May 31, 2002 : The webhost industry: week review

📅 May 31, 2002 - This week served as a reminder of just how tough the communications industry can be, with some of the high tech business's most high-profile failures making headlines, even as they worked to deal with their own demises.
The long saga of crumbling European communications firm KPNQwest drew closer to a close this week, first with the company announcing it had begun discussions with court appointed administrators E.T. Meijer and J.C. van Apeldoorn, following its filing for a moratorium.
The company announced later in the week that it would be advising its customers to arrange backup connectivity plans with other providers to prepare for the possibility that KPNQwest will have trouble keeping its network online. The company said was "proactively working with its customers to assist with these plans."
KPNQwest also said that talks had fallen through on a deal it had been working on to sell most of the company. Reuters reported that the company is on the brink of financial collapse and would likely be sold off piece by piece.
But according to reports late in the week, KPNQwest may yet have a suitor in telecommunications Giant AT&T, which is said to be preparing an offer for the company.
All this places KPNQwest in much the same position as one of the most recent tech crunch casualties, Global Crossing, which continues to face ongoing struggles, even on the auction block.
Discussions regarding the sale of the bankrupt telecommunications firm fell apart over the weekend, as Global Crossing creditors refused the offer of $750 million for 79 percent of the company, made by Asian bidders Hutchinson Whampoa and Singapore Technologies Telemedia Pte. Ltd. The deal, five months in negotiations, fell short of a purchase as the bidders reportedly refused to raise their price due to a lack of other interested buyers.
Global Crossing subsidiary, Asia Global crossing, which has been seeking investment since the parent company went bankrupt in January, made some positive news this week when it was reported that fixed-line phone company China Netcom Communication Group is planning to make a bid for the company.
One purchase that was successfully accomplished this week was made by Canadian Web hosting firm Radiant Communications. The company said it more than doubled its hosting customer base with the purchase of approximately 7,700 retail Web hosting customers from Toronto-based InQuent. Radiant expects the new customers will generate $1 million in new revenue for 2002.
InQuent said it would continue to provide wholesale Web hosting services to Radiant, as the sale of its customers completed its transition to the wholesale Web hosting model.
Legal decision-making had a big impact on the Web hosting business this week, first as Web hosting company Pro Hosters was asked by the Federal Bureau of Investigation to remove video footage of the murder of Wall Street Journal reporter Daniel Pearl from a site hosted on its servers. The site, Ogrish.com, voluntarily took down the information after being notified by Pro Hosters.
After a short period of consideration, the company and its customer, backed by legal support from the ACLU, decided to restore the offending footage to the Web in an effort to make a First Amendment stand.
The US District Court of Massachusetts upheld a December jury ruling that Web hosting and content delivery firm Digital Island, now a property of Cable & Wireless, had infringed on several patents held by e-business and content delivery competitor Akamai.
Akamai said its motion for an injunction is pending before the court.
Amid the news of failing companies and abandoned deals, the Web hosting industry saw some new life this week in the form of products and services launched by a handful of companies.
Managed service provider VeriCenter launched a new suite of business continuity and disaster recovery solutions designed to keep critical Web operations running through unplanned interruptions.
Rackspace Managed Hosting announced a new partnership with Positive Software Corporation, and the launch of a virtual hosting automation system designed to help virtual Web hosting providers and resellers to manage all aspects of their businesses.
And infrastructure solution provider Interliant announced that it had introduced a new bandwidth management service, based on based on Packeteer's PacketShaper application performance management system. The service is designed to allow network administrators to identify and prioritize traffic, guaranteeing the performance of critical applications.
A big part of this week's news was unfinished business; in particular, the unfinished business of communication firms dealing with bankruptcy. In the near future we can expect to see important announcements from struggling companies like KPNQwest and Global Crossing as they succeed in selling off their assets, either all at once or piece by piece.