Micron dumps PC biz, morphs into Web hoster

Buys Interland

By Linda Harrison • Get more from this author

Posted in Business, 24th March 2001 07:10 GMT

Micron Electronics today announced plans to dump its name and PC business to transform itself into a Web hosting business.

Micron has bought Atlanta-based Web hosting company Interland in a stock deal worth $130 million, and aims to merge the outfit with its own Web hosting subsidiary, HostPro, and take the Interland name. The merged company will be based in Atlanta - way from Micron's base in Idaho.

But Micron plans to completely metamorphose into a pure Web hosting company - and this means selling both its PC making business Micronpc.com and its chip recycling unit SpecTek (which accounted for around 97 per cent of sales in fiscal 2000).

The PC business will be sold to an unnamed private investment company for an undisclosed amount, while SpecTek will be offloaded onto former parent company Micron Technology on April 6 for $42 million. Micron Electronics is cutting around 400 jobs (16 per cent of staff) at the PC business.

The merged Interland hosting monster will have six data centres, 112,000 customers and more than 227,000 paid hosted Websites.

Micron Electronics also posted results for the second quarter ended March 1, showing a loss of $9.7 million on sales of $14.7 million, compared with a loss of $3.8 million on revenue of $6.6 million for the same period the previous year. These figures were for continuing operations (i.e. only its Web hosting business).

Including its now-ditched businesses, losses for the quarter were $168.9 million, compared to a profit of $5.7 million the previous year. ®