Nortel's Fall Took Years To Hit Bottom

摘要

Nortel's decline - punctuated by last week's bankruptcy protection filings - started long before the accounting scandal of 2004 and the multimillion-dollar quarterly losses the company has piled up since. Nortel began unraveling after failing to capitalize on the huge acquisitions it made in the late 1990s and early 2000s. It paid $15 billion for two companies -switch makers Bay Networks and Alteon WebSystems - in an effort to transform itself from a century-old voice telephony stalwart into an IP voice and data powerhouse. The acquisitions -$7 billion for Alteon alone, which at that time had annual revenue just shy of $200 million - came amid the dot-com bubble. Navigating that while trying to establish itself in new markets like IP routing, and LAN and Web switching did not allow the company to grow or take substantial share in those markets.