From Ziff-Davis newswire. Another one bites the dust?
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By Ben Elgin, Sm@rt Reseller August 12, 1998 5:47 PM PT [IMAGE]
Less than one year after Priori Networks Inc. opened its doors for business, the national Internet backbone provider is on the brink of bankruptcy, Sm@rt Reseller has learned.
All the company's employees have been laid off and the network operation center is no longer functional, according to a source at Priori. Temporary transit arrangements have been made for Priori customers in the Portland, Ore., Chicago, Washington DC, and Palo Alto, Calif. areas, but other customers may be left to fend for themselves, the source added.
Priori president and CEO Robert Shearing says severe financial shortfalls will force Priori to file for Chapter Seven bankruptcy within several days unless an acquisition offer is made. Under the rules of Chapter Seven, the company will be forced to liquidate its assets to pay off creditors.
"It's not looking good -- we will have a final decision in the next couple of days," concedes Shearing.
The company, which launched last October, specialized in selling backbone access to Internet service providers, usually at a lower cost than its telecommunications competitors.
High hopes dashed With points of presence in Atlanta; Boston; Chicago; Dallas; Denver; Los Angeles; Palo Alto, Calif.; Portland, Ore.; Seattle and Washington, D.C., Priori executives once had high hopes for success in the ISP backbone vertical market.
But, with a new breed of well-funded backbone providers entering the market, many industry observers believe Priori was a dollar short and a year too late.
"They came in when the window of opportunity was closing and they made several key mistakes. Perhaps the biggest error was focusing too heavily on engineering while ignoring the sales side," says ISP consultant Michael Dillon, who worked for Priori Networks for six months.
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