Web.com Bought by WebSite Pros

WebSite Pros has acquired Web.com for $129 million in a deal that reflects the growing importance of marketing services in the small business hosting market. WebSitePros is a publicly-held Jacksonville, Fla. company specializing in web design and Internet marketing, and will pay the equivalent of $6.52 a share for Web.com, which is the successor to hosting pioneer Interland.

Web.com has long been the focus of buyout rumors amid active consolidation in the U.S. web hosting industry, as mid-market players seek to scale up to compete with the huge platforms of Microsoft, Google, Yahoo and Go Daddy. The combined company will have more than $117 million in annual revenue and 234,000 paid customers, the companies said in a press release. Web.com currently hosts 318K hostnames, while WebSite Pros hosts a modest 43K sites. By comparison, Microsoft and Google each gained more than 500K hostnames during May.

The deal brings together two companies that have been working different niches in the small business market. WebSite Pros focuses on what it calls "Do-It-For-Me" web services solutions, while Web.com concentrates on do-it-yourself web services. WebSite Pros bundles site design, pay-per-click advertising and site traffic reports in plans that command between $79.95 and $99.95, reflecting the willingness of "newbies" to pay premium prices to trusted service providers. Web.com's plans are priced at between $11.95 and $59.95 per month.

There was no immediate indication of whether the company will operate as WebSite Pros or use the more familiar Web.com name.

David Brown will continue as Chairman and Chief Executive Officer of Website Pros, while Web.com CEO Jeff Stibel will become President of Website Pros and join the board of directors. Web.com representatives will hold two of seven seats on the combined company's board. The deal is subject to regulatory reviews and approval by the shareholders of both companies.

Interland’s legacy in the hosting business dates to 1999, when PC maker Micron Electronics purchased HostPro to enter the web hosting business. The company went on an acquisition spree, buying Interliant, CommuniTech.Net, Dialtone, Trellix and HostCentric. But Interland's share price languished as it struggled to consolidate its many properties, and in 2005 the company sold its dedicated hosting business, hired Stibel as president and rebranded as Web.com. While web.com has become associated with hosting, it initially was used on a web site for a laundromat.