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A Proof Of A Success Story

Posted by The Daw On February - 28 - 2009

value-of-web-hosting-companiesThis is my first article for B10WH after the website has been completely redesigned. I feel a little bit sentimental when it comes to this website because I’ve created under name Best 10 Web Hosting in 2003. But this was only an introduction. My first post here is about a success story I’ve recently wrote in my Daw Web Hosting Blog. the Daw’s publication is titled “Unlimited” Mistakes In Web Hosting“. It is about 1&1, a web hosting company, which originally comes from Germany, that launched its U.S. operations in 2003.

In the beginning of February Cheval Capital, a small investment bank that specializes in mergers and acquisitions in web hosting industry published its valuation of of Public Hosting Companies. Take a look at Cheval Capital’s estimate of the relative valuations of some of the major hosting companies as of February 1, 2009.

Ranked number one per Revenue ($ millions)   and Value/Revenue* is United Internet with $2,081 billion and 1.3 x value/revs, followed by Savvis with $873 million and 1.1 x value/revs.

Rackspace is third with $553 million, and 1.3 x value/revs. Dada is fourth  with $229 million and 0.8 x value/revs.

Navisite ($159 million and 0.9 x value/revs), Web.Com ($122 million and 0.6 x value/revs), Peer 1 ($94 million and 1.2 x value/revs), (Group iWeb ($15 million and 2.0 x value/revs) are ranked between 5th and 8th place.

How Te Calculation Were Made?

Cheval Capital typically look at two enterprise value formulas for calculating the Enterprise Value and make adjustments from there if necessary.

Enterprise Value = (Fully Diluted Shares * Current Stock Price) plus Debt (long and short term, including capital leases) less any option exercise proceeds for unexercised, in-the-money, options included in Fully Diluted Shares.

Enterprise Value = (Fully Diluted Shares * Current Stock Price) less Current Assets plus Total Liabilities less any option exercise proceeds for unexercised, in-the-money, options included in Fully Diluted Shares.

The investment bankers say that the reason why they look at two formulas is because some companies have unusual balance sheet items (e.g. large cash balances, that can distort valuation etc.).

Cheval Capital Inc, uses a multiple of revenue to compare web hosting companies because they have very different capital and operating structures and compete in different niches of the web hosting industry. The investment bank takes all data from public financial statements for the quarter ended September 30, 2008.

Is There Are Place For Ethics and Principles In Web Hosting Industry?

Posted by hosttycoon On February - 26 - 2009

web-hosting-checkThe morality and fair play is a corner-stone of each business. Anyone who has been in business long enough can tell you than contracts does not worth even a dime without honesty. when we take a look at today’s web hosting industry however, we will see that it is all about money. It is all about making a few more bugs. Greed is one of the worst things in todays hosting market. It drives one of the most negative trends – “unlimited”! I though that there are a very few people who think this way. Of course I might be wrong, I don’t know actually how many are they, but here is one of them!

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Open Source Is Already A Political Force

Posted by hosttycoon On February - 26 - 2009

dana-blankenhorn“As I noted last month I have been amused, writing this blog over the years, to watch the political progress of open source”, wrote Dana Blankenhorn in ZDnet blogs. Se adds that when she first started at ZDnet “open source advocates were considered the fringe”. Dana also said something that’s sad but true – that people look at advocates like Richard Stallman and say  “hippie”. It is true that if you explain to someone who knows who Bill Gates is, that Mr. Linux –  Linus Torvalds – is not a billionaire, and this is only because he hadn’t intention to commercialize its intention they would be amazed and would find the idea of Open source ‘creepy”.

But as Dana says “as open source grew, it became a political cause for government”. He’s right. A few years ago two French politicians form the right-wing UMP inspired the French parliament to pass a bill that enforced the use of Open Office (a free Open Source alternative of expensive Microsoft Office program) in public institutions.

Almost at the same time, in 2006, the State of Massachusetts struggled to endorse the ODF file format. When it comes to Open SOurce, especially in United States politicians line up on both sides of each battle.

Read Dana Blankenhorn’s article “Open source becomes irresistible political force” to learn more about his cogerage on Open Source related political battles.