Sep 6, 2002 : The webhost industry: week review

📅 September 6, 2002 - While the struggles of the communications business have stretched back past the beginning of this year, with bankruptcies in telecommunications and failures in the Web hosting industry, the business has begun to demonstrate signs of recovery including some uncommonly positive announcements this week from both telecoms and hosting providers.
Integrated communications provider Allegiance Telecom said on Tuesday that it has renegotiated the payment schedule for its $563 million integrated data network solution contract with its largest customer, struggling network services provider Genuity.
Genuity has been reorganizing its business since July, when the company's former Parent Verizon declined its option to re-acquire a controlling stake in the company.
On Thursday, communications carrier 360networks, one of the earliest in the recent string of telecom bankruptcies, announced that its plans for reorganization had been approved by a Canadian court on Wednesday. US creditors will vote this month on the plan, which would see the company's US and Canadian subsidiaries combined to form a North American-based operation.
360networks told the courts that it has found a buyer for its transatlantic cable, which runs from Halifax, Nova Scotia to Ireland. The company did not identify the buyer, but described it as a "North American financial institution."
In news limited more specifically to the hosting business, Web hosting giant Interland announced on Tuesday that it has acquired Miami, Florida-based Web hosting company iNNERHOST. The announcement marks the latest in a string of acquisitions stretching over the last nine months, including the small business hosting accounts of Interliant and AT&T, as well as the corporate acquisitions of CommuniTech.net and Dialtone Internet.
Both the current conditions and the future potential of the service provider market were examined in reports released this week by several leading research organizations.
The Insight Research Corporation announced on Tuesday that it had released its forecast of developments in the hosting market, titled "Web Hosting and Managed Services 2002-2007." The report offers insight into the state of the Web hosting industry, and projections for future growth in the businesses of colocation and shared and dedicated hosting.
On Wednesday, research group Gartner announced that, according to a study by Gartner unit Dataquest, the worldwide service provider router market fell during the second quarter of 2002. Sales for the service provider router market, said Gartner, were down 7 percent from the previous quarter, totaling $494 billion.
Big decisions were also made this week in several other businesses related to the Web hosting industry.
On Monday, content delivery network service provider Akamai announced that the Nasdaq stock market has approved the company's request that its securities be transferred from the Nasdaq National Market to the Nasdaq SmallCap Market.
And later in the week, the Internet Corporation for Assigned Names and Numbers is reported to have threatened to rescind VeriSign's domain-registering rights, accusing the company of breaching its contract by failing to repair inaccurate whois information in a timely manner. ICANN cited 17 examples from the last 8 months that have yet to be repaired, including several examples of obviously fake information, giving the company 15 days to correct the problem before it would face stricter retribution.
VeriSign said the issue would be resolved within a week, adding that 17 inaccurate entries out of 10.3 million is hardly a pattern.
With a notable decline in the amount of tragic or devastating news from the communications sector, companies are beginning to talk about restructuring and refocusing their businesses for recovery. And while that recovery period will undoubtedly be long and slow, it is certainly positive that Web Hosting companies are beginning to look toward growth once more.