Digex Exploring Options, Possible Sale

Digex, the managed hosting arm of troubled WorldCom, sought to reinvent itself in July with a new business-continuity and disaster-recovery services strategy targeting enterprise customers.

At the time, Digex executives said WorldCom's bankruptcy filing and continued problems would not impact the services it provides to customers.

In June, Digex cut 86 positions, or 7 percent of its workforce, as WorldCom began cutting 17,000 jobs.

Last week, WorldCom said its earnings restatement might reach as high as $9 billion. The carrier already boosted the initial $3.85 billion in hidden capital expenditures uncovered in June by another $3.3 billion in improperly reported earnings for 1999, 2000, 2001 and first-quarter 2002.

Digex is expected to release its third-quarter earnings Tuesday.