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Byline: MIKE ANGELL
Two years ago, the future looked bleak for broadband modem maker Netopia Inc. Two-thirds of its customers, the newly hatched high-speed Internet companies, had filed for bankruptcy.
Netopia Chief Executive Alan Lefkof figured the quickest way to get new customers was to buy them. So in September 2001, his firm bought rival Cayman Systems for $11 million.
"When our customers started going out of business, we needed to take our expertise somewhere else," Lefkof said. "Cayman had the customers that we wanted."
Now that bet is beginning to pay off. Netopia, which makes modems for digital subscriber service lines, has been on a year-long growth spurt as DSL service gains more customers.
While staying focused on its original market of business DSL clients, the firm also is branching off into the larger and more competitive market for home DSL customers.
"Their target market just dried up," said analyst Bill Choi of Kaufman Bros. "They really redid their product portfolio."