Aug 3, 2001 : Public Web Hosts - Last Week in Review

📅 August 3, 2001 - The Nasdaq was mired in negative territory Friday, thanks largely to pessimism on the part of many investors who remain unconvinced that markets have bottomed out.
The tech-rich index has closed in positive territory six out of the last seven sessions, and many seemed to be concerned about false optimism. This ensured the index stayed in the red today, particularly after the recent flurry of warnings from the tech sector.
This all but erased most of the gains many public Web hosting picked up throughout the week.
The pessimism was evident todayt after Vancouver-based Web hosting company NetNation Communications reported their quarterly earnings this morning.
The company turned a profit and posted record revenues, but investors were unimpressed.
"We achieved an admirable change in our cash position, "said Joseph Kibur, NetNation CEO. "In addition, we were pleased to strike agreements with several large and leading Web companies." NetNation partnered with a number of notable sites over the quarter, including Lycos. Shares in NetNation were down 2.6% to $1.95 in mid-afternoon trading on Friday.
Thursday was a big day for financing, as two major Web hosting firms announced new cash infusions. InFlow, Inc. announced it had raised an additional $35 million in private equity financing, which they said would be used to continue developing their 18 operational Internet Data Centers. Meanwhile, Primus Telecommunications said it had secured approximately $17 million from a vendor to finance previously committed network capacity purchases.
Wednesday wasn't a great day for a couple of major Web hosting companies. A report released by Gartner Research suggested customers of Exodus Communications should begin to consider alternative hosting options if the company's financial health continues on its downhill path.
The report did little to shares in Exodus, however, and the company's stock actually picked up more than 20 cents between Thursday and Friday, bringing shares in the company to approximately $1.50 by Friday afternoon.
Wednesday was also a dark day for Navisite, who said they would cut 25 percent of their staff, or 126 employees, in an effort to manage costs. The company said the reduction was the result of the company's financial report last month, which showed a quarterly loss nearly double the size of last year's loss.
Navisite shares have been taking a beating lately, and are currently trading in the 75 cent range.
Hosting firm Verado upgraded its DNS services Tuesday after selecting UltraDNS Corp. to support its outsourced managed services and data center solution offerings. UltraDNS provides an integrated, outsourced service for the Internet's Domain Name System (DNS) that is designed to help ensure users are reliably connected to their Internet destination. The addition complements the company's recent completion of their nationwide network, which connects each of its data centers and provides the centers with access to a wide variety of peering and transit partners through its multiple OC-3 and higher capability connections. The company's Cisco Powered Network is now expandable up to OC-48 links.
And finally, privately-held Q9 Networks Inc., a Canadian provider of outsourced infrastructure services, announced early Tuesday it had added managed Virtual Private Network (VPN) services to complement its managed firewall and backup/restore solutions. The company now offers a fully managed site-to-site VPN solution that allows customers to remotely access information residing on servers in Q9 data centers.
The Nasdaq has been mired below the 2,100 mark for a couple of weeks now, and there seems to be little optimism among investors and analysts that things will improve any time soon despite recent positive sessions. Perhaps if the index proves them wrong next week and stays up, many will be singing a different tune by the end of August.