That all depends upon what you consider the Web hosting leader. Exodus is the leading company in terms of puffery and marketing fluff, but in terms of actually doing business on the Internet via Web sites, Verio is by far the leader. Exodus hosts the Web sites of Yahoo, Lycos, GeoCities, etc. Exodus has 1,002 customers and the average annualized contract was $148,000, both as of Q199. Consider Verio, who's average monthly charge was something like $50 (annualized at about $600), and who just recently announced its 250,000 Web site last month. There is a world of difference.
Additionally, Ellen Hancock likes to make noise like Exodus will be a leading ASP (Applications Service Provider) over the next few quarters and years. IMHO, that will be very difficult to do when the company's basic business is Web hosting, collocation and performance monitoring tools to tell you how your Web site is performing. E-commerce? ERP? HR/Benefits? Exodus will give you a blank stare. They don't do it. But they will tell you how great their peering relationships are. Hardly the stuff of an ASP.
Verio is all about the small- and medium-sized business market doing business on the Internet. Practically anything that its market needs to make it easier and economical, and Verio can do it. They are much closer to the ASP model than Exodus will ever be. Now if we can only get that message through to the day traders and technical analysts, then we will be accomplishing something.
Don't be fooled, Exodus is great at marketing themselves. And while Exodus is on a roll (and their Web hosting business is great, and should remain so for some time), these two companies are as alike in that they are both Web hosting companies only. The similarity ends there. VErio's market and expertise, in my opinion, go far deeper. In conclusion, Verio's shares are the one for investors to marry, Exodus is one to date when you're looking for some "action." Beware, however, as sometimes waking up in the morning can leave one to feeling less than pleased with the choices made the night before. |
