Verio May Entertain Buyout

The chief of Verio Inc., a large commercial Web hosting and Internet provider, admitted Thursday that the company has explored selling itself, but for now plans to keep up its acquisition streak.

Justin L. Jaschke, Verio’s chief executive officer, said in Thursday’s Wall Street Journal
that the sale of the company is one of many different strategies the
company has considered in an effort to boost earnings and break even within
the next few quarters.

For now, the company will focus on building its brand, integrating its 50
ISPs in the U.S. and continue to eye takeover targets. As of January,
Verio’s buying bonanza helped its hosting service reach 160,000 Web
sites. On Jan. 4, the company bought Internet Access Group, Inc., a
regional ISP based in Cleveland, for $15.1 million.

“The IAG acquisition significantly augments Verio’s increasing presence in
the Midwest region
and brings us another step closer to serving the top 50 U.S. markets,” Jaschke said.

“This acquisition and the Hiway Technologies merger we plan to close
shortly gives Verio a
tremendous boost toward becoming the world’s leading provider of Internet
services for small
and midsize businesses.”

On Jan. 9, Verio purchased Utah-based Internet Servers Inc. or iServer.

So far Verio has scored its biggest deal with America Online.. On March 4, AOL named Verio its exclusive business Web-hosting provider on AOL, CompuServe, AOL.com
and AOL’s
Digital City. Verio will pay AOL at least
$42.5 million over two years and share an unspecified percentage of the revenues. Verio was also tapped to host 7,000 AOL
PrimeHost and CompuServe BusinessWeb hosting customers.

The company said that among AOL’s and CompuServe’s combined 18 million
members, more than 3 million
represented Verio’s target market of small and medium-sized businesses.

Verio said it is integrating customer support and billing and network
operations. The company is also teaming up with the bigger networks such as
MCI Worldcom and AT&T, aiming to end its reliance on third-party concerns
for backbone access. An estimated 40 percent of costs will be saved through
the measure.

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