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Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5
Reviews:
·Dish Network
reply to ISurfTooMuch

Re: When did Karl first explain this?

Integration isn't easy. We've seen it in some of our larger (multi-billion dollar acquisitions), but over time if you know what you're doing it works.

Depending on the reason Earthlink acquired your company and how much they paid, they may have gotten what they wanted. Undoubtedly the owner got a nice payout.
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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
I don't recall the details of the deal, since it was over 11 years ago, but I do remember that many folks who had stock options got screwed because they were now underwater, and I don't think they got offered anything to accommodate that, well, at least not for the folks I'm aware of.

However, most of us came out OK. Back before OneMain got bought, they had already started to do some consolidation and layoffs, so they'd put forward a pretty generous severance package: over three months pay when you factored in base and extended severance. It became more or less a standing offer, even if you weren't slated to get laid off in the foreseeable future, which was probably a mistake on someone's part, so, when EarthLink took over, they were stuck with that agreement. But boy did some folks in management try to keep people from taking the severance package and leaving. They tried to tell many folks that, no, they couldn't leave if they could be transferred to other departments when their departments were closed down, even though the written agreement said otherwise. And, since some of those transfers were downward moves, and since severance was based on your last rate of pay before you were laid off...well, you can see where this was going. They tried to tell us that our salaries wouldn't be reduced when we changed departments, but no one believed that, considering it wasn't in writing and also considering how they were trying to weasel their way out of what was in writing. Needless to say, it proved to be a pretty tense standoff before we were finally told they'd let us choose to leave and take the package.

As far as what EarthLink got, it wasn't much at our facility. The building was leased, and they had a fire sale of computers before shutting down. The main things they got were the POP's and the customers. And many of our POP's covered areas where EarthLink didn't have a local presence, so I guess that's something, although, considering that shared POP's were coming on the scene pretty quickly, I don't think those held their value for long. As for the customers, I already mentioned those, and, with SBC rolling out DSL pretty widely at the time and EarthLink abandoning it, they probably only kept a few rural customers in areas served by telcos that didn't offer DSL. So, all in all, I think it ultimately was a bad deal for EarthLink, but, given their stellar track record in the last 10-15 years, they probably couldn't see it. Although, I have some grudging admiration that they're still managing to hang on, if only by a thread.

Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5
Reviews:
·Dish Network
Interesting story. Thanks for sharing.

I've never been on the acquired side of the equation, but from what I've read in the various message boards, I'm glad.

Yeah, you can't trust most big business to look out for employees--everything needs to be in writing.

Sounds like it was just a bad transaction all around. I'd love to see the management presentations and white papers.
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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
To be honest, I'm not sure it was something that was in the works for long. The impression I got was that, as soon as the stock tanked, EarthLink went on a buying spree. We all came in one morning and found out we were owned by EarthLink. Even our regional VP was unaware. As far as I know, he found out in the same e-mail we got. Given that our stock fell so far in a very short time, I don't think EarthLink had to do much more than wave some cash. From what OneMain was doing (buying small to medium sized ISP's--many serving smaller cities and rural areas--and merging them), it certainly seemed like they were looking to be bought, but I don't think events transpired the way they'd hoped.

But, the thing was, it was obvious EarthLink didn't know much about what they'd bought. True, my ISP was relatively small by their standards, and our business sales division didn't get the raw numbers they did, but we were making some inroads into companies I'm sure they'd love to have now, such as a very large discount retailer everyone loves to hate. I know that one because I sold to them, and I was working directly with their national headquarters' IT department. We were also selling accounts to a decent sized insurance company and several trucking companies, and I'm not talking dialup accounts or DSL here--I mean T1's, ATM, Frame Relay, etc, and we had the people on the ground to configure, install, and support the equipment. But we never got visited once by someone from EarthLink. They just told us to stop selling, first, supposedly in preparation for a new product rollout, then we were told we were being closed down. Had they bothered to ask, I could have told them that the discount retailer sale I mentioned was part of a pilot project that had the potential to go national. I'll bet they still don't know that. Oh well, their loss.

Wow, this all sure brings back some memories. It was quite a ride.

Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5
Reviews:
·Dish Network
Do you recall the purchase price of your company? I'm just kind of curious how much Earthlink paid, relative to their revenues back then.

We do small deals pretty quickly, but take a long time with the bigger ones. We're pretty conservative and are very thorough with our due diligence. I know that many other companies aren't. And in the go-go days, a lot of those companies closed deals quickly to just get them done without much diligence at all.
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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
I don't recall, but I'll do some checking when I'm at my computer. I remember that CNET covered it, so I'm sure the info is out there.

But here's a fun fact. The guy who originally started the ISP that he sold to OneMain started a new ISP/telecom company right after we were shut down. Since he was the owner of the building, he just started it in an area not leased to Earthlink. He then hired back about a quarter of the employees (I even worked there for a while until I moved), grabbed a bunch of EarthLink's former local customers, and, as far as I know, the company is still there.

Now THAT'S the guy who made out like a bandit.

Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5
Reviews:
·Dish Network
lol. Earthlink were idiots then. All our purchase agreements have non-compete and non-solicitation clauses.
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Support the Occupy Wall Street movement--vandalize private property! »tinyurl.com/4yaqboj