Sep 9, 2005 : The webhost industry: week review

📅 September 9, 2005 - This week saw two of the largest Web hosting acquisitions in recent memory, as Interland sold its dedicated hosting business to Peer 1, and VIA NET.WORKS found a buyer for its European operations.

On Monday, Canadian Web host Peer 1 Network announced that it would acquire Interland's dedicated server business for $14 million, a deal that confirmed months of speculation. It added further fuel to speculation about Interland's future, as it followed the recent sale of the company's Hostcentric shared hosting assets to Caird Corporation in May. But Interland says the sale will create savings for the company, enabling it to specialize in providing shared hosting for small and medium-sized business. Peer 1 says the deal will further its existing foray into the dedicated hosting space, which began with the company's acquisition of ServerBeach in 2004.

Late last week, European network operator Interoute announced that it had agreed to acquire all the European operations of Web host VIA NET.WORKS. Interoute will acquire all VIA's operations in Spain, France and Germany, as well as its PSINet Europe operations in Germany, France, Belgium, Netherlands and Switzerland. The deal is a welcome conclusion to a hurried search by VIA, which had reached a similar agreement with Claranet before that company backed out.

Acquisition was a significant trend this week outside the two major deals, with several other hosts announcing notable acquisitions.

Web hosting provider Vortech announced on Tuesday that it had acquired colocation and dedicated server provider RocketColo.net. Vortech says the acquisition includes all of RocketColo's assets, including its network and servers. Both companies are located in the same data center, so they expect the transition of customers to be smooth. Vortech says it will upgrade RocketColo customers' plans to 1000 GB of monthly bandwidth for no extra charge, along with connectivity to a range of additional carriers.

On Thursday, Web hosting business 110 Media Group announced that it had signed a letter of intent to buy Web host Global Portals Online. Pending the meeting of certain closing conditions, 110 will acquire all the issued and outstanding shares of Global Portals Online common stock in exchange for a portion of outsanding 110 Media Group stock. Global Portals Online would become a subsidiary of 110 Media.

Along with the acquisitions, several Web hosts announced expansions through the opening of new data center facilities this week.

Data center operator 365 Inc. announced on Thursday that it had acquired a 131,000 square-foot data center in el Segundo, California. The company already operates the 365 Main data center facility in San Francisco. It made the expansion based on the success of its existing facility. The company says the El Segundo facility meets the same strict performance and security criteria as the 365 Main data center.

Web host C I Host said on Tuesday that it was opening a new data center in Newark, New Jersey, expanding the company's coast-to-coast range and providing its customers with greater opportunities for geographic distribution and load balancing. The facility also has a direct fiber connection to C I Host's planned London facility, which will enable private data transfer between the two facilities.

It is certainly unusual that two hosting industry events as significant as the Interland and VIA sales take place in the same week. And these two announcements should continue their significance in the coming weeks as the deals unfold. As VIA has recently demonstrated, deals that appear completed may not be beyond the point of being reversed.