NETWORK WORLD NEWSLETTER: CAROLYN DUFFY MARSAN'S ISP NEWS REPORT
11/15/04
Today's focus:  VC investment update: ISPs fare well in slow 
quarter

Dear [EMAIL PROTECTED],

In this issue:

* 'Net communications start-ups receive $216 million investment 
  in Q3
* Links related to ISP News Report
* Featured reader resource
_______________________________________________________________
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Today's focus:  VC investment update: ISPs fare well in slow 
quarter

By Carolyn Duffy Marsan

Start-ups focused on Internet communications had a strong 
showing in terms of attracting additional rounds of venture 
capital dollars during an otherwise slow third quarter of 2004.

Altogether, venture capital firms invested $216 million in 20 
start-ups in the Internet communications sector, according to 
the MoneyTree Survey, a quarterly analysis of venture capital 
investments compiled by PricewaterhouseCoopers, Thomson Venture 
Economics and the National Venture Capital Association.

The third-quarter investment is more than double that of the 
second quarter of 2004, when 19 deals worth $101 million were 
finalized in this network industry segment. In the first quarter 
of 2004, 21 Internet communications start-ups received a total 
investment of $156 million.

While ISPs fared well, venture capital investments across the 
network industry dropped during the third quarter. Overall, 
venture capitals invested $2 billion in 304 network start-ups 
including ISPs and other carriers, network equipment 
manufacturers, software developers and service providers.

The network industry's third quarter results were down from $2.7 
billion invested in 409 start-ups during the second quarter of 
2004 and $2.6 billion invested in 371 start-ups during the first 
quarter of 2004.

Much of the success the Internet communications sector enjoyed 
during the third quarter of 2004 can be attributed to one 
company: Vonage. This Edison, N.J. start-up provides telephony 
services across existing Internet connections. Vonage received 
$105 million - the largest single investment in the network 
industry - in its fifth round of venture capital investment.

Four other major deals for ISPs were:

* $20 million invested in Wayport, an Austin, Texas start-up 
  that installs and operates Internet connections in the 
  hospitality industry. This was Wayport's seventh round of 
  venture capital investment.

* $7.5 million invested in Netiface Communications, a Norcross, 
  Ga., start-up formerly known as TeleCommute Solutions. Netiface 
  offers fully managed IP VPN services. This was its seventh round 
  of venture capital investment.

* $3 million invested in Speakeasy, a Seattle, Wash., broadband 
  service provider. This is Speakeasy's fifth round of venture 
  capital investment.

* $2.5 million invested in Airimba Wireless, a Clemson, S.C. 
  start-up formerly known as ClearSKY Networks. Airimba provides 
  secure, high-speed wireless Internet access. This was Airimba's 
  third round of venture capital investment.

Look for more information about venture capital investments in 
the Internet communications area in the next newsletter.

RELATED EDITORIAL LINKS

Summer blues slow Q3 venture funds
Network World, 11/08/04
http://www.nwfusion.com/news/2004/110804venturesurvey.html

BT-Infonet has history to overcome
Network World, 11/15/04
http://www.nwfusion.com/news/2004/111504btinfonet.html

The Extended Enterprise Issue
Network World, 11/15/04
http://www.nwfusion.com/ee/2004/
_______________________________________________________________
To contact: Carolyn Duffy Marsan

Carolyn Duffy Marsan is a senior editor with Network World and 
covers emerging Internet technologies and standards. Reach her 
at <mailto:[EMAIL PROTECTED]> 
_______________________________________________________________
This newsletter is sponsored by Veritas 
IDC White Paper, Distributed Applications Performance Management 

Performance management of distributed applications continues to 
grow in complexity, keeping pace with this constantly changing 
environment is a challenge for IT and performance management 
software vendors alike.  Learn how the Veritas i3 Approach can 
be the foundation for your organization's Application 
Performance Management strategy.  Download this IDC White Paper 
now http://www.fattail.com/redir/redirect.asp?CID=88400
_______________________________________________________________
ARCHIVE LINKS

Archive of the ISP News Report newsletter (formerly Internet 
Services):
http://www.nwfusion.com/newsletters/isp/index.html
_______________________________________________________________
Bandwidth or latency? How to solve application performance 
issues 

With more users at the edge, and more of the infrastructure at 
headquarters, how are enterprises increasing business 
productivity and application performance?  Is more bandwidth the 
answer? Find out now. 
http://www.fattail.com/redir/redirect.asp?CID=88453
_______________________________________________________________
FEATURED READER RESOURCE
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