Web Host Web.com Acquires Rival Host Network Solutions

By Justin Lee,August 03, 2011

 screenshot of the Network Solutions news section

(WEB HOST INDUSTRY REVIEW) -- Web hosting provider Web.com (http://www.web.com/) announced on Wednesday it has acquired host Network Solutions (http://www.networksolutions.com/) from private equity firm General Atlantic.

The announcement comes a full year after Web.com acquired Register.com in a high-profile, $135 million deal for the domain registration provider.

The acquisition will create an "end-to-end online solutions company with a clear path to $500 million in non-GAAP revenues," accorodng to the press release.

On a strategic level, the acquisition makes a lot of sense for Web.com since the two companies offer a comparable range of services aimed at the SMB market.

These services include web hosting, domain registration, web design, e-commerce solutions, online security products, SSL certificates, and search engine marketing and optimization.

Web.com said the combined company will be positioned to deliver "revenue growth in the low teens".

Upon closing, Web.com will pay Network Solutions $405 million in cash and issue 18 million shares of Web.com common stock. In addition, it will refinance the existing net debt of Network Solutions and pay certain fees.
"This transaction represents a unique opportunity to dramatically expand our scale, add further momentum to Web.com's already improving top line growth, and further expand our market share as the nationally recognized go-to provider of online marketing solutions specifically tailored to small and medium-sized businesses," said David Brown, chairman and CEO of Web.com. "Our integration strategy will be similar to our successful acquisition of Register.com, and we will be in a strong position to cross-sell and up-sell our services to Network Solutions' approximately two million retail customers and hundreds of thousands of wholesale customers. We believe this combination will provide significant long-term shareholder value as we grow our business, capitalize on synergies, improve our margins and generate substantial cash flow to invest greater resources in growth and branding initiatives."

The acquisition is expected to be completed in the fall, and at the close, General Atlantic and other current Network Solutions shareholders are expected to own about 37 percent of Web.com.
As part of the acquisition, Anton Levy, General Atlantic managing director and principal stakeholder in Network Solutions, will join the Web.com board of directors.

The combinted company is expected to earn revenue in the mid-$450 million range for 2011 and EBITDA of at least $120 million for 2011 before cost synergies and transaction expenses.

The combined companies have about 1,900 employees around the world and 3 million paying subscribers, which includes more than 9 million domains under management.

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Tucows Acquires German Domain Registrar EPAG for $2.5 Million

By Nicole Henderson,August 02, 2011

A small selection of TLDs available in Europe from EPAG

(WEB HOST INDUSTRY REVIEW) --Domain registrar Tucows (http://www.tucowsinc.com/) announced on Tuesday that it has acquired all the shares of EPAG Domainservices GmBH (http://www.epag.de/) from QSC AG (http://www.qsc.de/) for about $2.5 million in cash.

German-based EPAG is an ICANN-accredited registrar that manages more than 400,000 domains. The registrar offers more than 200 TLDs as well, according to the press release.

This acquisition will increase Tucows exposure to the German reseller market, as well as bolster its OpenSRS wholesale domain registration services.

Tucows says it will continue serving EPAG customers and resellers via existing EPAG tools. Tucows will integrate EPAG's domain services into its OpenSRS wholesale domain registration service, according to the report.

“We believe combining the power of OpenSRS’ 12,000 active resellers in over 120 countries with EPAG’s ability to register such a broad range of TLDs will make OpenSRS unique in the industry,” Tucows president and CEO Elliot Noss said in a statement. “We expect that the deep expertise in registry integration we gain from EPAG will add invaluable bench-strength to our team as we prepare for ICANN’s roll-out of new TLDs.”

In July, the WHIR interviewed OpenSRS director of product management Adam Eisner on ICANN's decision to approve new TLDs. Eisner will present at HostingCon 2011 (http://www.hostingcon.com/) on Monday, August 8, about what the new TLDs will mean to hosting.

With this acquisition, OpenSRS will now manage more than 11.5 million domain names and, by the end of the year, OpenSRS resellers will be able to access more than 200 TLDs.

