Verio and AOL Announce $42.5 Million Deal

The world’s largest domain-based Web-hosting company is about to get even bigger. Verio (Nasdaq: VRIO), which provides Web-hosting and e-commerce services for small businesses, announced on Thursday that America Online (NYSE: AOL) has chosen it to be the exclusive business Web-hosting partner for AOL and AOL-owned Compuserve.

Verio will pay at least $42.5 million (US$) to America Online and share a percentage of revenue with AOL under the terms of the agreement. Wall Street seems to think that this is a good deal for Verio. Shares of Verio were up more than 12 percent on Thursday, closing up 4 to 36-1/2. “This new partnership vastly expands Verio’s brand name recognition throughout its target market and underscores the position we have established as the world’s leading provider of Web-based services for small and mid-sized businesses,” Verio CEO Justin Jaschke said. The marketing agreement includes the transition of nearly 7,000 AOL PrimeHost and CompuServe BusinessWeb hosting customers to Verio for continued Web-hosting service. “Verio has established itself as one of the top business Web-hosting companies in the world,” AOL president and COO Bob Pittman said. “Teaming with Verio enables us to offer our existing PrimeHost and BusinessWeb customers new services, as well as the ability to offer other small and mid-sized companies comprehensive Web-hosting and enhanced services at great value.” Room for Growth Verio offers a variety of e-commerce plans for small businesses, including the affordable Cyberstand Commerce Plan, which includes a domain name, Web hosting, and the ability to sell up to 10 different products online. This service is available for $34.95, while much more extensive plans that cost as much as $124.95 a month are also available. America Online and Compuserve have a combined 18 million subscribers, and Verio says more than three million of the subscribers represent the small- and medium-sized business that are potential customers. “Co-branding with AOL will generate enormous exposure for Verio and dramatically heighten our visibility and Web-hosting volume,” Verio president and COO Herb Hribar said. “Verio’s highly reliable and scalable infrastructure and systems will enable us to efficiently manage the large number of new customers and Web sites that we expect from this relationship.”