There are a lot of reasons to enter the US market if you are from Canada. The US is a big market. This week British Columbia based Hosting Nation acquired two US firms; Hosting With Us and Domains With Us – each out of Atchison, KS – looks like sister companies.
Although I usually don’t connect the words “Grass roots” and “International” in the same sentence the GM of Hosting Nation said, “We have put a lot of energy into grass roots marketing efforts, but it’s always been a part of our plan to expand internationally.”
Lets look at some potential reasons to do this deal:
Easy transportation: Vancouver BC to Kansas City, KS are probably better for frequent flyer miles than convenience. I don’t think it is that.
Exchange Rate: Since last July, the Canadian dollar has lost about 18% against the US dollar. I don’t think it is that.
Marketing: By being in both the US and Canada each group can provide “Off Shore” hosting, hmmm possibly.
It was a great deal: This is where I will stake my flag.
All companies involved in the deal are budget priced hosting companies. In checking out Alexa, it seems that Hosting With Us is a decent brand. And it may provide the synergies that Hosting Nation also highlighted in the press release. But my bet is that Hosting Nation got a good deal.
MARKETING – In my discussions with firms one of the topics recently has had to do with being “off shore”. There are many reasons for this; “offshore” backup, currency/economic considerations, privacy of data, marketing leverage, branding and possibly a separate network.
The one thing we are sure of is that Canada is cheap compared to 18 months ago. Buying Canada may be good timing.
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