Nov 9, 2001 : The webhost industry: week review

📅 November 9, 2001 - The Nasdaq began the week on a strong note, posting a three-day rally before heading back in to negative territory on worries about continued corporate losses.
A number of firms related to the Web hosting industry reported their quarterly earnings this week, garnering mixed reactions from investors.
Metropolitan fiber provider Metromedia Fiber Network (MFN) reported Wednesday, posting a wider loss than a year earlier because of acquisitions and network expansion, but said it expected a positive cash flow by early 2002. Shares in MFN jumped noticeably higher on the news, but had sunk below Monday's 75 cent opening price by Friday morning, trading at 68 cents a share.
Meanwhile, Web hosting firm Data Return, which was recently acquired by divine Inc., reported its earnings Thursday after the bell. The company said it had Q2 revenues of $12.2 million, compared to $12.4 million last year and $13.6 million in the previous quarter. Shares in the company gained about four cents on the news, and were trading at 76 cents Friday morning.
Data and connectivity firm XO Communications also reported Thursday, posting a narrower Q3 loss. The company trimmed its losses to $50.8 million, or 12 cents a share, from $436.5 million, about $1.20 a share, a year earlier. Investors seemed less than pleased, however, and sent shares in XO from $1.40 on Thursday to $1.05 Friday morning.
In other news, Internet connectivity firm Internap said Thursday that co-founder Paul McBride had stepped down as the company's Chief Financial Officer.
McBride will stay on as CFO while a suitable replacement is found. The company also said that John Scanlon, previously Vice President of Service Planning at Internap, would become Vice President of Finance immediately.
Internap shares were trading at a dollar Friday.
Worldport Communications, a managed hosting provider that focuses on the European market, also introduced an executive change Thursday. The company appointed former Exodus Communications executive Darren Metherell to head its new business sales channel in the UK.
Metherell, who has over six years of sales experience in the Internet industry, becomes Worldport's new sales manager.
Meterell was previously sales director at Exodus, which recently filed for Chapter 11 bankruptcy protection. At Exodus, was responsible for the company's regional sales efforts.
On Wednesday, Linux specialists Red Hat and hardware firm Hewlett-Packard HP said they would grant 40 universities free copies of the Red Hat Linux operating system. This grant is part of the Itanium-based Systems Grant program operated by HP and chip maker Intel.
On Tuesday, hosting automation provider Ensim and Macromedia, provider of the ColdFusion programming environment, announced a distribution agreement which will allow providers using Ensim's ServerXchange to host sites developed in ColdFusion, giving greater flexibility to Web hosts.
And on Monday, tech giant IBM and IT service firm International Business Systems, announced a new integrated server offering to help small to mid-sized enterprises automate their supply chains. The IBM eServer for IBS provides small to mid-sized wholesale distributors and manufacturers an integrated supply chain solution that is easy to deploy and manage.
Despite a shaky earnings outlook for many companies in the near future, investors can take solace in the fact that the Nasdaq has picked up 28 per cent since hitting a three-year low in late September. Hopefully this will help the tech-heavy index to build on some of the gains made this week as we head well in to November.