Tucows says it had "relatively little exposure" to the German-language reseller market before this acquisition.

In an OpenSRS blog post on Tuesday, Eisner says existing resellers can expect to see "significant gTLD and ccTLD coverage improvements, with a particular focus on regions like Europe, South America and Asia."

Since 2000, EPAG has specialized in the management of domains for domain resellers and  small and medium-sized enterprises.

Last month, web hosting provider ResellerClub launched customized programs in the UK and German markets to support the demand of domain and internet services.

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Symantec Buys Data Backup Firm Clearwell Systems, Partners with Security Firm SMX

By Nicole Henderson,July 11, 2011

Clearwell Systems is now part of Symantec

(WEB HOST INDUSTRY REVIEW) -- Security firm Symantec (http://www.symantec.com/) made two announcements on Monday, including the completion of an acquisition of data backup and archiving firm Clearwell Systems (http://www.clearwellsystems.com/) and a partnership with cloud-based email security firm SMX Limited (http://www.smxemail.com/).
According to the press release, Clearwell's archiving, backup and eDiscovery solutions provide customers with cost-savings and reduce risks while providing litigation, investigations and regulatory compliance.

Symantec says this acquisition will provide future product integration opportunities with Symantec backup and security. Last year, Symantec acquired VeriSign's security business.

“With this acquisition, we will help customers reduce costs across all phases of information management for litigation, investigations and regulatory compliance,” Deepak Mohan, senior vice president, Information Management Group, Symantec said in a statement.  “By adding Clearwell’s market leading eDiscovery solution to Symantec’s information management portfolio, we further increase Symantec’s ability to get the right information, to the right people, at the right time.”

The amount of the acquisition was not disclosed by the companies.

Symantec's partnership with SMX will integrate Symantec's Brightmail software into the SMX anti-spam and anti-virus cloud-based solution, according to a separate press release.

SMX anti-spam and anti-virus solution is designed for large international systems integration vendors and ISPs.

Jess Ball, SMX co-founder and CEO, says the partnerrship is an opportunity to deliver a world class cloud-based email security service that is deployed on a customer's own infrastructure.

"The demand for partners to offer cloud-based services is growing at a rapid pace. Symantec is focused on providing its partners with superior value, market leading technologies and sustainable revenue opportunities to help meet this demand," David Dzienciol, vice president, SMB and Channels, Asia Pacific and Japan, Symantec said in a statement. "The SMX partnership demonstrates how partners can leverage Symantec's technology to deliver innovative new cloud-based services offered by international system integrators and ISPs."

Launched in 2006, SMX is growing rapidly in emerging markets including India and Southeast Asia, according to the press release.

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Oracle Acquires Storage Firm Pillar Data Systems

By Justin Lee,June 29, 2011

A screenshot of Pillar Data Systems' website

(WEB HOST INDUSTRY REVIEW) --  Oracle (http://www.oracle.com/) announced on Wednesday it will acquire storage solutions provider Pillar Data Systems (http://www.pillardata.com/). The financial terms of the acquisition were not disclosed.

Expected to close in July, the acquisition will help Oracle deliver a complete line of storage products that runs the company's software faster and more efficiently.

Based in San Jose, Pillar Data Systems is a privately-held company that serves nearly 600 customers across 24 countries.

The company's storage technology is particularly well-suited for hosting providers, as it provides highly scalable SAN Block I/O storage systems that offer high performance scaling characteristics.

As a result, the company has taken a proactive role in promoting the storage system to the hosting industry. One of these ways is by sponsoring the upcoming WHIR Event in Montreal, held at Koko Restaurant + Bar.
Oracle president Mark Hurd and executive vice president of systems John Fowler will provide an Oracle Storage strategy update on Thursday.

Those individuals who are interested in learning more about how Oracle is redefining storage can register for the live event and webcast here.

"The acquisition of Pillar Data Systems provides Oracle with a compelling SAN storage architecture that complements our core strengths," said Fowler. "Customers can optimize the value of their Oracle applications, database, middleware and operating system software by running on Oracle's storage solutions."

