Parent of 1&1 Internet Buys UK's Fasthosts

Germany's United Internet, the parent company of 1&1 Internet, has acquired leading UK hosting provider Fasthosts for 61.5 million pounds ($114.7 million US). The all-cash deal is the latest in a flurry of major deals in the hosting industry, and continues a trend of consolidation among European hosts.

1&1 expanded into the British hosting market in 2003, and had 280,000 UK customers at the end of 2005. The acquisition of Fasthosts, which was already the top United Kingdom host with 299K active sites, gives the combined company a dominant position in the UK market.

1&1 is already the world's largest hosting company as measured by active sites, and will extend that advantage with the acquisition. The addition of the Fasthosts' customers also brings 1&1 nearly dead even with Go Daddy for bragging rights for the most hostnames. 1&1 Internet houses 5.52 million hostnames this month, compared to 6.06M for Go Daddy. The two providers will likely be in a virtual dead heat once the Fasthosts deal closes, which is scheduled to happen before the end of this month.

The acquisition is the industry's third major deal in a week involving one of the world's largest hosting providers:

United Internet provides web services through 1&1 Internet, domain registrar Schlund + Partners, web portal operators and GMX and domain auction house Sedo. The acquisition also gives 1&1 a much larger presence on the Windows hosting platform. 1&1 hosts more than 90 percent of its sites on Linux, while Fasthosts is one of the hosting industry's largest users of Windows web servers.