Thursday, September 20, 2007
Senior Business Seminar-Assignment #5
By 7:00 AM on Tuesday, September 25, read the case study at the end of chapter 1, "Shattered Dreams: Level 3 Communications". Select any question at the end of the case that has yet to be answered by 4 students. Publish your answer in a new post of no more than 2 paragraphs. Label your post: Level 3 Communications Question # _ - Your first and last name.
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3 comments:
Level 3 communications #2
Bishara Etienne.
Level 3 communications was able to raise so much capital because of explosive growth in the internet. And a surge in the volume of digital data that was pumped through UUNet's fiber-optic pipes.
With the increase of internet users the network traffic doubled every one hundred days. This implied a growth rate of over 1000 percent a year. Furthermore there was not enough fiber-optic capacity to go around hence causing demand to outstrip supply for the foreseeable future. Therefore because demand outstripped supply this caused for alot of capital to be raised.
Level 3 Communications #2-Nicole Damboise
The reason Level 3 communications could raise capital is because of the growth of the Internet. During 1998 to 2001 is when the internet became very popular so Jim Crowe thought it was a good idea to create a company that would make a lot of money.
In the long run during those few years the damand for internet was greater than supply, that's why the company gained so much capital in so little time.
After major profit losses in 2002 Level 3 avoided bankruptcy due to $500 million in investors money Crowe immediately began to change things in order to turn a profit. He began this by purchasing two software distribution companies. He did this so Level 3 could use its fiber optic network to distribute and maintain software, to save on costs. Later Crowe made a big move when he purchased Genuity consolidating the industry and acquiring Genuity's customers. Lastly Level 3 announced they would use their network to offer Voice over Internet Protocol services to consumers and corporations.
These plans have certainly helped Level 3 move out of debt proving they work. Also Crowe still believes his original plan will work, making it seem like these plans mesh well with the original.
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