Pillar Data Systems is majority owned by Oracle CEO Larry Ellison. The evaluation and negotiation of the deal was led by an independent committee of Oracle's board of directors.

The acquisition is structured as a 100 percent earn-out with no up-front payment. Oracle does not expect that the amount of the earn-out or its potential impact will impact Oracle's results of operations or financial position.

Earlier this year, Oracle launched its Oracle Cloud File System to enable storage pooling through an elastic storage cloud.

http://www.thewhir.com/web-hosting-news/020711_Oracle_Launches_Cloud_File_System_for_Private_Clouds

 
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Web Host Go Daddy Gets Investment from KKR, Silver Lake

By Liam Eagle,July 01, 2011

Go Daddy's marketing prominently features "Go Daddy Girls," including racecar driver Danica Patrick

(WEB HOST INDUSTRY REVIEW) -- Coming shortly after rumors the company was about to be sold, web hosting provider Go Daddy (http://www.godaddy.com/) announced late on Friday, in a statement posted to its website, that it had “signed a definitive agreement to receive a strategic investment and enter into a partnership with KKR, Silver Lake and Technology Crossover Ventures.”

Details of the investment were not disclosed, however rumors published last week by Bloomberg, the Wall Street Journal and others, which called the deal an acquisition, and identified KKR and Silver Lake as buyers, put the price tag for the company between $2 billion and $2.5 billion.
A Friday report by Reuters also referred to Go Daddy being “bought,” for $2.25 billion, including debt.

"I've always said we would make a move like this when the right deal with the right partners could help us do the right thing for our customers and our employees," said Go Daddy CEO and Founder Bob Parsons, quoted in the announcement. "This is it! We are partnering with KKR, Silver Lake and TCV because of their technology expertise, their understanding of web based businesses and because their values align with ours. We believe, together, we will take the company to the next level, especially when it comes to accelerating international growth."

Founded in 1996 by the outspoken Parsons, Go Daddy rose to the top of the domain registration and shared hosting markets over the last decade through price competition and some shrewd marketing, that included several controversial Super Bowl ads that drove a tremendous amount of attention to the company.

In 2006, Go Daddy filed the initial papers for an IPO, but later withdrew its filing due to poor market conditions.

Go Daddy was rumored to be for sale in September of 2010, following a news story appearing in the Wall Street Journal. The details were more vague at the time, but the valuation was in the range of $1 billion.

If the rumors are true, including the suggestion that Go Daddy passed on the September 2010 deal to wait for a better valuation, the plan appears to have paid off.

The speculation that followed the sale rumor during the past week has included optimism around the fact that Go Daddy serves the small business market, which is booming in the US, along with concerns that the company trades in such low-margin commodities as shared hosting, domain names and SSL certificates.

In late June, it was reported that Go Daddy was planning the launch of a cloud computing service, called Data Center on Demand, sometime in July. The building of a cloud computing offering (a hot commodity in the investment community) may have been a step on the road to Go Daddy completing Friday’s investment, or in securing a more desirable valuation.

"In Go Daddy, we are pleased to be partnering with a high-growth market leader and an outstanding team," said Herald Chen, head of KKR's software and Internet effort, also quoted in the announcement. "Building on Go Daddy's exceptional customer service and loyal customer base, we believe there is significant opportunity to expand the current portfolio of products and services as well as accelerate growth internationally."

 
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Web Host Netregistry Acquires Distressed Host Distribute.IT, Works to Get Customers Back Online

By Justin Lee, June 23, 2011

A screenshot of Netregistry's blog

(WEB HOST INDUSTRY REVIEW) -- Web hosting provider The Netregistry Group (http://www.netregistry.com/) announced on Thursday it has acquired the customers and assets of Australian web hosting provider Distribute.IT (http://www.distribute.it.com.au/) as well as its subsidiary Click n Go (http://www.clickngo.com.au/). The financial terms of the deal were not disclosed.

The acquisition comes nearly two weeks after hacker group Evil attacked the Australian Web host, taking the 4,800 domains and accounts of its customers offline.

