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Adam Eisner, theWHIR.com
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September 22, 2001 — In its first week of sessions following the terrorist attacks of September 11, virtually every North American market went in to a free-fall as nervous investors worried of a global recession.
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Markets resumed trading Monday after a four-day shutdown. The Nasdaq and Dow fell at unprecedented rates all week, and by Friday’s close blue chips had suffered some of their worst losses since the Depression.
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As the Web hosting industry struggled, like the rest of the word, to return business as usual, a number of companies made kind gestures to help those affected by recent events.
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A number of hosting companies established disaster hotlines and recovery services, including Verio, Cervalis and Inflow.
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Other firms, including BellSouth and AT&T, donated both money and calling cards to campaigns assisting New York residents.
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As companies tried to resume business, a number of hosting firms made announcements outlining partnerships, job cuts and earnings this week. Perhaps the biggest of these was an announcement from Verio Tuesday that the company would slash 750 jobs and close approximately 25 data centers and offices.
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The job cuts, which represent approximately 25 percent of the Web hosting firm’s workforce, are part of a new plan to streamline operations. A spokesperson said most of the cuts would affect U.S. workers in “back office” operations outside of Verio’s headquarters in Arapahoe County, which houses about 200 workers.
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“Many of these decisions are difficult ones and aren’t taken lightly,” Alain Andreoli, Verio’s president and chief operating officer, said in a written statement. “But to be agile in responding to business opportunities in today’s environment, they are essential.”
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Verio lost $777 million on revenue of $328 million last year.
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Linux specialists Red Hat released their earnings Tuesday, posting a slim loss in its quarterly report. The company announced an adjusted loss of $100,000, while analysts had expected the company to break even.
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Shares in Red Hat lost about 75 cents on the news, but quickly recovered its losses and even gained some. Investors seemed to be slightly encouraged by the fact the company only posted a slim loss, and shares closed at an impressive $3.51 Friday afternoon.
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There was some good news from European communications firm Ebone this week, as the company announced Wednesday that Lycos Europe and German IP business provider mediaWays had signed a three-year, multi-million euro agreement to use the company’s IP and broadband network. As a result, the companies say customers and partners should receive quicker and more accurate access to its European websites and multi-media content.
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And finally, clients of Exodus Communications were introduced to the company’s new leader over the weekend via a letter from Bill Krause, the company’s new CEO.
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Krause replaced Ellen Hancock earlier this month.
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In his letter to customers, Krause assured customers the company would be able to get itself out of financial trouble. Exodus, which has over 4,000 customers, 44 data centers and 3,000 employees, has seen its stock tumble to under a dollar from a high of close to 60 dollars less than a year ago.
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“To be perfectly clear, Exodus is not going away,” he said. “I am confident our current financial challenges can be fixed with the help of clear leadership and a tough-minded approach to managing the business for profitability. That’s why, along with Exodus’ team of experienced senior executives, I have rolled up my sleeves to get on with the job of rebuilding Exodus into the successful enterprise we all know it can be.”
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Shares in Exodus closed at 46 cents Friday.
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Will there be a global recession because of last Tuesday’s events? Economists say it’s difficult to tell. Will markets recover? Analysts aren’t sure. One thing, however, is for certain – as devastating as these attacks were, you can be sure that everyone will be looking to rebound from them as quickly as possible.
