Prodigy to buy BizOnThe.Net for $154M

Internet service provider Prodigy Communications said yesterday it intends to buy BizOnThe.Net, a small business Web hosting company.

Prodigy will pay about $US100 million ($A154.3 million) in stock and cash for the company, which has more than 80,000 billable subscribers and 140 employees, David Trachtenberg, Prodigy president and chief operating officer, said.

BizOnThe.Net is a division of US Republic Communications, which is a subsidiary of VarTec Telecom, a privately-held, long distance telecommunications company based in Dallas, Texas.

The acquisition will allow Prodigy to step up efforts to attract small businesses to its online services, Trachtenberg said. Since January, Prodigy has expanded its internet services for businesses to include internet access, Web hosting, Web design, and intranet and e-commerce applications.

BizOnThe.Net adds a significant customer base and a strong sales channel, Trachtenberg said. "We are going to make it easier for small businesses to focus on business rather than IT needs," he added.

Prodigy's small business services will now be called Prodigy BizOnThe.Net and will be based in Houston.

An analyst said Prodigy's move is in line with the company's internet service provider (ISP) strategy focusing on smaller businesses and consumers.

Prodigy has staked out a claim to expand its ISP business by adding related services, said George Peabody, managing director for telecommunications research with the Aberdeen Group. "This acquisition certainly is consistent with their business plan to stick with consumers and small businesses," he said.

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