With the Nasdaq beginning to lift itself off the floor, and interest rate cuts starting to take effect, the situation is improving. For middle market ISPs, questions about today's valuations and what the future holds persist. Moving up the value chain from traditional services takes management talent and engineering skills. ISPs looking to evolve will have to make certain the markets they're going after can support the increased overhead. In addition, figuring out the back-end systems that will allow for operational efficiency across a broad array of sophisticated services will be key.
Buyers are still very attracted to the high margin, low-churn business market.
This means a number of very good shops will have to stick it out until the market begins to improve, broadband bugs are fixed, and further consolidation among the big dogs creates strong buyers again. As high-end providers rush to evolve the services it will take to win demanding business customers, their consumer peers are far from dead. However, unless you're a huge player, the market is certainly ripe for end-game strategies. Dial-up still has a good three to five years left in it. For smaller shops that can't afford the DSL resale game or fixed wireless solutions, most customers will be churning off over the next few years, regardless of the number of friendly customer support folks on staff.