in sales at the end of the quarter. Network Associates also is facing government inquiries into its accounting methodology, and is sorting out its financial statements for 1998 through 2000. The news sent Network Associates’ stock plunging 20%.

Santa Clara consultancy International Network Services last week said it has agreed to acquire security consulting firm Predictive Systems, of New York, in a stock deal worth approximately $19.2 million. After the acquisition, INS will have more than 700 employees and 30 offices in the U.S. and internationally. David Butze will continue to serve as president and CEO of INS, while Andy Zimmerman, Predictive Systems CEO, will remain with the company through the completion of the transaction, expected to close at the end of the second quarter.

Netgear, which produces a range of products for the small-office/home-office market, including Ethernet, broadband and wireless gear, last week filed its intention to launch a $115 million IPO. The Santa Clara company plans to trade on the Nasdaq under the ticker symbol NTGR.