February 25, 2005 — (WEB HOST INDUSTRY REVIEW) — The board of directors for Web hosting and Internet services provider MCI (mci.com) has received a revised acquisition offer from Qwest communications (qwest.com)and is currently mulling the offer, the company said on Thursday.According to reports, Qwest has upped its offer to the $8 billion rangeand is pushing hard for the acquisition because of fears that it mayhave a hard time remaining independent as the telecom industrycontinues to consolidate.
Earlier this month Qwest Communications went into talks with MCI about a reported 6.3 billion takeover. At the same time, MCI was also reported to be in preliminary talks with Verizon.
But just a week after news of the Qwest offer broke, Verizon offered to buy MCI for a reported $6.7 billion, a deal that was accepted by MCI just a few days later.
The acquisition of MCI would immediatelymake Verizon a player in Web hosting, particularly in the enterprisespace. According to research and analysis firm Netcraft (netcraft.com),MCI is the world’s ninth largest host, home to 878,000 hostnames. MCI’scustomer base, Netcraft says, has been growing at a rapid pace, adding233,000 hostnames in the last year, with 61,000 coming in the last twomonths alone. MCI’s high-profile hosting clients include The WeatherChannel and Bloomberg.
MCI has reportedly been looking to sell for several months. However, the recent SBC acquisition of AT&T intensified the pursuit of MCI.
Last year MCI emerged from the largestbankruptcy in corporate history and is reported to have only $6 billionin debt to go with $6 billion in cash.
