Reach Out and Grab Someone

AT&T moves to end years of frustration and heavy losses in the computer field with one bold $6 billion stroke

When American Telephone & Telegraph entered the computer business six years ago, big things were expected to happen. After all, the company had invented the transistor, the basic building block of modern computers, and it had built the nation's telephone system, which is essentially one vast computer network. Industry analysts predicted that AT&T one day would even challenge IBM for market supremacy. The government, which had barred Ma Bell from the business until the phone monopoly was broken in 1984, fretted that it might be opening the way for the giant (1989 revenues: $36.11 billion) to dominate the computer industry. But...

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