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ANS sold to America On-line

  • From: Jeff.Ogden
  • Date: Tue Nov 29 10:03:48 1994

FYI.
 
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.
 
  -Jeff Ogden
   Merit/MichNet
 
------------------
 
 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 
                                                     ANS 
                                                     (914) 789-5363 
                                                     e-mail: rosalia@ans.net 
 
 
 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 future." 
         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 
 community. 
         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. 
 
 -End- 
 
 ____________________ 
 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 
 cost." 
 
 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 
 internetworking industry. 
 
 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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