Sep 27, 2002 : The webhost industry: week review

📅 September 27, 2002 - While there was some major news, it wasn?t quite a week of earth-shattering announcements for the Web hosting industry. Rather, it was a week of strategizing, with a number of announcements and product launches illustrating the variety of ways in which hosting companies go about the all-important task of acquiring customers.
The week began, however, with some significant legal and regulatory decisions, including a government decision on the role of ICANN, and the announcement of more financial restatements in store for Qwest.
On Monday, it was reported that the US Department of Commerce had approved the Internet Corporation for Assigned Names and Numbers for another year of managing the Internet's global addressing system. The contracts extended by the DoC were set to expire at the end of the month.
Following the renewal of the contracts, ICANN said it would step up its efforts at internal reform. The DoC has said it was disappointed by the organization's lack of progress in addressing widespread concerns about the transparency of its decision making process, and charged ICANN with implementing an open, consensus-based system of governance that gives a meaningful voice to ordinary Internet users.
Also on Monday, telecommunications company Qwest said that it expects to restate $950 million in revenues and costs related to the sale of optical capacity, and may restate another $531 million in deals. The transactions to be restated include swaps of network capacity between Qwest and other carriers, including Global Crossing Ltd. FLAG Telecom and Cable & Wireless. Those transactions are to face further scrutiny in a series of hearings held by the HS House Energy and Commerce Committee. Qwest says that it continues to cooperate with investigation by the SEC and the Department of Justice, and believes that the additional restatement is a step toward the possible resolution of those discussions.
Along with the big decisions, the rest of this week saw a great deal of strategizing and positioning among both large and small Web hosting companies, as they introduced their new efforts at acquiring customers.
Internet access provider USURF America Inc. announced on Wednesday that it has signed a letter of intent for the acquisition of Colorado Springs-based ISP High Plains Internet. The companies had previously formed an agreement whereby HPI would offer USURF's wireless Internet access. Along with acquiring the additional distribution channel for its Quick-Cell wireless Internet service, USURF will acquire HPI's telecommunications infrastructure and Web hosting business. The companies say they expect a definitive agreement to be signed in the near future.
Data communication provider New Edge Networks announced on Wednesday that it has made an agreement to migrate certain of Cable & Wireless's US data communications customers. The deal follows C&W's earlier announcement that it planned to divest certain of its US data customers. According to the agreement, New Edge will honor the existing agreements between the customers migrated and Cable & Wireless. The companies will work together to ensure the seamless migration of about 1,500 customers.
New edge says the new business could increase the company's revenues by as much as $45 million per year. The company will pay fees to Cable & Wireless, based on the customers? actual monthly usage, over the next 12 months.
On Thursday, Canadian Web hosting provider NetNation Communications announced that it has launched its Hosting Acquisition Program, designed to offer service providers options for reorganizing their businesses through NetNation's reseller program. The acquisition program, says NetNation, features a number of options for smaller Web hosts, from transferring the management of their hosting customers to NetNation's infrastructure to the outright acquisition of their hosting accounts.
Also on Thursday, global service provider IBM announced that it has signed two new strategic alliance partnerships bringing the company's total number of partnerships focused on tackling mid-market customers to more than 30. Through two separate agreements with Clear Technologies and MAPICS Inc., IBM will offer CRM and ERP solutions, respectively, to mid-market customers.
And, in a move not designed to gain customers but the result of such an acquisition, Web hosting leader Interland said on Wednesday that it has filed a registration statement for the sale of up to 9.7 million shares of common stock. 4.2 million shares of common stock were issued to the selling partners, shareholders Spire Capital Partners LP, Spire Investments LLC and Walter-Sutton Media Partners LP, on August 30 by Interland as a result of the company's acquisition of Innerhost. The deal included another 5.5 million shares that may be issued under certain circumstances.
This week's demonstration of the Web hosting industry's efforts to identify and acquire new customers seems like a good sign for the business. Despite a long period of difficult conditions in the communications market, hosting companies seem committed to generating the business they need to work themselves, and the industry as a whole, out of the slump.