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To: Redhook who wrote (19376)	8/11/1999 2:20:00 PM
From: AlienTech	Respond to of 43080

>>DOT just jumped up 7 in a matter of minutes << See rumor of greenie want to go sky diving. Also bage book out.. To: +Danny Chan (715 ) From: +Mark Iguchi Wednesday, Aug 11 1999 2:06PM ET Reply # of 716 Hi all...here's my synopsis on the conference call. Overall, I thought it was quite positive. It looks like they are in a strong position to grow significantly over the next couple years... Intro by Feld: Company history, December 1997 founding. To date 17 acquisitions, 60,000 customers. Bill Wilson CFO: Revenues 10.6 million, and was up 96 percent compared to first quarter. ProForma 10.9. Revenue Percentage 43% application hosting 32% web hosting 12% consulting Gross Margin 46% of revenues EBITA: -6.3 million. Description of the internet hosting market. Co-location. Exodus, Frontier.net, Above.net competitors. We feel that there will be pricing pressure in this area. Web hosting. Verio. This is a market that is going to grow strongly. We feel we are a leader in this area. Application hosting. New emerging area, where Interliant has a lot (5 years) of experience. Focusing on Lotus Notes, MS, Sun. Taking a look at the ERP space, but no action taken yet. Web hosting business grew 10% compared to q1. Web hosting customers increased 24% over q1. Web domains increased 22% over q1. Application hosting business flat compared to q1. Signed a $100,000/month contract. Expecting to see growth emerge over the next few quarters. Consulting declined due to diversion of resources due to aquisitions/mergers. Targeting acquisitions in all three service areas of the company. Eagerly looking to speak to press and analysts about the vision of the company. Strategic Partners: Asia online. Future holds announcements with IBM/Lotus. Out of 17 companies, 14 have been integrated into the HR system while 15 have been integrated into the finance system. 11 of the 15 web hosting companies have been integrated into the billing system. Q/A: DLJ: Have you opened the DC data center? Under construction, open within a couple of months. Within the existing data centers, we can support a revenue base of $300 million/annually. CIBC: Congrats on a great quarter. looking for a little more color on the acq pipeline...also wondering more about upcoming products? Strategic direction is to grow: web hosting, app hosting, and consulting. (Acquisitions) Much more focused now to target specific areas for growth. The cash and stock mix for acquisition will vary with each sellers... Gibbs (funny, they announce Blodgett, but he's not there) MERRILL: Historical growth rates for web hosting? Idea of Advanced web creations revenue? Revenues: Ad. web creations brings 1.8 million annualized. This one has been fully integrated into our operations. Historical growth rates: market is growing at 100% a year. Small companies are growing in the 40-60% rates. WHEAT ASSOCIATES(?): Comment on margins on the three seperate businesses? Overall margin, 44% for q2 App hosting, consulting about 50% Web hosting, about mid 30s%, due to significant investment in Atlanta data center. We should see the margins expand strongly. Over time we expect the margins to grow 50 to perhaps even over 60% margins. Over time, the app hosting will enjoy the highest margins, due to sticky customers and less likelihood of commoditization.