Verio

Verio Inc.
Industry Web hosting
Founded 1996
Headquarters 8005 S Chester St. Suite 200
Centennial, CO 80112
Key people
 Hideyuki Yamasawa, President and Chief Executive Officer
Parent Nippon Telegraph and Telephone (NTT) Communications
Website http://www.verio.com

Verio is a global web hosting provider headquartered in the United States. Incorporated in 1996 in Denver, Colorado, it is a wholly owned subsidiary of Nippon Telegraph and Telephone (NTT) Communications, which acquired the company in 2000. Verio was formed from a consolidation of over 200 smaller Internet service providers (ISPs).[1]

History

Verio was founded by Justin Jaschke, with several of his senior management team from OneComm, as well as Darin Brannan and Venture Capitalist Mr. Steven C. Halstedt, in 1996 with a mission of becoming the largest ISP/Hosting company for the SMB/Mid Market business segment through a national infrastructure supported by local technical sales and servicing capabilities from acquired ISP/Hosting companies. Originally named World Net Access, Verio raised substantial funds ($1.1B) with which to purchase ISPs around the United States and Europe. It was funded by the principal founders, private investors, NTT, and institutional investors in a private placement. The concept was to roll up small ISPs into one large national ISP and achieve economies of scale.

On March 9, 1998 Verio's President Mark D. Johnson suffered a heart attack and died while on a business trip.

By the year 2000, Verio had purchased almost fifty small ISPs, most in the U.S. but some in Europe. During this time Verio went public on the NASDAQ, trading under the symbol VRIO. In early 2000 Verio was sold to NTT at a per-share price of $73, a total cost slightly exceeding $5 billion. Because NTT was a 53% Japanese government-owned company, foreigners were not allowed to own NTT stock, according to Japanese law at the time,[2] and therefore the buy-out was a 100% cash deal. The United States Congress held hearings over the transaction to ensure it did not violate national security concerns. The Justice Department and the Federal Bureau of Investigation expressed concern that the Japanese government, which owned 53 percent of NTT at the time, could gain access to classified information should the U.S. government use Verio's network to tap Internet communications during an investigation. To placate these concerns, NTT agreed to form a separate division within the company staffed only by U.S. citizens to handle any work in support of government investigations. As a result, the Committee on Foreign Investment in the United States recommended that President Clinton allow the $5.5 billion purchase to proceed. The deal also prompted scrutiny of Japan's openness to foreign telecom competitors.

Shortly after the announced deal, the NASDAQ stock market crashed in the spring of 2000 in the dot-com bubble burst. The agreed price of $73 remained and NTT and Verio completed the transaction by the fall of 2000.

Over the course of the next few years, Verio abandoned the lower revenue consumer internet access market and focused primarily on the more lucrative business-to-business web hosting market. Much of the original infrastructure and employees it had purchased were disbanded or consolidated into a few large centralized data centers.

Verio continues to operate as a wholly owned subsidiary of NTT Communications.

At the end of 2005, the backbone and some dedicated hosting centers moved to NTT America, with the web hosting business staying with Verio. At the same time, the European arm, Verio Europe, was moved in its entirety to NTT Europe. In October 2006, Verio Europe was renamed NTT Europe Online.

Some of the ISPs purchased by Verio

Verio was initially built on a business model known as a "rollup", composed entirely of smaller companies operating under the Verio brand name. By the year 2000, Verio had purchased almost 50 small ISPs,[3] most in the US but also in Europe, ranging in price from under US$1 million to over US$100 million per ISP. These companies were often mature and well-known brand names in their local markets — more well known than Verio — and often continued to operate with a great deal of local autonomy even after purchase by Verio. Some of the ISPs purchased by Verio were leading pioneers in the ISP industry (Digital Nation, NorthWestNet), representing the first wave of commercial ISP access in regional markets around the US and Europe.

Some[4][5][6] of these companies included:

See also

Notes

  1. ↑ http://www.viaverio.com/?page_id=134
  2. ↑ "Late Starter NTT Moves on U.S., Europe", Keith Dawson, Industry Standard's Media Grok email newsletter, May 09 2000.
  3. ↑ The Internet Data Services Report, MorganStanley, 11 August 1999, p. 30.
  4. ↑ Verio Inc. Consolidates Affiliates, Reinforces Position as Leading National Internet Company for Business and Institutions | Business Wire | Find Articles at BNET.com
  5. ↑ SEC Info - Verio Inc - 10-K/A - For 12/31/99
  6. ↑ Verio grows big with small clients - East Bay Business Times:

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