February 28, 2003 -- (WEB HOST INDUSTRY REVIEW) -- The Web hosting industry saw significant movements of just about every kind this week, as companies were impacted by regulatory decisions, began restructuring efforts, purchased and sold assets, appointed executives and launched new products.

On Wednesday it was reported that four former executives at telecommunications firm Qwest Communications International have been indicted on charges relating to corporate accounting fraud. The US Department of Justice obtained a 12-count grand jury indictment in Denver, charging the executives with a conspiracy that intentionally deceived the investing public and the Securities and Exchange Commission about the company's finances.

The defendants charged in the indictment include: Grant Graham, chief financial officer for Qwest's global business unit; Thomas Hall, senior vice president in the government and educational solutions group within Qwest's global business unit; John Walker, a vice president in the government and educational solutions group; and Bryan Treadway, an assistant controller at Qwest.

And on Thursday, it was reported that the Attorney General of the United Sates said it would seize Internet domain names that had allegedly been used to violate the law. American law enforcement officials reportedly intend to shut down Internet sites that violate drug or trade patents and copyrights. Domains that are taken control of in this way will forward to US federal Web sites, displaying messages explaining that they have been taken over.

While federal regulators made several decisions that would have significant impacts on service providers this week, several service providers made big decisions about their own futures.

On Tuesday, enterprise solution provider divine Inc. announced that its board of directors has authorized the company and several of its subsidiaries to file a voluntary petition for reorganization under Chapter 11 of the US Bankruptcy Code. The company said it has engaged financial advisory firm Casas, Benjamin & White LLC to assist divine's management team in handling day-to-day operations. The petition will be filed in the US Bankruptcy Court in Boston, Massachusetts, the venue where divine subsidiary RoweCom's Chapter 11 case is proceeding.

Also on Tuesday, communications carrier Broadwing announced that it has reached an agreement to sell the assets of its broadband business, Broadwing Communications Services Inc., including the Broadwing name, to privately-held C III Communications LLC for $129 million in cash. According to the terms of the agreement, C III Communications will assume certain long-term operating liabilities of Broadwing Communications Services, and will continue providing services to customers and will retain current employees.

And while Broadwing put its assets up for sale this week, a number of other companies made moves in quite the opposite direction, seeking to build their organizations through acquisition.

On Tuesday, communications company IDT Corporation announced that it intended to submit an offer for the purchase of bankrupt telecommunications company Global Crossing. IDT said its bid would at least match the economics of, and would be more viable than the bid submitted last August by Hong Kong-based conglomerate Hutchinson Whampoa Ltd. and state-controlled Sinapore Technology Pte Ltd.

And on Wednesday, managed Web hosting provider Rackspace Managed Hosting announced that it has acquired a new east coast data center to support the company's rapid growth. Located in Herndon, Virginia, the data center includes 33,000 square feet of built-out data center facility, and will support a multi-homed Cisco-powered network, based on the latest Cisco technology and Catalyst 6500 switches. The acquisition comes just nine months after Rackspace acquired an additional San Antonio data center in May of 2002. Since the acquisition, the San Antonio facility has been filled to capacity with new and expanding Rackspace customers.

Along with all the major business-steering decisions, several companies operating around the hosting business announced new additions to their rosters, including both products and employees.

On Monday, hosting automation solution developer SWsoft announced that it has released the results of internal testing for the Windows version of its Virtuozzo OS virtualization platform. The company says the Windows version of Virtuozzo allows IT managers to slice Intel servers into more than 100 dynamically resizable Windows Virtual Environments. The company says a public testing for the product will begin in three months, and the product is scheduled for commercial release in six months.

Also on Modnay, Internet security company TruSecure announced that it has made a number of new appointments. The company has appointed Michael Rothman to the position of vice president of marketing and John Holland to the position of senior vice president of international operations. The company has also expanded its executive sales team, adding Bryan T. Gernert as senior vice president of sales in charge of the company's North American sales functions and Ed Choi as vice president of sales operations, along with Carl Nessen as VP of sales in the northeast US and eastern Canada, Brett Davis as VP of sales in the southeast and central US and David Crea as VP of sales in the western US and western Canada.

The thread that tied the news from the Web hosting industry together this week seemed to be variety, as the business saw announcements of just about every type imaginable, including legal action, bankruptcy, assets bought and sold, executives appointed and products launched. While it may not have all been good news for everybody, it was, at least, an interesting week of news.