How Level 3 Is Assembling A Powerhouse, One Company At A Time

By Linda Hardesty

As someone who’s lived in Colorado for more than 25 years, I’ve seen a lot of great hometown companies grow up and move away, including Tele-Communications Inc., Jones Intercable, StorageTek and JD Edwards. Actually, they didn’t move away of their own accord; they were sold to other companies that relocated the businesses to their own headquarters. However, Colorado is still home to Crocs, maker of the world’s ugliest shoe.

So in April, when I heard Level 3 Communications, a company founded in Colorado in 1998, was buying Bermuda-based Global Crossing, I was pleased. Finally, a big employer won’t be moving jobs out of the state (for more, click here). The transaction is expected to close before the end of 2011 but, in July, the Justice Department requested more information from the two companies. This month, shareholders of both companies separately approved the purchase.

Assuming the merger does happen, the combined company will offer a vast portfolio of long-haul fiber transport, IP and data solutions and content delivery as well as data center, colocation and voice services – all delivered globally.

There are rumors afoot Level 3 is kicking the tires of Limelight Networks, a major content delivery network (CDN) company. CDNs own data centers full of servers connected to regional Internet networks throughout the world.* The biggest CDNs are Akamai Technologies, Limelight Networks and Level 3, but Global Crossing resells CDN services from Limelight Networks and EdgeCast Networks.

Some mergers don’t seem to make much sense at first blush, for example, this week’s announcement of Google’s purchase of Motorola Mobility. Google’s young software engineers like to play table-tennis in the corporate "playroom," and employees of 90-year-old Motorola get their kicks practicing Sigma Six. Besides the culture clash, what in the world is Google going to do with all those set-top boxes? But I digress.

While some mergers don’t seem to make much sense, Level 3’s acquisition of Global Crossing and possibly a CDN provider make perfect sense.

Linda Hardesty is associate editor at Communications Technology. Contact her at [email protected].

*Ed Note: Most pure-play CDNs don’t own the data centers, they just own the servers within the data centers. Level 3 however, does own some data centers.