In a press release, Netregistry said it will be assisting with resources and solutions to all Distribute.IT customers affected by the hacking.

Netregistry said that it emphasizes with Distribute.IT's situation, and says it is fortunate to be "in a position to offer a stable cloud infrastructure solution to the thousands of customers whose business and livelihoods have been affected."

"We all have a great deal of sympathy and concern for the consequences to Distribute.IT staff, management and customers of this unfortunate incident," said Larry Bloch, CEO of the Netregistry Group. "It is important to us that all Distribute.IT customers know the extent of effort to which Distribute IT have gone to rectify the damage. Distribute.IT had a very solid reputation – that comes from doing a good job for a long time. Without that, I've no doubt that this situation would be a lot worse. I want to remind customers of that excellence and ask for their patience and support as we work through the requirements to return services to all customers as rapidly as possible."

This arrangement is supported by .au Domain Administration, the .au manager, which has been working closely with Distribute IT management and Netregistry to ensure a satisfactory outcome for affected customers.

All of Distribute.IT's customers will be given the option of moving their services over to the Netregistry Group, where hosting customers will be placed in the company's secure cloud clustered, load-balanced infrastructure.

The cloud system is housed at the Global Switch data center, which is considered the largest data center in the Southern hemisphere.

Bloch said the company "will honour all payments for hosting at Distribute.IT," but while it is assessing billing and payment history it will be giving Distribute.IT customers a free hosting service "as soon as humanly possible" so they can upload their site and get their email addresses working.
As for its customers of colocation, website and email hosting services, Distribute.IT recommended that they move these services to Micron21 for continuity. Micron21 said that it may hire some of Distribute.IT's staff.

Meanwhile, .AU Domain Administration confirmed that Distribute.IT had told the organisation that the hackers were targeting its hosting services, and not its domain services.

Additionally, the company also confirmed it does not store any credit card information in its databases or logs, and so its customers' financial information was never compromised during the attack.

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Web Host Go Daddy Rumored to Sell for $2 Billion

By Nicole Henderson, June 24, 2011
A photo of Go Daddy founder Bob Parsons on a recent visit to Haiti

(WEB HOST INDUSTRY REVIEW) -- Web hosting provider and domain registrar Go Daddy (http://www.godaddy.com/) is close to being acquired by private equity firms KKR & Co (http://www.kkr.com/) and Silver Lake Partners (http://www.silverlake.com/) for between $2 billion and $2.5 billion, according to several reports on Friday.

At this point, the deal has not been confirmed by either party. Reports on the Wall Street Journal and Reuters say a source close to the matter has said the deal could close as early as next week.

Go Daddy initially shopped around for buyers in September 2010, but Bloomberg says the company was looking for a higher evaluation. In September the number sat around $1 billion.

Bloomberg says that the company is an attractive buy because its primary customer base is small businesses, a market that has seen tremendous growth in the past few years.

Go Daddy is arguably the most well-known Web hosting company outside of the industry, as its wide-reaching  marketing campaigns anchored by flashy Superbowl commercials and spokeswomen including racecar driver Danica Patrick and personal trainer Jillian Michaels of Biggest Loser fame.
Recently, reports surfaced that say Go Daddy is set to launch its cloud computing service in July. This move could increase its customer base even more as consumers look for ways to implement cloud infrastructures for their small businesses.

If this deal went through, it would be the largest acquisition of a Web hosting provider.

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Web Host iWeb Completes Privatization Deal

By Nicole Henderson,June 17, 2011
A map shows the locations of iWeb's data centers

(WEB HOST INDUSTRY REVIEW) -- Canadian web hosting provider iWeb Group (http://www.iweb.com/) announced on Thursday that it has completed the privatization of its company.

iWeb announced that its amalgamation under a merger agreement was completed and its common shares were delisted from the TSX.

iWeb entered into the merger agreement with private equity and venture capital firm Novacap at the beginning of May.

The WHIR talked to iWeb chief financial officer Philip Tousignant last month about its proposed privatization deal.

