Exactly two years ago, Newsweek published a story about Bernie Ebbers with the headline "Who is this guy?"
It seemed at the time a reasonable enough question. Ebbers had just engineered a deal in which WorldCom, a fair-sized but little known telecommunications company he ran from Jackson, Miss., would take over MCI, a phone company with a household name.
In the highest profile merger battle in years, Ebbers beat out British Telecom and so became the biggest cheese in telecom. The New York Times gravely cautioned that now this unknown, who still lived on a farm outside Jackson, would have to slow down on buying corporations (over 14 years, Worldcom had grown by buying some 40 smaller companies) and "learn to run what he has built."
Ebbers didn't take the Times' advice. On Tuesday Ebbers and MCI announced a deal to buy Sprint in the biggest merger in U.S. history. Regulators say they'll look closely at the competitive effects before allowing the merger. For now, however, it's surely Ebbers' day. Next week his picture will again grace the covers of magazines, and this time around nobody will be asking, "Who is this guy?"
The rise of Bernie Ebbers bears comparison with the rise of the industrial tycoons of the 19th century. If it seems incredible that after just 16 years in the business Ebbers
should be engineering the biggest corporate takeover in history, consider this: Andrew Carnegie first invested in steel in 1861. Forty years later, after buying out a string of competitors, he sold his steel holdings to J.P. Morgan. They formed the core of the new U.S. Steel, and Carnegie, the onetime "bobbin boy" (yes, all the histories still call him that, even now when no one knows what that means) from a textile mill was reputedly the richest man in America.
There is, however, one great difference between the Carnegies and Rockefellers of the 19th century and the mega-tycoons of today. Carnegie, effectively, was accountable to no one but himself (and a conscience that was for Carnegie always a source of some trouble); Ebbers is the servant of his shareholders. This is certain: He will stay on top of the world only as long as his share price keeps rising. We live in a far more rational, and arguably more honest, economic world. Whether that turns out to be a fairer one, less prone to the excesses of monopoly and more hospitable to those at the bottom of the economic ladder, is still an open question.