Web.com (1995 – 2007)

Web Internet LLC (and later Web.com Inc.) were formed in 1997 as joint ventures between Robert Friedman and Bill Bloomfield, then President of Web Service Company. Mr. Friedman served as Web.com's first CEO. Web Service Company was the second largest coin-operated laundry machine company in the U.S. and held a trademark on the "WEB" brand, resulting in the company's ownership of the Web.com domain. Web.com initially launched as a web portal, offering paid search results, a shopping directory, comparison shopping engine, as well as a free web-based @web.com email service in multiple languages.[1] The Web.com website was first hosted at HostPro, Inc., serving as one of HostPro's premier clients. HostPro CEO Alex Kazerani would later be instrumental in negotiating the acquisition of Web.com as a board member of Interland, Inc.

Web.com
Subsidiary
IndustryWeb hosting
Design
e-commerce
Marketing
Founded1997 as Web Internet, LLC
Headquarters
Jacksonville, FL
,
USA
Key people
Jeff Stibel, President & CEO
Gonzalo Troncoso, President, Web Services
ProductsSite Builder, Hosting Suite
Revenue ~$53 Million US$ (annualized)
ParentWebsite Pros (NASDAQ: WSPI)
Websitewww.web.com

Interland, Inc. was founded by Waldemar Fernandez and Ken Gavranovic in 1997 out of Atlanta, Georgia. Mr. Fernandez the Chairman and largest shareholder resigned in 2000 shortly after Interland went public. Interland was one of the largest providers of websites and web services to small businesses and consumers, based in Atlanta, Georgia. MicronPC acquired HostPro in 1999, and then merged with Interland in 2001, maintaining the Interland brand and corporate name. Interland would acquire numerous additional hosting companies before acquiring Web.com in 2005 shortly after Jeff Stibel took over as CEO. Interland then changed its name to Web.com, maintaining services including do-it-yourself and professional website design, web hosting, e-commerce, web marketing, and e-mail. As of March 2007, there were approximately 166,000 paid hosting subscribers.[2]

Along with various web products and services, Web.com provided small businesses, entrepreneurs and consumers with advice and tips for developing a strong online presence.[3] It owned the brands Web.com, Interland, Trellix, and HostPro.

On September 30, 2007, Web.com merged with Website Pros, forming the new Web.com.[4]

History

The company traces its corporate roots to MicronPC, a multi-billion PC manufacturer. MicronPC entered the web services industry with the acquisition of HostPro in 1999. Two years later, they merged with Interland, Inc., a public company based in Atlanta, Georgia. The combined company retained the Interland name and sold the PC business to focus on Internet hosting. Interland's primary business was providing web services, such as shared and dedicated hosting. Interland acquired numerous hosting companies between the years 2001 and 2006, including Worldwide Internet Publishing Company, Innerhost, Dialtone, Interland, Burlee, Trellix, Communitech and WazooWeb. In August 2005, Interland's Board of Directors decided to bring in new management with the goal of turning around the company. It removed its former CEO, Joel Kocher, and replaced him with Jeff Stibel.[5] Over the next several months the company also brought in a new Chief Technology Officer, Vikas Rijsinghani (former founder and CTO of VerticalOne) and a new Chief Marketing Officer, Judy Hackett (former CMO of CareerBuilder).[6] The company acquired Web.com in December 2005 for $4.8 million and changed its name from Interland to Web.com.[7]

Web.com held 21 registered patents and claimed to have the primary underlying technology for various aspects of web hosting, software as a service, customer-facing control panels, and website builders.[8] Some of these patents were licensed to Hostopia, a wholesale web hosting provider.[9] On February 1, 2007, Netcraft named Web.com one of the most reliable hosting companies.[10]

When the company was known as Interland, the stock had risen to meteoric levels and then suffered with the "Dot-com bubble" and was ranked among the 10 worst performances for a United States listed company.[11] But since the company brought on new management and changed its name to Web.com, the stock price recovered. At the time of the merger with Website Pros, the company's stock closed at $7.15, which represented more than a threefold increase since new management joined in August 2005.[12] According to the company's financials, the last four quarters showed revenue and subscriber growth at Web.com, despite having consistently lost revenues and subscribers prior to the turnaround.[13][14][15] During the first quarter of 2007, the company announced a profit and earnings growth but the second quarter of 2007 the company reported a loss, mainly due to merger related costs.

