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166 Chapter 7

major capacity improvements on the horizon. Consequently, a new
feeding frenzy began. In 1998, the industry was thrust into a major
reeling under the inexplicable demands it had not anticipated. Thus
the stage was set for the acquisitions and merger mania that fol-
lowed. In the year 1999-2000, the amount of activity exceeded

US$110 billion in acquisitions (representing $25 billion in 1999 and
$85 billion through October 2000).This is shown in Figure 7-5.Table
7-4 is a more detailed listing of the action with the buyer, the com-
pany it bought, and the valuation of the company. This is not an all-
inclusive list, but it represents many of the larger transactions that
took place over these two years.
The graph Figure 7-6 is a breakdown of the major investments,
but a word of caution is in order: Many of these manufacturers have
TEAMFLY
undisclosed amounts that they have invested in some of their acqui-
sitions that are not shown here. This graph shows where the major
money came from in the form of stock or cash purchases.

Building Block of the Photonic

Network

DWDM is established as the fiberoptic system preferred for provid-
ing bandwidth relief. Several carriers have settled on DWDM
with 16 OC-48s as the technology of choice.With 16-channel DWDM

100,000 85,775
Figure 7-5
The value of 80,000
acquisitions and in millions $ US 60,000
mergers in 1999-
2000 40,000
25,099
20,000
0
1999 2000

Acquisitions and mergers

®
Team-Fly