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AT&T is the nation's leading producer of electronic cash registers and the world's largest manufacturer of automated teller machines for banks. The company is the third biggest issuer of credit cards, behind only American Express and Citibank. It has also expanded into the field of multimedia (machines that can combine text, graphics, sound and video) by buying pieces of EO, interactive computer maker 3DO Co. and software start-up General Magic. Earlier this month, the phone giant entered the video-game business through a joint venture with Sega Enterprises that will enable players to take on opponents over AT&T's phone lines, and it formed an alliance with Viacom, a cable-TV programmer, to launch a two-way video service that will let viewers receive movies on demand and shop from home. AT&T is also discussing a partnership with the nation's largest cable-TV operator, Tele-Communications Inc. (TCI). Says AT&T chairman and chief executive Robert Allen: "This ain't Ma Bell."
While it may no longer be Ma Bell, AT&T continues to have Bell-size ambitions. The ultimate goal of the old AT&T was to serve as the primary information pipeline into every U.S. home and business. But in 1984 the company was forced by a federal court to spin off the regional Bell operating companies, or Baby Bells, which own most of the nation's local phone lines. AT&T still has its grand vision, but instead of concentrating on telephone ^ calls, the company is aiming to become an all-purpose superplayer on the electronic superhighway that will carry interactive services, information, shopping and entertainment into America's homes.
That electronic superhighway will involve many players: local cable and phone companies that could provide the connections to individual consumers; media and entertainment companies that will provide the shows, games, interactive services and information products; and computer and communications wizards who will create the technology and software. Each week new alliances and marriages of convenience are announced. AT&T has begun to carve out a broad role that capitalizes on the many strengths it can bring to the party, including a long-distance network and switching capabilities, new electronics devices and technologies, and its ability to package consumer-friendly services.
"AT&T is pursuing its 'communacopia' strategy," says Robert Morris III, an investment analyst at Goldman Sachs. "It wants to be the horn of plenty for every conceivable information technology, and be to multimedia what Ma Bell was to telephones." The odds of success, says Morris, are in AT&T's favor: "There is no other company with all the necessary talent, tools and muscle under one roof."
Most of the credit for AT&T's resurgence goes to the company's risk-taking CEO, Bob Allen. Lanky and quietly determined, Allen has spent his entire 36- year career within the Bell System and AT&T. He learned to take chances from his father Walter, who quit his job of 21 years with the J.J. Newberry chain of five-and-dimes to purchase a bankrupt children's clothing store in New Castle, Indiana. "Talk about courage," recalls Allen, still in admiration and awe.