Driven by the Internet and the related explosion of high-speed networking "bandwidth" merchants, AT&T is grappling with continued executive flight. News of the latest departure, wireless division president Dan Hesse, underscores these rampant opportunities, given his prominent role in taking the wireless division of AT&T toward a pending public offering.
Many view the departure of several of AT&T's brightest minds over the past five years as evidence of the changing nature of the communications industry, rather than an indictment of AT&T, its strategy or the leadership methods of its chief executive, C. Michael Armstrong.
"I don't think (AT&T) is much different than anyone else. In fairness, if you look at any of these other giant communications companies, I think you'll see the same thing," said Elliott Hamilton, senior vice president at the Strategis Group, a communications market research firm.
Others in the technology industry have been bitten by the same bug, including fellow communications operator US West and software giant Microsoft.
"It is an incredibly hot business market, particularly for executives with experience in telecommunications like those at AT&T," said a company spokeswoman.
Noting that Hesse's departure is "clearly a loss," the spokeswoman said, "The other piece of this is that we have a very, very strong bench."
Hesse's departure, after being passed over for the chief executive post for AT&T's wireless assets, is not unexpected. As part of his move to upstart TeraBeam Networks as chief executive, Hesse is rumored to have acquired a 5 percent stake in the firm.
"I think they have a ton of depth," said Rex Mitchell, analyst with the Montgomery division of Banc of America Securities. "I don't think it's an AT&T-specific problem. Most of the talent in the world right now seems to be consumed by start-ups."
Recent departures read like a who's who of the communications industry. High-level executive Alex Mandl left in the summer of 1996 to run wireless communications provider Teligent, followed soon after by Joe Nacchio, current chief of Qwest Communications International.
Bob Annunziata, who joined AT&T through its 1998 acquisition of Teleport Communications Group, left last year to run upstart Global Crossing. Former president of broadband services Leo Hindery also departed to run the Web hosting arm of Global Crossing before recently ascending to the chief executive position of that firm.
Others have left because they were attracted to other parts of the technology business. Jeff Weitzen, former head of Ma Bell's business services division, left the company at the end of 1998 to be president of PC maker Gateway. He has since been promoted to chief executive.
Former AT&T consumer head Dan Schulman left for the lucrative world of the "dot-com," in the summer of last year, joining Priceline.com as president.
AT&T's languishing stock might be partly to blame for the exodus. Ma Bell is down 38 cents, or almost 1 percent, closing at $52.63. In the past year, the stock has traded at a high of $63 and a low of $41.50.
The muddling stock is likely a reflection of the view held by some Wall Street analysts that the company's ambitious strategy to use cable networks as a high-speed conduit for a variety of communications services has yet to bear fruit.
"As the telecom market has exploded, there are a lot of these start-ups and a lot of (venture capital) money backing them, and they're looking for chief executives," Hamilton said. "So if you're an ambitious person in one of these companies, you just want to get out and do it on your own. The market has made this a perfect time to do it.
"As with any (large) corporation it's a slow, bureaucratic environment and some people just want to get out of it," he said.
But others believe AT&T stock performance is also a reflection of start-up fever, with investors' money moving out of established businesses like AT&T and other incumbent communications firms into high-growth opportunities.
Banc of America's Mitchell has a 52-week target of $70 for AT&T. "The entire sector has been hit very hard," Mitchell said.
News.com's Corey Grice contributed to this report.