Shared hosting specialists IPOWER and Endurance International are merging in a deal designed to provide the combined company with the scale and resources to compete with Internet titans like Microsoft, Google, Yahoo and Go Daddy. The merger, which closed on May 4, will create a shared hosting company with 1.19 million hostnames and more than 580,000 active sites, according to Netcraft's Hosting Provider Switching Analysis.
While Endurance has made more than two dozen acquisitions of shared hosting companies, the deal with IPOWER is structured as a merger of equals, and both companies will continue to operate as unique entities with their own brands, according to Jean McCarthy, a spokesperson for Endurance. The deal allows the companies to benefit from their respective strengths, McCarthy said.
Endurance has grown primarily through acquisitions, and is known for its operational efficiency, particularly in migrating acquired hosting customers onto its technology platform. IPOWER, also known as iPowerWeb, is recognized for its marketing and customer acquisition capabilities, which have helped it achieve strong organic growth. "They're two very strong skillsets," McCarthy said.
In the past several years, free hosting plans from Google (Blogger) and Microsoft (Office Live) have gained millions of users, while domain registrars Go Daddy and eNom/Demand Media have seen explosive growth in their shared hosting operations. Small businesses, who are the largest target audience for most web hosting providers, have also made increasing use of services like MySpace, Facebook and LinkedIn to manage business communications. In announcing the merger, executives iof IPOWER and Endurance acknowledged that the playing field has changed in the shared hosting sector.
"While IPOWER and Endurance have each been successful on their own, it has been clear to both companies that continued success requires more scale and resources than either company could have alone," said Thomas Gorny, chief executive officer of IPOWER. "The ability of the merged companies to grow simultaneously through organic customer adds and acquisitions, along with new product offerings to our combined customer base, will make for an incredible force in the industry."
"IPOWER and Endurance are both known for innovation," said Steve Sydness, chief executive officer of Endurance International. "Together, we can lead the industry with best-in-class products and technologies that enable us to respond quickly to our dynamic industry—and address our customers’ growing expectations."
Gorny and Sydness will continue as CEOs of their respective entities, with no consolidation of executive positions, according to McCarthy, who said this approach will mean continuity for customers, who should see no disruption in service.
Endurance, which is based in Burlington Mass., has completed 28 acquisitions of shared hosting companies since 2000. While many hosting industry consolidators have combined acquired sites under a single brand, Endurance prefers to maintain its acquired hosting properties under separate brands. The company offers hosting through 15 different brands, but focuses most of its marketing efforts on seven established hosting services: BizLand, FatCow, Virtual Avenue, Hypermart, FreeYellow, PureHost and PowWeb.
Headquartered in Phoenix, IPOWER provides Web hosting and Web services for small- and medium-sized businesses. The company was founded in October 2001.
Posted by Rich Miller in Hosting
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