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

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

“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,
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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