Liam Eagle, theWHIR.com
February 4, 2004 — (WEB HOST INDUSTRYREVIEW) — It wasn’t the pure play Web hosting companies that made thebiggest news this week, but the movements of some of the world’slargest telecommunications firms, and the inevitable impact of thosemovements on the Web hosting business.
The biggest story in the Web hostingbusiness this week, and in the business world in general, was Monday’sannouncement by telecommunications carrier SBC Communications that ithad entered an agreement to acquire AT&T for $16 billion,creating the largest telecommunications company in the US. Reports saythe deal will boost SBC’s Web hosting profile, as AT&T hosts acollection of high-profile customers, including Kodak, MarriottCorporation and several US government agencies.
On Thursday, it was reported that Qwest Communications was in discussions for a potential takeover of MCIcreating the possibility for another major telecommunications merger.MCI has reportedly been looking for a buyer for several months, but hasseen an increase in interest since reports of the SBC and AT&T dealfirst surfaced. MCI is said to be considering the $6 billion Qwestoffer, but may be holding out for a more lucrative deal. The companyhas also reportedly been in talks with Verizon Communications.
In a story not related to mergers, butincluding a case of similarly large companies strengthening theirbonds, Sun Microsystems and EDS said on Wednesday that they are in theprocess of negotiating a new eight-year managed services contractthat would see EDS migrate Sun’s data centers to the EDS AgileEnterprise Platform. The companies also announced that they haveentered an agreement to jointly deliver IT and utility computingservices based on Sun’s Solaris 10 operating system to large enterprisecustomers.
Close in terms of impact this week wasnews from the domain registration busines, where this week’s big eventwas the addition of Google among the ranks of accredited registrars.
On Monday, it was reported that Google had become an ICANN-accredited registrar,approved to sell seven top-level domains, including .com, .net, .org,.biz, .info, .name and .pro. The move, among several other recent movesby Google, fueled some speculation that the company might be looking tomove into the Web hosting business. Google operates the free Bloggerservice, which would provide a large market for potential hosting anddomain customers.
The domain business has been prominent inthe news lately as ICANN works to narrow the nominations for a newoperator for the .net domain. On Monday, market research firm PennSchoen & Berland Associates announced that it had released an independent studyshowing that .net registrars prefer the idea of increased competitionin the generic TLD registry market, with almost 9 out of 10 registrarsresponding that no company should be allowed to monopolize the marketfor generic TLD registries. Five applicants are currently beingconsidered to take over the operation of the .net registry.
In addition to the major moves in thetelecommunications and domain registration spaces, there were someinteresting developments directly from the Web hosting market, asseveral companies added whole new sections to their services.
On Wednesday, Web hosting automation software developer SWsoft announced that it had introduced HostAdvantage,a service designed to enable hosting providers to offer customerssearch engine optimization, email marketing, domain registration andother value-added services at discounted prices. The services areprovided through partnerships with a collection of vendors thatincludes Overture, Submitnet, IntelliContact, Constant Contact andGlobal Name Registry.
And on Thursday, Web hosting provider CrystalTech announced that it had introduced CTFinance,a program that offers loan services approved by the US Small BusinessAdministration to small and medium-sized businesses. CrystalTech sayscustomers who meet loan qualifications are eligible for loans rangingfrom $25,000 to $2 million. The service is offered through apartnership with Newtek Small Business Finance, another subsidiary ofCrystalTech parent company Newtek Business Services.
While the big news this week was varied,the stories that might have the biggest impact in the coming weeks werenot the very biggest of this week’s stories. Most significant in thecoming weeks will likely be the possible sale of MCI. And many in theWeb hosting business will be watching to see what Google does with itsnew status as accredited domain registrar.
