3Com: I think I'm turning Chinese

Its Silicon Valley glory days long gone, the telecommunications firm kowtows to the inevitable.


Andrew Leonard
September 28, 2007 7:07PM (UTC)

We really knew the whole Internet thing was getting out of hand when, in 1996, Candlestick Park, the home of the San Francisco Giants and 49ers, was renamed 3Com Park at Candlestick Point.

True, 3Com had an illustrious Silicon Valley heritage -- founded by none other than Xerox-Parc veteran Bob Metcalfe, the inventor of Ethernet. And like so many other Silicon Valley hardware companies, 3Com saw its fortunes soar on the back of the Internet boom and the explosion of computer networking. Even so, in solidarity with many other Bay Area residents at the time, I was revolted by the switch from the elegant Candlestick to the gauche and ungainly "3Com." Everyone except the sports broadcasters willfully ignored it.

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In retrospect, however, the sponsorship deal was simply another sign of the transformative impact Silicon Valley was having on the entire world. Other stadiums were renamed after banks and airlines. But our new name was a mashup of "Computers, Communication and Compatibility." That's what the Internet was all about. Touchdown!

But 3Com did not negotiate the rise and fall of the First Internet Era very well. Cisco and Intel carved away huge chunks of market share for key products, and by the time the naming rights deal expired in 2002, 3Com was in no position to keep paying for big branding rights. Total employment dropped from 12,000 to 2,000. In 2003, the company moved its headquarters to Massachusetts, and it reportedly recently closed its old Santa Clara offices. About the only ray of light was a joint venture 3Com engaged in with China's premier telecommunications firm, Huawei. If you're in the business of networking computers and telecommunications systems together, China is where the action is.

In November 2006, 3Com bought out Huawei's stake in the joint venture. But the Wall Street Journal reported on Friday that 3Com's history as an independent entity is over. It is selling itself to the private equity firm Bain Capital for $2.2 billion in cash, with Huawei purchasing a minority stake.

Is there any symbolism to be mined in the transformation of 3Com from Silicon Valley flag bearer to just another piece of private equity meat carved up with the help of an up-and-coming Chinese firm? Not really. For all intents and purposes, 3Com already is a Chinese company. Of the 6,200 employees on the payroll in July, reports the Journal, 5,000 were in Asia "and nearly all of them in China."


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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