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ANS sold to America On-line
- From: Jeff.Ogden
- Date: Tue Nov 29 10:03:48 1994
The attached note is from Doug Van Houweling. Doug is the University
of Michigan's Vice-provost for Information Technology. Doug is a
member of the Merit Board of Directors and in that role he services
on the ANS Board and is currently Chair of the ANS Board.
Message: 41140379, 207 lines
Posted: 5:25pm EST, Mon Nov 28/94
Subject: ANS Sold to America Online
From: Douglas E. Van Houweling
All -- Attached find two press releases, the first from Advanced Network and
Systems, Inc., and the second from America Online, Inc. Many of you have
probably seen one or both of these already, as they were released
simultaneously this morning. As most of you know, I am Chairman of the
Board at Advanced Network and Systems.
The Internet operations and services capabilities that have been provided by
Advanced Network and Systems can now be acquired from many alternative
providers. Further, the NSFNet backbone service provided by Advanced Network
and Systems is being restructured to allow the required services to be
purchased in the marketplace. As a result, Advanced Network and Systems has
succeeded in its first major effort to advance networking -- a charitable
not-for-profit organization is no longer required to provide national
Internet connectivity. Internet services are now viewed as profitable
business functions rather than as specialized services in need of subsidy.
America Online will provide a robust platform for continued contribution
from the expertise Advanced Network and Systems has developed over the last
four years. The agreement specifically provides for continued support of
the NSFNet Backbone for the remainder of Merit's cooperative agreement with
NSF. The proceeds from this sale will allow Advanced Network and Systems to
support efforts to address the challenges now confronting the Internet --
standards, broad connectivity, advanced applications, and new media
applications -- to name a few. I look forward to further contributions from
Advanced Network and Systems, and to your suggestions for its direction and
areas of focus. Doug
Contact: Rosalia Bacarella
Advanced Network & Services Strengthens Its Focus on
Advancing Networking Technology and Use for Education and Science
America Online To Acquire Assets and Operations of ANS
and Related Services
Elmsford, NY, Nov. 28, 1994 -- Advanced Network & Services, Inc.,* today
announced it has agreed to sell substantially all the assets, networking
operations and related services of ANS to America Online, Inc., for $35
million so that it can further its not-for-profit goals of advancing
technology to benefit education, science and human welfare. This
transaction has been planned to ensure the continued provision of high
quality services to existing ANS customers.
"Advanced Network & Services was created to expand the Internet,
keep the network on the leading edge of technology and foster new
applications to make the network more valuable, as well as provide quality
services to the users of the network," said Allan Weis, president and CEO.
"Today, many of the concerns that prompted the creation of Advanced Network
& Services are no longer issues: the Internet has reached a critical mass;
commercial use has stimulated business to invest in the future of
internetworking; and robust Internet services are widely available. It's
time for ANS to further focus its efforts to advance technology in support
of research and education," Weis said.
"We've been impressed with the success ANS has had in deploying and
operating private networks, and we expect them to continue in this role,"
said Steve Case, president and CEO of America Online. "All ANS customers
can expect to continue to receive the highest quality services now and in
The sale of ANS' assets to America Online creates multiple
synergies. The purchase of ANSnet will enable the fastest growing online
services provider to capitalize on emerging market opportunities and
strengthen its position in consumer services.
The $35 million, $20 million in cash and $15 million in shares of
America Online, will be used by Advanced Network & Services to promote the
advancement and diffusion of computer networking and information technology
knowledge and its application to the advancement of education, science and
human welfare. Advanced Network & Services will continue its primary
mission of supporting the advancement of network technology and its use
through grants, studies and other cooperative efforts with the network
Advanced Network & Services was established in 1990 as a 501(c)(3)
not-for-profit company by IBM, MCI and Merit (a consortium of Michigan
universities). It has managed and operated the NSFnet backbone service,
which serves as the primary national connectivity provider for the Internet
in the United States, and has advanced high-speed networking technology and
use. In 1993, Northern Telecom became a member of Advanced Network &
Services to help advance these goals.
Advanced Network & Services formed ANS CO+RE Systems, Inc., a
for-profit subsidiary dedicated to providing internetworking services to
the commercial marketplace, in 1991. All of the shares of ANS CO+RE
Systems are included in the assets being purchased by America Online.
America Online, Inc., based in Vienna, VA, (NASDAQ: AMER) is the
nation's fastest growing provider of online services with the most active
subscriber base. America Online offers its more than 1.25 million
subscribers a wide variety of services, including electronic mail,
conferencing, software, computing support, interactive magazines,
newspapers, online classes, as well as easy and affordable access to the
Internet. Founded in 1985, America Online has established strategic
alliances with dozens of companies, including Time Warner, ABC, NBC,
Knight-Ridder, Tribune, Hachette, IBM and Apple Computer. Personal
computer owners can obtain America Online software at major retailers and
bookstores, or by calling 800-827-6364.
