As the world of dial-up Internet slowly dies, EarthLink
The DeltaCom deal gives EarthLink 32,000 customers in the Southeastern part of the country and 16,400 miles of fiber optic cable. I guess you could say this was a somewhat natural move for EarthLink, staying in the Internet connectivity business, just moving up the value chain. On the downside, DeltaCom hasn't been profitable for years and has had declining revenue the past eight quarters, so maybe it's just two struggling businesses combining.
EarthLink has tried other business ventures as dial-up fades away. It partnered with Google
This is a big move for EarthLink, expanding its reach into the fiber-optic business and owning the lines it is selling. Some investors may be concerned about a cut in dividend, but this could be just the start of deals with plenty of cash on the balance sheet and the urgency to move beyond the dial-up. If indeed there is more to come, maybe EarthLink can be more than just a dying business.
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Fool contributor Travis Hoium does not have a position in any company mentioned here. Google is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.