PSINet Inc, Herndon, Virginia, said the sale of its consumer Internet business to MindSpring Enterprises Inc is just the tip of the iceberg and predicts current talks with other regional providers will lead to many more contracts for its approximately 120,000 worldwide individual subscribers. Regional access provider MindSpring bought the subscribers, access to PSINet’s national network and the right to use PSINet’s Pipeline name, software and content for $23m. PSINet will spend most of that on a major marketing campaign to boost its corporate business, which accounts for 80% of its revenues, and help it compete with firms such as UUNet Technologies Inc. PSINet says it is on par with UUNet with about 10,000 corporate accounts and will develop intranet and electronic commerce offerings in the future. The deal with MindSpring also saves on PSINet’s salary overhead – 80 of its 580 staff have been offered positions at MindSpring in Atlanta when the consumer business moves. PSINet hired Merrill Lynch & Co in May to help find strategic alliances in the US and abroad (CI No 2,914), but said yesterday it won’t strike further international deals until it sorts out domestic partnerships.
