Big Data Deals Finally Ready?


Consolidation among the big high-speed-data-service
providers throttled forward again last week.

This week, Microsoft Corp. is expected to land in the
middle of the merging Road Runner and MediaOne Express data services, with an equity offer
in the ballpark of $400 million, or about a 20 percent stake.

Along the same track, talks resurfaced about how to create
a nationwide data backbone linking @Home Network and Road Runner/MediaOne Express.

If that happens, there could be tumultuous changes in the
personnel mix of the merging venture. Executive sources involved in the merger confirmed
last week that a search is under way for a new CEO, and that several key senior staffers
are weighing their options and deciding whether to stay on and move to Fairfax, Va., based
on what kind of stock options they're offered, or to seek employment elsewhere.

Executives with Road Runner and MediaOne Express have said
that they want to go public, as @Home so successfully did last year.

The data arms of Time Warner Cable and U S West Media Group
have been trying to merge since December, and they were on track for catch-all
announcements twice -- once before the National Show, and then after it, May 12. The news
was supposed to be a technology and equity link between them, Intel Corp. and Oracle Corp.
affiliate Network Computer Inc.

At the last minute, though, Microsoft waltzed in with a big
bag of cash, which Road Runner and MediaOne Express felt a fiduciary obligation to assess.

Insiders said patience levels among Road Runner and
MediaOne Express employees are starting to wane, as executives psyche up to blast out the
big announcement, then get sidetracked by another potential investor that leads to another

Executives on all sides again refused to comment about the
situation, nor could corporate spokespeople confirm a new date for announcement details,
like the company name or management team. Sources warily pinned the announcements to this
week, but they quickly pointed out that "anything could happen" to again
postpone details.

Meanwhile, executive sources with many of the involved
companies said gag orders are in full effect, and they would only comment for this article
on condition of anonymity.

What also remained unclear is whether Microsoft's
offer, if accepted, simultaneously nudges NCI out the door. NCI has said that it views
Microsoft as its only serious contender for the software that it provides, and insiders
said Microsoft is not likely to plow money into a venture without some assurance of
technological involvement.

"This could turn into a lawsuit pretty quickly,"
observed one insider, about Microsoft's impact on ongoing talks between Road
Runner/MediaOne Express and NCI.

And there's another potential mega-merger in the mix:
What had been a squelched batch of discussions about a nationwide data backbone rose from
the ashes last week.

Two senior-executive sources confirmed that @Home and Road
Runner/MediaOne Express are again in negotiations about a merger.

The last two months included "several meetings"
-- mostly couched as "backbone-interconnect" discussions -- between the two
groups, these sources said.

@Home and Road Runner were "a nine iron and a sand
wedge" away from a merger late last year, sources said, partially induced by AT&T
Corp.'s interest in a way to carry phone traffic to homes on wires without local
telco ownership.

Leo J. Hindery Jr., president and chief operating officer
of Tele-Communications Inc., confirmed in April that the talks were off. But since then,
he and other lead cable executives have said that the deal is too logical not to get
resolved someday -- if power, control and ego issues can be assuaged.

"[It is] constantly obvious to all of us that the
services need to be put together," one senior executive involved in the talks said.
"Only egos are in the way."