Mergers and acqusitions in the web hosting industry accelerated in the first half of 2006, as investment capital flowed into the sector, which just a few years ago was scorned by Wall Street. While most of the deals have featured private investors, the public may get the chance to get in on the action in coming months, as Go Daddy and Hostopia are planning initial public offerings.

The improved environment for hosting M&A was the focus of several panel discussions at last week's HostingCon 2006. "The acquisition market is heating up," said Hillary Stiff of Cheval Capital, an Alexandria, Va. investment banking firm that specializes in the hosting sector. "We're getting more buyers into the market. It's harder to get organic growth, so people are looking to buy companies. There are also a lot more companies looking to sell."

"We're seeing increased M&A activity," agreed Paul Stapleton of DH Capital LLC, a New York investment firm active in the ISP and hosting markets. "More people will be buying hosters. Debt is returning to the market, more private equity is returning to the market, and there are more and more exit strategies for capital in this sector. The capital markets are open for hosters."

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The power outage that knocked MySpace offline was the second major failure in the past year at the telecom building in Los Angeles where MySpace houses much of its operations. The downtime at the Garland Building (1200 W. 7th) left MySpace users wondering how one of the web's busiest sites could go dark so easily. Adding to the headscratching was the fact that MySpace is a customer of Limelight Networks, a content delivery network that should (in theory) provide distributed caching and storage.

Other tenants at the Garland Building that were affected included DreamHost, which reported on the weekend power outages on its company blogs. The building lost grid power during a series of rolling blackouts that affected the Los Angeles area as California coped with stifling heat and record demand for electricity. The loss of power at Garland was blamed on the failure of a UPS system (uninterruptible power supply), which normally maintains power to equipment while generators start up.

Equinix said that reports that the outage may have occurred in one of its data centers were incorrect. "Equinix’s data centers were operating as normal over the weekend and this morning, providing consistent power to all customers," Margie Backaus, chief business officer of Equinix, reported in the comments section at GigaOm. "MySpace operates in Equinix data centers, but it also hosts operations in other data centers where we understand the incident occurred." MySpace recently announced that it would lease space in the new Equinix center in El Segundo.

EURid has suspended 74,000 .eu domain names and sued 400 registrars for breach of contract, citing "abusive behavior from a syndicate of registrars who have systematically acquired domain names with the obvious intent of selling them."

“In this case we are convinced that the domain name holders of the 74 000 .eu names (Ovidio Ltd, Fausto Ltd and Gabino Ltd) are acting as a front for a number of registrars," said Herman Sobrie, Legal Manager of EURid. "The domain name holders and the registrars can be regarded as one and the same. Since registrars should only register domain names for existing customers and not 'warehouse' the names in order to resell them at a higher price, this is clearly in breach of the registrar contract."

Social networking site MySpace.com is offline currently, attributing the downtime to a power outage in its data center. It was inaccessible for more than 90 minutes, and then displayed a brief message alerting users to the problems: "Hey everyone! There's been a power outage in our data center. we're in the process of fixing it right now, so sit tight. - Tom" (presumably MySpace co-founder Tom Anderson).

With MySpace unavailable, many of the service's users began posting blog items at LiveJournal, another free blogging service popular with U.S. teenagers.

A dynamically updating chart of the web site performance of myspace.com is available. Netcraft offers a web site performance monitoring service that provides detailed uptime charts, along with e-mail alerts when an outage occurs.

Do you need 100 gigabytes of disk space to house your web site? How about 150 gigs? Even if you'll never need that much space, hosting providers are offering it in the hope that super-sized specs will win new customers.

Hostway's "Superpowered Web Hosting" promotion is offering plans featuring 150 gigs of disk space, 1,500 gigs of data transfer and 3,000 email accounts for $9.95 per month. 1&1 Internet now offers 100 gigs of disk space and 1,000 gigs of transfer with its $9.95 a month business plan, while Go Daddy offers identical specs for $14.99 a month.

"There's obviously this arms race going on, with people offering absurd amounts of disk space and bandwidth," said Derek Vaughan. chief marketing officer of TechPad Agency.