Apr 11, 2003 : The webhost industry: week review

📅 April 11, 2003 - While the Web hosting industry seemed to be responsible for fewer of the major announcements that have become almost commonplace in the past few months, it was an interesting week nonetheless, as it saw the release of statistics and reports from a number of researchers, as well as several acquisitions and management changes.
On Monday, Web hosting provider Frontline Communications announced that it had closed on the acquisition of Mexico-based cellular phone air time provider Proyecciones y Ventas Organizadas, S.A. de C.V. (Provo). The closing, said Frontline, resulted in the issuing of 220,000 shares of Frontline series C convertible preferred stock to Provo shareholders. The acquisition will be presented to Frontline shareholders for approval of certain matters related to structure.
And on Tuesday, application outsourcing provider BlueStar Solutions announced that it had finalized the acquisition of Colorado-based application service provider Agilera Inc., which had since become a wholly-owned BlueStar subsidiary. BlueStar said the acquisition dramatically broadens its range of service offerings, increases its market share and results in greater financial strength and stability.
Along with the acquisitions announced this week, another hosting provider announced the appointment of a new addition to its management team.
Hosting provider ZooLink Corporation announced on Monday that it had appointed West McDonald as the company's director of sales and marketing. He will be responsible for managing the company's sales force, building the client base and establishing North American channels to market, as well as expanding the company's service offerings in Canada and the US. Before joining ZooLink, McDonald was manager of Western Canada for Internet carrier PSINet.
Beyond the acquisitions and appointments, this week's most notable development was the collection of reports and predictions released by several research organizations.
On Monday, Web hosting research and consulting organization The ebi Group announced that it had released its 2003 Hosting Reseller Resource Guide. The report details 200 providers of reseller-specific products, services and information, including billing and support systems, hosting control panels, email tools and services, support services, shopping carts, e-commerce security, site-creation tools, search engine marketing services and industry news and discussion sites.
On Tuesday, it was reported that a new report by research organization IDC forecasts substantial growth to the stable and growing xSP market over the next few years. The study predicts that the market, worth $234 billion in 2002, will grow at a compounded annual growth rate of more than 17 percent to reach almost $530 billion in 2007. The study says xSPs reported growing customer interest in late 2002 and early 2003, following a retreat through 2001 and most of 2002.
And on Thursday, it was reported that a new report by research firm TeleGeography identified the struggling long-haul bandwidth industry as close to reaching bottom after three years of ongoing bad news. International Bandwidth 2003 says new network construction is at a standstill, consolidation is reducing the number of competitors and long-haul bandwidth prices in the US and Europe are stabilizing after falling as much as 70 percent in recent years. The report also refutes rumors of a price war being waged by bankrupt carriers.
While this week's Web hosting news may have lacked the high-impact stories of major acquisitions, bankruptcies and scandals that we've come to expect with regularity from the communications business, it delivered uncommonly well in other areas, most notably in the release of a considerable amount of work from some of the research and consulting organizations operating in the Web hosting business.