AT&T Corp. exited the small-business Web hosting segment Friday, selling its customers and servers to private Web hosting provider, Interland Inc. AT&T officials said the company made the move to concentrate on larger rivals like WorldCom Inc., IBM, and Cable & Wireless plc.
Officials from both AT&T, of Basking Ridge, N.J., and Interland, of Atlanta, would not say how many customers are affected by the deal, or the exact sale price (a press release said the deal was for between $4 million and $12 million).
The AT&T unit was "absolutely profitable" and was only sold to let the company focus on enterprise customers, spokeswoman Brenda Crawford said.
For Interland, which also acquired customers, "it was a good deal," said Fabrice Klein, vice president of strategy. "Theyre more of the same. Its going to be very similar in terms of features and pricing."
Its not the first time Interland has acquired customers. The company did so when it merged with HostPro Inc., in spring 2001, and again when it bought Interliant Inc.s small-business customers earlier this year.
Still, Klein acknowledges that many customers may have chosen AT&T solely for the brand name. But all customers were notified, and "were really going to handhold them" through the roughly 90-day conversion process, he said. Also, AT&T approached Interland first, he said.
Interland, which before the deal had about 300,000 customers, now stands to be profitable by August, Klein said. More expansion may be in the works, but not to other markets – Interland learned from the mistakes of other hosters that tried to do too much, he added.
The company is currently consolidating from four data centers to three, in Atlanta, Los Angeles, and Seattle, he noted.