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Verio Swallows digitalNATION

One of the world's largest Web hosting companies has added another lucrative acquisition to their corporate stockpile.

Verio Inc. Tuesday acquired privately-held digitalNATION Inc. for $100 million in cash.

The deal adds digitalNATION's 1,200 dedicated servers to Verio's global inventory of more than 260,000 Web sites. digitalNATION's international client list includes The Discovery Channel, Hamilton Beach-Procter Silex and Atlantic Coast Airlines.

Based on its reported revenues for the three months ending in May, digitalNATION has projected annualized revenues of $9.4 million. Verio plans to market the digitalNATION services through its internal sales channels and will continue to maintain digitalNATION's branded Web hosting site.

Founded in 1990, digitalNATION was a pioneer of dedicated web hosting services. Because digitalNATION offered dedicated server solutions based on UNIX, Windows NT, Linux and Cobalt operating systems, Verio said the deal significantly enhances its hosting service line-up.

Justin L. Jaschke, Verio chief executive officer, said the result of adding digitalNATION's services to Verio broadens their ability to meet diverse e-business needs.

"The addition of digitalNATION's leading dedicated server technologies and managed application services further strengthens Verio's ability to provide the full range of bundled broadband access and Web hosting solutions to growing businesses."

Bruce Waldack, digitalNATION president and chief executive officer said the company was attracted to growing through Verio's worldwide distribution channels.

"The combination of our respective hosting services and applications, with Verio's unmatched global distribution, Tier One national network, broadband access services and e-business focus will enable us to more effectively serve a broader global marketplace," he said.

According to Forrester Research, Inc., the dedicated server hosting market is one of the fastest-growing segments of the Internet industry, with projected growth from $152 million in 1998 to $5.3 billion in 2003.

Jaschke said that flourishing e-commerce businesses are producing the growth in the dedicated hosting market.

"As companies move more of their business processes and operations onto the Internet, we are seeing exploding demand for outsourced, high-end Web sites as transactional platforms for e-commerce and e-business applications."

Verio delivers locally based sales and engineering support in 41 of the top 50 U.S. markets under the Verio brand name and currently provides Web hosting services to customers in more than 170 countries.



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