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Rackspace Aquires Webmail.
2007-10-01, HostMan.biz Rackspace enters deal with webmail, expansion coming. E-mail hosting company Webmail.us has come a long way since the days when it operated in the basement of a rented house. And it's about to get even bigger. Co-founder and chief executive officer Pat Matthews is expected to announce publicly today that the 8-year-old company has been acquired by Rackspace Managed Hosting, a Web-hosting business headquartered in San Antonio. The deal, which Matthews characterized as a merger of two complements, is expected to allow Webmail to grow at an even faster clip -- right here in Blacksburg. "We don't see this as an exit strategy," Matthews, 30, said of the acquisition. "We're calling this phase two." Webmail, which now occupies 7,500 square feet in the newly expanded University Mall, employs about 65 people, serves roughly 72,000 businesses and was recently named one of the 500 fastest-growing private companies in the nation by Inc. magazine. And Matthews -- who will become president of Rackspace's Webmail.us division -- said he and his leadership team are looking to hire 100 new employees in the next two years. Those employees, who will all be based in Blacksburg, will fill a variety of positions, including in software development, engineering, e-mail system administration and customer care. What does the acquisition mean for Webmail's long-term plans in Blacksburg? "I'm not going anywhere," Matthews said. "The whole deal is fundamentally based on our building a very unique division of Rackspace out of Blacksburg. "I am super committed to this region," he added. "Rackspace knows that. Rackspace respects that." "Blacksburg is, we think, an important part of our future," agreed Lew Moorman, Rackspace's senior vice president of strategy and corporate development. "We'll have a mail presence here in San Antonio, but we expect the business to grow very aggressively, so there will be quite a few jobs in both locations." Founded in 1998, Rackspace operates eight data centers and manages the infrastructure and technology associated with running Web applications for about 14,000 customers. According to a Friday release by Rackspace, the 1,800-employee company brought in $84 million in revenue in the second quarter of 2007. For the past few years, Webmail has been both a customer and partner of Rackspace, using the company's data centers, as well as partnering with it to offer e-mail systems to Rackspace customers. As a result, Moorman said, "we're in constant conversation," and that conversation eventually led to acquisition talks and the realization that "we could become a dominant force in mail and we're like-minded about where we should all be headed." According to Inc.'s September report, Webmail's revenue has surged in recent years, jumping from $279,671 in 2003 to $3.2 million in 2006, and the company's Web site says it is on target to generate more than $6 million in sales this year. Matthews declined to say how much the San Antonio company paid for Webmail, but acknowledged he's "really happy with the deal." After all, he noted, it wasn't one born out of necessity. Instead, Matthews said the deal was spurred by a desire to compete with a handful of very large companies that had recently started moving into the e-mail-hosting sphere. Just two weeks ago, for example, Yahoo announced it had entered into a $350 million acquisition agreement with Zimbra, an e-mail hosting and software firm. "Some very big providers have come into our market, and in order to most effectively compete, we felt it was important to align ourselves with another industry leader," Matthews said. |
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