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3rd Time's the Charm for USR?

August 14

Chicago-area US Robotics (USR), once-grand technology pioneer, is slated for sale to investor group Platinum Equity.

USR popularized dial-up modems whose clacking and screeching signaled to us newbies that we had at last arrived on the threshold of a new digital world, the Internet!

Then as PC makers began incorporating the devices in their machines, and as broadband technology became increasingly available, stand-alone dial-up devices began drifting off stage.

Platinum typically acquires older-tech companies, then rationalizes their processes and emphasizes the development of services revenues. The transaction marks the end of another chapter in USR's long journey, but it also bodes well for the ebbing firmís future.

To be sure, USR continues to manufacture modems, especially for markets in less-developed countries, as well as newer-tech digital communications networking, wireless and router gear. But itís surprising to hear the US Robotics name associated with only about $50 million in sales and 200 employees (according to OneSource, even less according to D&B). Thatís a long drop from a value of $6 billion and the companyís heady sale to 3Com in 1997.

In retrospect, USR was originally well-positioned to move into industrial-level communications technologies like servers and switches but never arrived, perhaps because parent 3-Com was itself struggling with the same problem as it continues to do so today. That marriage ultimately dissolved with a management buy-out of the firm in 2000 and its return to independent private status.

USR management now says USR will have the capital to expand into networking computers with TV sets, stereos and other home appliances. While we donít know a lot about that, we think -- if nothing else -- thereíll always be a market somewhere in the world for sturdy dial-up modems.

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