In 1996 MFS Communications Inc. acquired UUNET for $2 billion in stock, a 37 percent premium over market value. The acquisition made 40 of UUNET's 700 employees who owned UUNET stock millionaires. MFS Communications was based in Omaha, Nebraska, and offered local and long distance telephone service in New York and nationwide. It built fiber-optic cable connections to 7,400 buildings in key financial districts in the United States and Europe. Together, the two companies were able to offer end-to-end voice, data, and Internet services. Following the acquisition UUNET extended its AlterDial service to 92 international cities.
In mid-1996 GTE, then the largest local telephone service provider in the United States, became a UUNET customer when it introduced GTE Internet Solutions. GTE used UUNET's existing network to offer Internet access in 250 cities in 46 states. Later in 1996 UUNET became the first major commercial ISP to offer Web hosting services for Windows NT 4.0. UUNET first offered Web hosting services in 1994 using the Unix platform, and had more than 800 customers.
Web hosting was one service that ISPs could offer to distinguish themselves from their numerous competitors. In late 1996 UUNET began offering another service, ExtraLink, a package of extranet services that enabled companies to share information with customers and suppliers over a virtual private network (VPN). A related service, called ExtraLink Remote Access, allowed remote workers to access the corporate network without having to employ a large bank of modems.
For 1996 UUNET's revenues were estimated to be $216 million. Before the end of the year World-Com Inc. acquired MFS Communications for approximately $12 billion in stock. Sidgmore remained CEO of UUNET and became vice chairman and chief operating officer (COO) of WorldCom.
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