The company had been involved with various lawsuits, some of these predate the web.com acquisition:

  • Novell brought an action against Interland in 1999 claiming underpayment of royalties. It made an out-of-court settlement in 2005.[16]
  • The company made a claim against an insurer in 2000. The amount was settled, and Web.com received $6 million.[17]
  • In June 2006, Web.com filed a lawsuit against Go Daddy, which alleges that Go Daddy's hosting and domain plans infringed on Web.com's patents.[18][19]
  • WebSource Media was acquired by the company on May 24, 2006[20] but by June 23, Web.com filed to rescind the acquisition when it learned that WebSource had engaged in "unfair and deceptive acts and business practices". Web.com was appointed to manage the business operations as an agent of the receiver when the court ordered that it be managed by a receiver.[21]

Website Pros

On June 26, 2007, Website Pros and Web.com announced that "the two companies have signed a definitive merger agreement". Website Pros, as the bigger of the two companies, acquired Web.com for a total of approximately ~$130 million, consisting of $25 million in cash and the rest in stock. Web.com representatives, including Jeff Stibel as the new President, will hold two of seven seats on Website Pro's Board.[22][23][24] The merger was completed on October1st, 2007.[4] Prior to the Web.com merger, Website Pros had acquired: 1ShoppingCart.com, LEADS.com, NetObjects, Renovation Experts.com, and Submitawebsite.

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References
  1. "New Free Service Available for Sending E-Mail In Languages in Addition to English. - Free Online Library". www.thefreelibrary.com. Retrieved 2017-11-17.
  2. "10Q filing for Q2, 2007". Securities & Exchanges Commission. 2007-06-30. Retrieved 2007-10-08.
  3. Dickler, Jessica (January 30, 2007). "10 Web tips for entrepreneurs". CNN.
  4. "Website Pros Completes Transaction With Web.com". Website Pros. Retrieved October 1, 2007.
  5. "Interland Names CEO, Kocher Steps Down". The WHIR. 2005-08-02. Retrieved 2007-02-05.
  6. "Ecommerce Service Provider Interland Appoints Two Chief Officers". AuctionBytes.com. 2005-12-07. Retrieved 2007-02-05.
  7. Comisky, Devin (2005-12-30). "Interland to Become Web.com". eCommerce Guide. Retrieved 2007-02-05.
  8. Taulli, Tom (2006-05-09). "Web.com's Extreme Makeover". Motley Fool. Retrieved 2007-02-05.
  9. "Web Hosting Provider Hostopia Licenses Web.com's Patents". HostSearch.com. 2006-07-19. Retrieved 2007-02-05.
  10. "New York Internet, Web.com and iWeb8 Most Reliable Hosting Companies In January 2007". Netcraft. 2006-02-01. Retrieved 2015-04-10.
  11. Hanson, Tim; Richards, Brian (2006-06-05). "The Market's 10 Worst Stocks". Motley Fool. Retrieved 2007-02-05.
  12. "Historical Stock Chart". Nasdaq.com. 2007-02-02. Retrieved 2007-08-01.
  13. "Interland Announces Sale of Dedicated Server Assets to Peer 1 Network". Web Hosting News. 2005-09-07. Retrieved 2007-02-05.
  14. "WWWW: Income Statement for WEB.COM INC". Yahoo! Finance. Retrieved July 24, 2007.
  15. "Web.com Reports Fourth Quarter and Fiscal 2006 Results". Yahoo! Finance. Archived from the original on March 29, 2007. Retrieved July 24, 2007.
  16. Martens, China (2005-07-11). "Novell not to release Q4 results until Dec. 1". LinuxWorld. Retrieved 2007-02-05.
  17. "Web.com (WWWW) Settles Lawsuit, Expects to Receive $6 Million". StreetInsider.com. 2006-01-18. Retrieved 2007-02-05.
  18. Mills, Elinor (2006-06-19). "Domain registrars in court". LinuxWorld. Archived from the original on 2012-07-17. Retrieved 2007-02-05.
  19. Barr, Jonathan (2006-06-21). "Go Daddy Gets Sued". TheStreet.com. Retrieved 2007-02-02.
  20. Fruchter, Yehuda (2006-05-24). "Web.com Acquires WebSource Media". SeekingAlpha. Retrieved 2006-05-24.
  21. "Web.com Rescinds Acquisition". Web Host Industry News. 2006-06-23. Retrieved 2007-05-22.
  22. "Website Pros and Web.com Sign Definitive Merger Agreement". Website Pros. Retrieved July 2, 2007.
  23. "Website Pros to Buy Web.com". AP. Archived from the original on July 1, 2007. Retrieved July 2, 2007.
  24. Munarriz, Rick Aristotle. "The Pros Take Over the Web.com". The Motley Fool. Retrieved July 2, 2007.
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