MarchFirst To Host Fire Sale?

Web-services firm's hosting business is on the block.

Plagued by a series of financial missteps, MarchFirst is in talks with Exodus Communications about the possible sale of its hosting operations, sources say.

The Web services firm seeks to sell off either chunks or the whole hosting operation to Exodus or another buyer, says a source close to the company.

Talks of the possible sale come on the heels of MarchFirsts recent restructuring, which includes layoffs of 1,500 employees and the closing and consolidating of some of its 70 offices in 14 countries.

Also, the company says it will sell pieces of its business that are not core to its operations. That likely could mean a large chunk of the business units that USWeb/CKS brought to the merger.

MarchFirst currently runs its U.S. data centers in Sunnyvale, Calif., and Herndon, Va. The company also operates an application monitoring and management center, called Host-One, in McLean, Va.

The hosting and management business was a move to attract longer-term contracts and build a stream of recurring revenue.

Last spring, before its problems erupted, MarchFirst CEO Robert Bernard predicted that the companys effort in managing hosted applications would become a $100 million business in 2001.

MarchFirst executives declined to comment.