Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Exodus Communications, Inc. (EXDS) -- Ignore unavailable to you. Want to Upgrade?

To: Shaw who wrote (2342)	7/17/2000 3:18:33 PM
From: Sir Auric Goldfinger	Respond to of 3664

A Host Of Consolidation Options Emerge For Web Sector 7/17/0 13:56 (New York) By Peter Loftus NEW YORK (Dow Jones)--Consolidation in the Web-hosting sector is expected to continue, despite reports that merger discussions between Exodus Communications Inc. (EXDS) and a unit of Global Crossing Ltd. (GBLX) have stalled. Reports surfaced last week that Exodus was in talks to acquire Global Crossing's GlobalCenter Web-hosting unit for between $6 billion and $7 billion. But over the weekend, Global Crossing rejected Exodus's offer, according to the Los Angeles Times. Spurned by Global Crossing, Exodus is now pursuing the possible acquisition of another Web-hosting firm, Digex Inc. (DIGX), The Wall Street Journal reported Monday. Global Crossing, meanwhile, may proceed with plans to issue a tracking stock for GlobalCenter, the Journal reported. An Exodus spokeswoman declined to comment Monday on reports of talks with Global Crossing and Digex, citing company policy against comments on rumors. She did say: "At any point in time, we're usually looking at one or more acquisition opportunities. For the right asset at the right price, we will make acquisitions." Representatives for Digex and Global Crossing didn't return calls for comment. An official at Intermedia Communications Inc. (ICIX), which owns 62% of Digex, also couldn't be reached. No matter which outcomes are produced by the latest maneuverings, analysts expect Web-hosting mergers to continue throughout the year. The tone was set in January, when Nextlink Communications Inc. (NXLK), a telephone company, agreed to acquire Concentric Network Corp. in a deal then valued at $2.9 billion in stock. In May, Japan's Nippon Telegraph & Telephone Corp. (NTT) agreed to acquire the 90% of Web-hoster Verio Inc. (VRIO) it didn't already own for more than $5 billion in stock. The demand for Web-hosting services has boomed in the past year as companies of all stripes have looked for ways to take advantage of the Internet. Hosters operate large data centers full of high-end computers known as servers, which store the Web sites operated by their corporate customers. The Web-hosters also help deliver the contents of these Web sites across the Internet to end users. Pure-play Web-hosting firms have grown sharply in the last year. Exodus, for example, saw its revenue soar to $134.1 million in the quarter ended March 31 from $30.1 million a year earlier. In pursuing either GlobalCenter or Digex, as has been reported, Exodus is looking to expand its already dominant market share in Web-hosting. But consolidation in Web-hosting could also come from the outside. Web-hosting's fast growth has caught the attention of telecommunications carriers, who are looking for ways to augment what has become the slow-growth business of traditional voice traffic. Many firms have started in-house Web-hosting operations, but analysts expect them to continue to pursue acquisitions of pure-play Web-hosters. "I think most large telecommunications carriers out there realize that revenue from voice traffic won't grow more than the mid-single digits" on a percentage basis, said Joseph Eshoo, analyst with A.G. Edwards. Exodus itself could become an acquisition target, even if it continues to pursue potential purchases such as Digex, said Youssef Squali, analyst with ING Barings. In fact, Squali envisions the Web-hosting sector being swallowed whole by either telecommunications firms or computer equipment makers such as Intel Corp. (INTC) and International Business Machines Corp. (IBM), which have made early forays into Web-hosting. Other Web-hosting acquisition targets include Globix Inc. (GBIX), PSINet Inc. (PSIX), Interliant Inc. (INIT) and USInternetworking Inc. (USIX), analysts say. "I think this whole segment at one point will be folded into the larger telecom business," Squali said. Trading in Web-hosting stocks was mixed Monday afternoon. Exodus shares fell 3 to 52 1/4; Interliant fell 1/16 to 20 7/16 and Verio was off 1/16 at 54 7/16. USinternetworking jumped 2 to 20 15/16; Digex rose 8 3/4 to 87 9/16; PSINet was at 23, up 1 1/16 and Globix traded up 3/16 to 36 5/16.