Growth through gobbling

WorldCom's CEO will have his hands full for most of 1998, ensuring that the proposed $37 billion merger of WorldCom and MCI Communications passes muster with the FCC, the Department of Justice, various state government boards and the European Commission.

"I think the merger will happen for two reasons," says Tom Jenkins, broadband consultant with TeleChoice. "I doubt someone else will come in at a higher price. And though it fluctuated when the deal was announced, WorldCom's stock price has gone up and settled around $32."Once that hurdle is cleared, the process of integrating the carriers' networks, operations and staffs begins. Challenges abound.

"MCI is a big outfit, and there are things you can do to lead a big company that you cannot do to lead a small one," says Tom Nolle, a principal analyst at CIMI Corp., Voorhees, N.J. "Bernie has to make sure his style of leadership, which has led WorldCom to become the kind of company that can gobble up the number two carrier in the country, isn't lost and enmeshed in the MCI bureaucracy."

Ebbers has insisted that MCI and WorldCom have the same entrepreneurial background and spirit that will minimize problems.

"That may have been true of MCI in the beginning, but now it is one of the more structured companies out there," Nolle says. "MCI WorldCom will need to reinvent itself, but first it will have to un-invent itself."

The MCI/WorldCom deal was the climax of Ebbers' year. 1997 started off with WorldCom buying competitive local exchange carrier MFS Communications, which had just purchased UUNet, a national Internet service provider. This fall, WorldCom acquired the networking division of CompuServe and the Internet unit of America Online.

And just before it made its historic bid to buy MCI out from under a planned marriage to BT, WorldCom bought Brooks Fiber Properties.

Ebbers has said the merger with MCI will be the carrier's last acquisition for awhile. But then if Ebbers has proved anything in 1997, it's that he's unpredictable.