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Defination of web hosting companies review

It used to be relatively easy: 486 was better than 386 which was better than 286... but there are no numbers any more. Only cryptic names and multiple variations. If you're not a CPU geek, you're doomed...

Why the Rackspace IPO is Good for Hosting

Mon, 28 Apr 2008 16:28:00 -0500
As reported here at The WHIR and around the Internet, Rackspace has filed the preliminary paperwork with the United States Securities and Exchange Commission to issue an Initial Public Offer of stock (IPO). The complete S-1 documents can be found here and make pretty interesting reading for anyone who has a business involving web servers or large scale hosting.

Assuming that the IPO is issued, and that Rackspace becomes a New York Stock Exchange traded stock - this is great news for the web hosting industry. Here are the main reasons why:

An IPO at this time indicates that this sector is growing like crazy despite the specter of a U.S. recession - While there has been a pull back in a number of high visibility stock market sectors (think: housing markets, mortgages, banking, consumer durables) there is actually an acceleration in web hosting going on. This is driven by the growing acceptance of the web as the place for any and all data and applications. We are witnessing the transference of data from the desktop to the 'cloud'. Rackspace is riding the crest of this wave and pointing the way for the entire hosting industry.

Rackspace is an almost pure play web hosting company - Anyone, either within the web hosting industry or outside, can now have much greater visibility into the specific metrics that make web hosting a great business. Many investors are reluctant to invest in a sector or industry which is complex or laden with technical jargon. Rackspace will educate the market on many of the terms and realities that accompany web hosting operations. This will benefit other web hosting companies seeking investment in the future.

A successful IPO will create demand among investors for similar companies - Once Rackspace reveals the money to be made in web hosting, the larger investment community will seek out web hosting investments. This will mean more money available for web hosting companies in every niche of hosting. In essence, the business model will be vetted and the mechanisms for profit better understood.

The publicity surrounding the IPO will generate buzz for 'web hosting' - Just by submitting the S-1 documents, Rackspace has already created a substantial buzz around the investment and Internet communities related to web hosting. As of this morning, there are over 111 references to Rackspace on Google news. Over 35 of those posted in the past few hours, and all related to the IPO. Web hosting buzz and publicity enriches all those in this industry.

I wish everyone over a Rackspace the very best of luck with this exciting new venture, and on behalf of the entire web hosting industry I offer a heart-felt, ''Thank You''.

This content provided by HostMySite.com.

There is no denying that the Google Adsense affiliate program is one of the easiest programs to make money from. It just has to be the very first program that any new website signs ups for. One of the reasons is because unlike most other affiliate programs, one does not need to register a sale to make money.

Tucows - Has a deferred problem

Tue, 12 Feb 2008 11:49:00 -0400

Tucows (AMEX:TCX) has lost 50% of its market value since July 2007. Yes it has dropped from $1.26 to $0.63 a share, a 50% drop over the last six months.

The Company just released it’s year end financial statement, so now is a good time for a quick review of the basics:

- Annual revenues were $74.6 M vs. $65 M for the previous year – up 14%, nothing wrong there.
- Net Income $2.6 M vs. $2.1 M – up 24% -- direction is good.
- EBITDA $8.7 M vs. $5.8 M – up 50% -- something to write home about.

Tucows has a market cap of $46.5 million. The overall value could be stated as:

- 5.3X EBITDA
- .62X trailing revenues.
- PE Ratio 18.68

So why is Tucows trading so low? Why has it dropped a whopping 50%? As a high tech firm it deserves at least a 40 P/E ratio. It should be trading at a 1X revenue range, frankly more. That would take it back the July stock price.

The problem is the Tucows balance sheet. The Company has $80 million in liabilities. How is Tucows going to make it? Given current EBITDA one could take almost 10 years to pay it back, not including interest. The game is over; tank the deal, time to trade out.

WRONG WRONG WRONG ---- Tucows needs more liabilities, I think liabilities should go through the roof. They should be the master of liabilities; the street just doesn’t get it.

Financially speaking there are not many firms like Tucows. They sell millions of little things, sort of like Coca Cola. However those little things are domain names, selling for lets say $12. Since they are paid “up front” for a specific period, usually one year, the revenues for these are recognized at $1 per month, not the $12 when the transaction occurred. Sort of like cash vs. accrual accounting.

The bulk of the liabilities time out in one year, when hopefully, they start all over again. Look at it as millions of itsy bitsy revolving loans.

Of the $80 million in liabilities, $50 million (63%) is tied to deferred revenues resulting from domain registration sales. Domain name registrations account for 73% of revenues.

Usually I hate deferred revenues (which is a topic for a separate writing). However for Tucows it is the business model.

I might be naive, but I don't think many people drive up to Tucows and say..."I stopped using my domain name...I want my $3 back". I have a hard time rationalizing how GAAP, in the practical world, should apply here.

Tucows – Has a deferred problem. One the street does not understand, and one I think is holding the stock price down.

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.eu domains can be registered now

Wed, 12 Apr 2006 06:32:16 EST
The .eu domain registry got a slow start but the European Unions
collective top level domain, .eu is now available for public
registration. But the registration process appears to be so flawed
that some domain squatting registrars have been able to secure an
unfair amount of the high value domains.

Read More

San Francisco, California - (The Hosting News) - April 25, 2008 - Owner and manager of corporate datacenters and Internet gateways, Digital Realty Trust, Inc., has issued a new research study indicating that green movement will grow in importance for datacentre providers.

Information on your most popular pages should lead you to quickly creating more pages based on the popular topics and content contained in those pages that your prospects love most. The next thing to do is to link to your new pages from your older popular pages. This single step will translate to your visitors spending more time on your site. Research has proved beyond any doubt that the longer your prospects spend on your site, the more profitable they will end up being to you.

Arriving to conclusions can be considered the most difficult part of any form of writing. We felt the same here with this article on web hosting companies review. Hope you enjoyed it.
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