Adult Web hosting company NationalNet, Inc. has bought Texas-based Mach10 Hosting, the companies announced late December 29. The terms of the deal were not revealed. But NationalNet says they plan to make at least six similar acquisitions in 2004.
"NationalNet is the logical choice for my customers because they can provide the superior level of customer service that people have come to expect from my staff," Mach10 Hosting president Sean Hicks said in a statement. "While enhancing customer support, this merger also provides to my customers redundant network connectivity, and a portfolio of diverse support services unparalleled in the Web hosting industry."
NationalNet executive vice president Bill VanVorst called Mach10 a customer-focused, high-end Web hosting service "we felt would compliment the NationalNet culture."
Mach10 moved to NationalNet's data centers at midnight December 29. Hicks could not be reached for further comment before this story went to press.
NationalNet president Tony Morgan said this deal is part of a trend he sees of continuing consolidation in the adult hosting business. "In my opinion, 2004 will see more consolidation in our industry than in any year past," Morgan said. "And we want to be poised to aggressively take advantage of these opportunities as they arise."
He told AVN.com NationalNet's six planned acquisitions for 2004 include one that could be finished by mid-January, though he wouldn't suggest which deal he had in mind. NationalNet bought out StrictlyHosting.com earlier this year, among several other such deals.
Morgan also said he'd been trying to buy Mach10 for a year, but Hicks was reluctant to sell at first. But two weeks before announcing the sale, the two sides began working on the deal in earnest, in part because, as Morgan put it, Hicks and his wife decided at last they wanted to slow down their working lives.
"We actually didn't make the deal solid until just a couple of days ago," Morgan said. "The Web hosting business is a very unique operation. You can be a large hosting company and make money, you can be a small hosting company and make money. If you're a medium-size company, you can make some money but spend 24 hours a day making it. And what happened is, after five years of doing this, Sean was just tired, and he and his wife had some other opportunities present themselves, just to slow down. And I don't blame them. I can understand that. We got lucky, we grew quickly."
Morgan said a major reason why he sees a continuing and growing trend toward consolidation in Web hosting is "feeling the effects of deflation.
"The cost of goods sold is getting cheaper and cheaper every day. However, the customer support is not. Salaries aren't getting cheaper, the things it takes to keep a customer happy aren't getting any cheaper, and all kinds of infrastructure tools are getting very expensive," he said. "A lot of companies are reaching the brick wall and asking if it's better to continue or if it's better to get out."
