EIG-IPOWER Deal Forms Hosting GiantBy Justin Lee, theWHIR.com
May 18, 2007 -- (WEB HOST INDUSTRY REVIEW) -- Domain registrar and hosting provider IPOWER (ipower.com) and shared hosting provider Endurance International Group (enduranceinternational.com) caught the industry by surprise this week after they announced that they joined forces via a high-profile merger.
The companies have combined their more than 600,000 Web site customer portfolio to create the third-largest shared hosting company in the United States.
Prior to the merger, both companies were considered significant Web hosting powers in their own right, offering a range of hosting services to their respective customer bases.
The merger enables the companies to continue operating as separate and equal entities with their own brands, while pooling together their strengths to deliver quality hosting, Web site services and support.
Endurance, located in Burlington, Massachusetts, has had an extensive history of successful acquisitions, which it has largely used to expand its operation. As a result, the company has built somewhat of a reputation for its operational efficiency, especially in transferring its acquired hosting customers onto its technology platform.
The Phoenix, Arizona based IPOWER, on the other hand, has found equal success in its marketing and customer acquisitions, helping the company achieve effective organic growth.
By joining the individual strengths of the two companies with their combined influential backend capabilities, the new organization says it will be able to offer its combined customer base outstanding hosting and innovative new products and services.
"The sharing of our various exceptional resources will greatly benefit both operations," says Joanna Leblang, marketing services manager for IPOWER. "The combination of IPOWER's strong marketing abilities and Endurance's comprehensive backend solutions will allow the merged company to become a very scalable entity with unlimited potential."
IPOWER CEO Thomas Gorny and Endurance International CEO Steve Sydness will continue performing in leadership roles for their respective companies without either company consolidating any executive positions. Leblang says that this should allow continuity for customers and that they need not worry about seeing any sudden changes.
"Since we will operate as independent companies, there will not be any immediate impact to our customers," says Leblang. "Over time, we will look at combining appropriate resources to keep costs down and generate efficiencies. We believe that customers will receive an even higher level of service in the future from the streamlining of these efforts."
The merged organization will, however, see a slight adjustment in its employee roster. An estimated five percent of IPOWER's 300 employees will be eliminated because of overlap of positions brought on by the merger.
Fortunately, some of those employees will likely be offered other positions because the two firms will still continue to hire. Meanwhile, Sydness says that none of Endurance's 280 workers would likely be eliminated, says Gorny.
Overall, Leblang says the merger will transform the new organization into a formidable hosting competitor, while having a positive impact on the two companies and their customers.
"The end result [of the merger] will be a new level of strength and flexibility that will ultimately benefit our customers," says Leblang. "We will be able to offer them a breadth of innovative products and services that will significantly help them in ways they may have not even imagined before."
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