*Editor's Note: Advanced Network & Services refers to the not-for-profit
portion of what is commonly known as ANS. ANS is used to refer to the
portion of this entity that America Online is agreeing to acquire.
America Online Announces Strategy to Increase Network Capacity and Offer
Higher Access Speeds; Acquires ANS, Creator of Internet Backbone:
Expands Sprint Alliance
VIENNA, VA, November 28, 1994 - American Online announced today a networking
strategy designed to support the Company's rapid growth and position AOL to
lead the market with increased capacity and the provision of high-speed,
high-quality communications services. With the moves announced today,
America Online subscribers will be able to access the service at speeds of
14.4 kbps, 28.8 kbps and ISDN in most major cities in the first quarter of
1995 at no extra charge.
To advance this strategy, AOL has signed a definitive agreement to acquire
substantially all of the assets of Advanced Network & Services (ANS), the
company that has created the backbone of the global Internet, for $35
million. ANS provides virtual private data network services, Internet
access, network security and related services to major businesses. The ANS
backbone network is recognized to be among the largest and fastest public
data networks, carrying daily traffic of over three billion packets. The
backbone includes more that 12,000 miles of leased 45Mbps fiber-optic
circuits. The ANS team was instrumental in the development of advanced
router technology which enhances the scalability and thus the reach and
performance of the Internet.
"We've been impressed with the success ANS has had in creating the Internet
backbone and, more recently in deploying and operating private networks,"
said Steve Case, President and CEO of American Online. "Together, we plan
to pursue new opportunities to improve ANS's position in the
business-to-business internetworking market, strengthen AOL's position in
consumer online services, and take the lead in popularizing the Internet."
Case added, "We believe the time is right to begin to implement a portfolio
strategy for networking so we can be in a position to rapidly deploy network
capacity from multiple sources to capitalize on emerging market
opportunities. We are convinced ANS can help us better serve our
rapidly-growing customer base, and enable us to take the lead in deploying
next-generation multimedia services at higher speeds, including 14.4 kbps,
28.8 kbps, and ISDN."
Case continued: "When we announce our Internet Service Company in
September, we indicated that the Internet market was fragmented and we saw
an opportunity to bring the appropriate components together to provide a
complete Internet solution. Today's acquisition of ANS, combined with our
recent acquisitions of BookLink Technologies and NaviSoft, positions us to
lead the Internet revolution by linking together one of the largest and
fastest data networks with the most advanced Internet client, service and
authoring tools. While other companies offer pieces of the Internet puzzle,
we will be uniquely positioned to provide the whole puzzle."
Citing ANS' success in establishing ANSnet, one of the nation's largest and
fastest data networks, its role in fostering the growth of the Internet and
the accomplishment of its original goals, Allan Weis, President and CEO of
Advanced Network & Services, said "This agreement and the proceeds of this
sale will allow the not-for-profit organization that remains to address new
challenges by continuing to push networking technology and its use, and to
advance education and science."
In addition, American Online announced that it has expanded its agreement
with Sprint to also include high-speed access. Sprint presently handles
more than 80% of AOL's traffic, and will continue to be the major provider
of AOL's communications service. AOL customers will have access to Sprint's
14.4 kbps service which is available today in many U.S. cities.
Case added, "We expect our subscriber base to be at least double over the
coming year, and we expect continued increases in usage per subscriber, so
we're taking steps now to significantly expand our network capacity over the
coming year to handle this demand. The agreements announced today with ANS
and Sprint position us to meet this demand, lower our data communications
costs and provide subscribers with higher speed access at no additional
The Company will acquire substantially all of the assets of ANS which
includes all of the stock of ANS+Core, its wholly owned commercial
subsidiary. The Company will pay $35 million for the acquisition which is
expected to be completed by January 31, 1995 subject to government approvals
and other customary conditions to closing. AOL will pay $20 million in cash
and $15 million in common stock valued at the average market price for 20
days prior to closing.
ANS designs, develops and operates high performance wide area data networks
for business, research, education and government organizations. Committed
to maximizing the scope, capabilities, and ease of use of the Internet. ANS
offers customers one of the strongest pools of talented and experienced
people providing networking solutions today. ANS has managed and operated
the NSFNet Backbone Services since 1990, making it a true pioneer in the
American Online, Inc., based in Vienna, VA (NASDAQ:AMER) is the nation's
fastest growing provider of online services with the most active subscriber
base. AOL offers its more than 1.25 million subscribers a wide variety of
services, including electronic mail, conferencing, software, computing
support, interactive magazines, newspapers, online classes, as well as easy
and affordable access to the Internet. Founded in 1985, American Online has
established strategic alliances with dozens of companies, including Time
Warner, ABC, NBC, Knight-Ridder, Tribune, Hachette, IBM and Apple Computer.
Personal computer owners can obtain American Online software at major
retailers and bookstore, or by calling 800-827-6364.
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