Aug 10, 2001 : Public Web Hosts - The Week in Review


📅 - The Nasdaq was again mired in negative territory late Friday afternoon, poised to cap off a week spent mostly in the red with yet another loss.
The tech-heavy index dipped well below 2,000 on Wednesday, and was still stuck in the 1950 range by late Friday.
Analysts and investors placed most of the blame on recent sell-offs in the software sector and upcoming earnings reports.
Primus Telecommunications joined the earnings parade when they reported their Q2 results yesterday after the bell. The company posted net revenue of 2001 was $271 million, compared with $300 million for the second quarter of 2000, and $289 million (before one-time charges) in Q1.
Investors reacted by knocking the stock down approximately 13 per cent in trading Friday. By late afternoon, shares in the company were trading at $1.06.
Managed service provider Loudcloud, brainchild of Netscape founder Mark Andreesen, got a bit of a boost on Thursday when shoe giant adidas-Salomon AG announced it would outsource its Internet operations to the company. Adidas takes their site very seriously and considers it a "significant marketing channel", as it garners millions of page views per month.
Shares in Loudcloud were trading at $1.61 Friday afternoon.
Wednesday was an extremely busy day, chock-full of announcements, earnings and research. If you're a Microsoft fan (and even if you aren't, there's a good chance your Web server is running Windows NT or 2000, so pay attention), you'll be interested in knowing that the software giant announced the general availability of Microsoft Content Management Server 2001. The software suite essentially helps companies manage their dynamic Internet content.
Web hosting firm Verado released their Q2 earnings Wednesday, posting revenues of $4.4 million, which met the company's guidance. This compares to $5.2 million in the first quarter of 2001.
"With the recent announced sale of our DSL customers, Verado has essentially completed the divestment of its non-core business assets," said Tom McGrath, the company's CEO. "These divestments will improve our financial standing going forward, while we position Verado as a leader in the Web hosting, managed and professional services industry. We believe our service will be the differentiating factor in the industry."
Shares in the company were down 11 percent at 15 cents Friday afternoon.
Also of note Wednesday was an interesting release from consumer advocacy research group New Networks, which placed the tech sector's recent woes directly on the heads of Baby Bells.
The report, titled "The Bells and the Current Recession: The Fiber Optic Fiasco and America's Copper Dirt Road," claims the failure of Bell companies to roll out promised broadband services and anti-competitive behavior has scared away investment.
"The Bell Companies are doing exactly what one would expect them to do," said Bruce Kushnick, executive director of NNI in a statement. "They are defending their legacy investments. But in locking out competition and innovation so effectively, they are hampering the recovery of the tech sector and the economy at large. Congress and the Administration should be aiming to act immediately to address and fix the bell caused problems, or the economy will continue to suffer."
One of the world's largest Web hosting came one step closer to reality Tuesday when shareholders of Web hosting firms Interland and HostPro overwhelmingly approved the merger of the companies in separate shareholder meetings.
The companies announced the signing of a definitive merger agreement on March 23, 2001.
"Not only do we gain scale and efficiency, but with more than $200 million in cash and very low debt, we are fully funded and positioned to take advantage of a consolidating market," said Ken Gavranovic, Interland's CEO.
Monday saw a less-than-stellar start to the week for European telecom Global Telesystems (GTS), parent company of hosting firm Ebone. The company reported that the New York Stock Exchange's Review Committee upheld the June decision to suspend the trading of GTS shares, and would seek a de-listing from the SEC.
GTS said it would not take any action on the matter, as the de-listing did not affect the company's day-to-day operations. Shares in GTS currently trade on the OTC Bulletin Board under the ticker symbol GTLS.
After a week of poor performances by the tech-heavy index, investors can only look forward to next week and hope the Nasdaq can make up for some of its losses. We've already passed the mid-point for 2001, and frankly, things still aren't looking very good for tech stocks, whether related to Web hosting or otherwise.

Reads: 1644 | Category: General | Source: TheWHIR : Web Host Industry Reviews

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