Feb 21, 2003 : The webhost industry: week review

📅 February 21, 2003 - The Web hosting industry saw a long list of significant announcements this week, most notably a number of acquisitions by companies operating in and around the business, along with several significant personnel and business decisions.
On Monday, Major search engine operator Google announced that it had acquired software company Pyra Labs, developer of the popular publishing software Blogger. The software currently has 1.1 million registered users, and is used to power the popular Blog*Spot Web log hosting service, also operated by Pyra. There has not yet been any final word on what opportunities Google expects to pursue as a result of the acquisition.
On Wednesday, Internet security company TruSecure announced the purchase of security service provider Vigilinx and its flagship Vigilinx service. TruSecure says Intellishield will provide the platform for TruSecure to integrate and automate the delivery of its services in a format customized to each TruSecure customer. The combined solution will allow administrators to manage security postures against new threats in real time.
On Thursday, application delivery and managed hosting provider eNucleus announced that it had completed the first acquisition to come as a result of the company's new acquisition program, designed to build strategic assets that will generate income and shareholder value. eNucleus says the first acquisition came through the Health ASPx division, which has exceeded expectations for revenue and profitability.
Also on Thursday, Internet software developer Sequiam announced that it has completed its acquisition of substantially all the assets of document management and software applications company WMW Communications. Sequiam says the acquisition, which became effective November 1, 2002, closed on February 18, 2003. Along with its document management services, WMW operates as an ISP, providing high-speed Internet access and Web hosting services across the country.
While a number of companies are clearly in an expansion mode, other companies are in the process of evaluating their businesses to determine where cuts can be made, and whether more dramatic measures are necessary.
On Wednesday, enterprise solution provider divine announced that, after months spent working to minimize expenses and liabilities, the company's board will begin seeking alternative means of protecting the value of its operations. The company has hired Broadview International LLC as an advisor in exploring strategic options, which could include filing a petition under Chapter 11 of the US Bankruptcy Code.
Finally, along with both the acquisitions and the reorganization, came several announcements regarding management shifts at several companies operating in the Web hosting business.
On Tuesday, communications carrier Level 3 Communications announced that it had appointed John T. Reed, a director of merchant bank McCarthy Group, Inc. and chairman of HMG Properties, to its board of directors. According to Level 3, the addition of Reed brings the company's board of directors to 13 members. Reed will join Class III of Level 3's board of directors, whose term expires at the company's 2003 annual meeting of stockholders.
And on Thursday, Web hosting automation solutions developer Sphera announced that it has begun searching for a new CEO, following the departure of its previous chief executive Tamor Naor. In the interim, Sphera board member and Gemini Israel Venture Funds partner Adi Pundak-Mintz will serve as acting CEO, replacing the departing Naor.
While acquisition was the most notable theme in this week's Web host industry news, the notable theme among the acquisitions themselves was the expanding of services. While acquisitions are often conducted to acquire clientele and other assets, many of this week's buyers acquired companies offering products or services that complimented or expanded their own services. While it may have a higher price tag, this method certainly shortens the development period involved in launching new services.