Jul 23, 2004 : The webhost industry: week review

📅 July 23, 2004 - There are plenty of influences moving the Web hosting industry at any given time, many of them issues that come and go. But there are obvious trends that influence the hosting business on an ongoing basis, and this week, most of the biggest news in Web hosting business related directly to mergers and acquisitions among hosting companies.
On Monday, Web hosting firm Globix announced that it had merged with optical networking firm NEON Communications. NEON will become a wholly owned subsidiary of Globix, with data centers in New York; Atlanta, Santa Clara and London as well as remote data center and colocation sites along NEON's network in New York, Baltimore, Philadephia, northern New Jersey and throughout New England. NEON shareholders will receive approximately 27.6 million shares of Globix stock, representing roughly 56.7 percent of the outstanding shares in the combined company.
On Tuesday, European Web hosting provider Host Europe announced that it would be folded into the brand of new owner Pipex Communications, and will be known as Pipex Communications Hosting. Host Europe's domain, hosting and server lines, 123-reg, WebFusion, Magic Moments and Dedicated Servers will continue to exist as sub-brands. Pipex, which acquired Host Europe in April, says the acquisition has placed the company in a position to deliver an expanded range of products and services, while adding to the value of the Host Europe business with its fiber network and data center facilities.
On Wednesday, Web hosting provider Hosted Solutions, until recently known as Springboard Managed Hosting, announced that it had acquired a data center and customers from Redundant Networks. The data center, located in Raleigh, North Carolina, covers 14,000 square feet, including 12,000 square feet of cages and rack space. Hosted solutions said the acquisition, valued in the "high six figures," gives the company a significant footprint in the Carolinas. Hosted Solutions is planning to expand its workforce by at least 10 employees.
On Thursday, Michigan-based Web host and ISP The Iserve Co. announced that it had acquired the customers of Internet service provider Renegade Productions Inc. Iserve will acquire Renegade's current customer base in a number of Michigan counties, and will continue to offer customers service using the same dial-up numbers and email addresses. The deal will connect Renegade customers to Iserv's network, providing access to the company's range of connectivity, data center and Web services.
Also on Thursday, Web hosting provider Zoolink Corporation announced that it had finalized the sale of its Zoolink Communications division to Internet service provider Universco Broadband Networks, a deal first announced in May, and signed a letter of intent to acquire Puerto Rican local exchange carrier ICEnetworks. Universco says it has been integrating Zoolink customers into its network with minimal disruption, adding that few customers had experienced any disruption in their service.
And again on Thursday, Internet exchange operator announced that it had entered into an agreement to acquire the Technology Center of the Americas, a 750,000 square foot data center facility located in Miami, and home to Terremark's own NAP of the Americas. Terremark said it would pay $40 million and assume $35 million in debt. The company says it is currently considering financing options, and expects the deal to close before the end of September. Tenants of the facility include NAP of the Americas, Global Crossing, Sprint and the city of Miami's Downtown NET office.
This week's flood of acquisitions news in the Web hosting industry serves as a concrete reminder of the kind of constant and formative influence that acquisition activity has on the business, a matter of strategy given considerable weight by many hosting companies looking to expand their presences or operations.