Icon will be acquired by Qwest in an all-stock deal valued at roughly $185
million. Qwest said the purchase will serve to help the firm further
penetrate the business Web hosting and Web-enabling market.
Icon, based in Weehawken, NJ, provides Web hosting, Internet connectivity
and professional services for businesses and corporations.
Icon reported revenues in 1997 of $52 million, and estimated its 1998
revenues would reach
approximately $80 million. Clients include Icon Bear Stearns, Merrill
Lynch, CBS, Swissotel and Pfizer.
“Icon’s experience in helping businesses convert legacy systems to
Web-based applications will help us provide end-to-end Internet solutions,”
said Larry Bouman, executive vice president of product
development and multimedia services for Qwest.
Qwest said it will mark its entry into the Web hosting market by
establishing 10 major CyberCenters for customer hosted applications. The
company expects to open CyberCenters in San Francisco, Los Angeles, New
York, and Washington, D.C. by the year’s end. Centers in Seattle, Dallas,
Chicago, Detroit, Atlanta and Miami will be open in 1999.
Qwest also announced today that it will initiate the first broad scale
deployment and activation of a massive Internet Protocol (IP) nationwide
network. Qwest said its OC-48 network will deliver usage-based billing and
pricing to its clients who will be able to access virtually unlimited
bandwidth to support multimedia, e-commerce and data applications without
the cost of a dedicated leased line.
The new services complement Qwest’s Macro Capacity Fiber Network, the
company said, and by offering commercial availability of the OC-48 in
November, 1998, Qwest is providing customers with second-generation IP
services while competing networks remain under construction.
The new transport services and applications will offer service level
agreements including 100 percent network availability. In addition, Qwest
said the new IP services will feature high-speed dedicated Internet access
with speeds up to OC-48, IP-based VPN services and an expansion of its
Q.Talk voice over IP network service.
Qwest also announced it created a National Accounts division to sell its
IP-based services and disclosed that its first customer, NY-based
commercial real estate
concern Rudin Management Company Inc., signed a two-year, $36 million
agreement to receive live OC-48 architecture on the Qwest IP backbone.
Billing the transaction as one of the largest IP agreements to date, Qwest
said under terms of the contract Rudin tenants will receive OC-48 services
“direct to the doormat” at select Rudin locations.
“With the introduction of our OC-48 IP network, we are driving the
development and availability of web-enabled and e-commerce applications at
performance and pricing levels that will significantly enhance the
productivity of business solutions,” said
Joseph P. Nacchio, president and CEO of Qwest.
Qwest (NASDAQ:QWST) was up +1 1/8 to 29 15/16 in early trading on today’s