According to the press release, each shareholder received one redeemable share for a cash consideration of $1.50.

The company will continue operation under the iWeb name.

iWeb was recently named to PROFIT's annual list of the 100 fastest growing companies in Canada. iWeb was named the 52nd fastest growing company, its fourth consecutive year on the list.

 
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eBay Acquires Open Source E-commerce Platform Magento

By Nicole Henderson, June 06, 2011

A screenshot from a YouTube video of Magento co-founders Roy Rubin and Yoav Kutner

(WEB HOST INDUSTRY REVIEW) --  Open source e-commerce platform Magento (http://www.magentocommerce.com/) announced on Monday that it has been acquired by eBay (http://www.ebay.com/), according to a blog post. The amount of the acquisition was not disclosed.

Magento is the base for several Web hosting providers e-commerce packages. Recently managed hosting provider Coeus Blue joined AWS Solution Provider Program to offer services through its Magento hosting environment. More recently Nexcess expanded its Magento e-commerce hosting line in the UK.

Magento says it believes this move will open opportunities for the entire Magento ecosystem, including becoming a part of an open commerce platform being developed by eBay.

"eBay is evolving to become a strategic commerce partner focused on delivering new ways for merchants of all sizes to drive innovation," Magento writes in its blog post. "As a centerpiece of this strategy, they are building a global, open commerce platform that leverages the worldwide developer community. And Magento will be at the core of this new, open commerce platform, called 'X.Commerce.'"

In March 2010, eBay became Magento's first outside investor, according to the post. "[eBay] have experienced the passion of the Magento ecosystem, and they are eager to harness the power of this ecosystem to create the next generation of eCommerce innovation," Magento says.

After the acquisition closes, Magento says it will continue to operate out of Los Angeles and "continue building our team and enhancing our product line, including the Magento Community, Enterprise, and Mobile Editions, as well as Magento Go and the Magento Go Platform. And we'll continue strengthening our training, education, packaged consulting services and support efforts around the world."

“Technology-driven innovation is blurring the lines between online and offline commerce, changing the way consumers shop, and enabling retailers of all sizes to benefit from the latest innovations from the developer community,” John Donahoe, president and chief executive officer, eBay Inc. said in a statement. “The feedback we’ve heard from external developers has been clear — they don't just want payments or an e-commerce site; they want access to a full set of commerce capabilities to build complete shopping experiences for merchants. We believe the acquisition of Magento and creation of our X.Commerce group will enable us to meet developers’ needs and drive global commerce innovation for retailers and consumers.”

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Google's Strategy for 111 8th Avenue Space Could Leave Web Hosts Looking Elsewhere

By Justin Lee, June 06, 2011

An image of the 111 8th Ave building in Manhattan

(WEB HOST INDUSTRY REVIEW) -- Just a few months after Google (www.google.com) acquired Manhattan's 111 8th Avenue data center carrier building, it appears as though the company is looking to significantly expand on its office space within the building, according to a report by Data Center Knowledge.

In December, the company acquired the massive Internet hub, which spans 2.9 million square feet and is estimated to be worth $1.9 billion.

Originally the headquarters of the Port Authority of New York and New Jersey, the building was sold to Google by a group comprised of real estate investment company Jamestown, Taconic Investment Partners and New York State Common Retirement Fund.

At the time of the acquisition, Google said the deal was fueled by its rapidly growing workforce and not taking control of an important carrier building.

There might handle its role as landlord of one of Manhattan’s primary Internet connectivity hubs, and what it might mean to the telecom carriers and data center operators who are tenants in the building.

Last month, Google took the building's remaining space off the market, leading many to speculate that the company is holding onto the space for its own operations.

Google currently occupies about 500,000 square feet of the building's space, with the remaining 1.4 million square feet leased by telecommunications and hosting companies.

These include data center giants like Digital Realty Trust, Equinix, Telx and Internap. It is still unclear whether these existing tenants will be allowed to renew their leases when they end.

If Google takes up the entire building space for its own operations, it could leave hosting companies looking elsewhere for their data center needs in what is considered one of the busiest markets in the country.

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