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John Sidgmore
Former President & CEO
In Memoriam, 1951-2003
UUNET Technologies, Inc.
(NASDAQ: UUNT)
The Background
Initially founded as a non-profit, UUNET founder Rick Adams quickly recognized the commercial viability of the Internet. By spinning off UUNET Technologies, he created a for-profit entity to provide commercial UUCP and Usenet access. It became the first subscription based commercial Internet company and essentially jump-started the large-scale commercial adoption of the Internet.
Why We Invested
To NEA and the other initial investors, the company represented an opportunity to invest in the Internet at a fundamental level.
From both a professional and an investment perspective, NEA certainly understood proprietary networks. In fact, NEA’s Peter Barris was a seasoned veteran of GE Information Services (GEIS). In UUNET, he saw the sheer power and opportunity inherent in standardizing interconnectivity. Essentially shifting communications from an environment of heterogeneity to one of homogeneity.
The Result
UUNET became the world's largest Internet service provider and established itself as a cheaper, better alternative to corporate America’s value-added networks. Offering a range of access options, World Wide Web hosting services, security products and consulting services for business customers, UUNET's network was comprised of nearly 1,000 Points of Presence across the globe.
The company not only made money, it was one of the first and certainly one of the most profitable early Internet investments. A successful IPO (NASDAQ: UUNT) was followed by a merger with MFS Communications Company. Less than a year later, UUNET became a subsidiary of WorldCom through its acquisition of MFS.
Why It Worked
NEA knew the technology had promise, but needed to ensure the right leaders were in place. After making their first investment, Peter Barris joined the UUNET Board of Directors. From his GEIS days, Peter knew John Sidgmore as a leader with just the right mix of technical and management acumen. Trusting Peter’s judgment (and with a bit of persuasion), John took over as CEO. With Peter on the Board and John guiding the company, UUNET made the transition from Internet pioneer to Internet success.
Clearly, having the right people to guide a company through its formative years in a nascent market was critical to the ultimate success of UUNET and viability of NEA’s investment.
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