bus431TermPaper - WorldCom Term Paper WorldComs rise and...

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WorldCom Term Paper WorldCom’s rise and fall was a story for the ages. Starting from humbling beginnings as a long distance discount service, at their peak they were the second-largest long-distance provider in the United States of America. Ultimately, their internal control issues and unethical practices led to their eventual downfall, bankruptcy and public relations nightmare. This paper will show how WorldCom became a large player in the telecommunications industry from its inception in the early 1980’s, through its powerful rise in the 1990’s, to its collapse in the early 2000’s and where the remaining existence of the company is today. It will also show the problems that existed to cause WorldCom’s downfall and ways that this mess could have possibly been prevented. WorldCom’s Rise WorldCom has a relatively short time in the total history of the telecommunications industry, starting from a very small company which grew enormously into the eventual powerhouse it became later on during its lifespan. In 1983, two businessmen, Murray Waldron and William Rector, wanted to create a new long distance service at a discounted price. Their company’s name spelled out their plans exactly; the Long Distance Discount Service (LDDS) was the footprint of what would eventually grow into WorldCom. One of LDDS’s earliest investors was Bernard Ebbers and he was promoted to Chief Executive Officer in 1985. Bernard Ebbers was one of the largest players in the WorldCom
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history. LDDS continued to grow into the late 1980’s and early 1990’s, acquiring a decent portion of the market as it continued to expand and acquire newer technologies and businesses along the way. In August of 1989 they became a publicly traded company after an acquisition of Advantage Companies. LDDS continued to acquire other businesses as it powered its way towards the top of the industry in the early 90’s and in 1992 completed an all-stock deal and merged with another discount long distance provider, Advanced Telecommunications. An acquisition in 1993 of both Metromedia Communications and Resurgens Communications Group turned LDDS into the fourth largest long distance provider in the United States. The next year LDDS also acquired IDB Communications Group which held both domestic and international communication networks. In 1995, LDDS made a push to acquire Williams Telecommunications Group Inc. for about $2.5 billion dollars. Williams Telecommunications Group was a large data and voice transmission company in the telecommunications industry. This was a powerful acquisition for LDDS to complete, expanding their business to great lengths and led to the company name change from LDDS to WorldCom. WorldCom continued the merger and acquisition trend and in 1996 they merged with both MFS Communications Company and UUNet Technologies
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This note was uploaded on 07/12/2011 for the course BUS 101 taught by Professor Noname during the Spring '11 term at Albany State University.

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bus431TermPaper - WorldCom Term Paper WorldComs rise and...

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