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Micron set to acquire Web hosting firm

Delivering on an earlier promise to go on a buying spree, Micron Electronics plans to acquire a Web hosting firm to boost its efforts to offer subscription-based computing services.

    Micron Electronics, delivering on an earlier promise to go on a buying spree, today said it will acquire a Web hosting firm to boost its efforts to offer subscription-based computing services.

    Micron said it signed a nonbinding letter of intent to acquire Lightrealm, a Web hosting and Internet access company based in Kirkland, Washington. Micron will pay cash for all outstanding stock in Lightrealm, pending a definitive agreement and approval by Micron's board.

    The terms of the agreement were not announced.

    The acquisition is the first of several promised by Micron Electronics' CEO Joel Kocher as he moves to make Micron a relevant player again in the PC industry. The company will spend around $210 million during fiscal 2000 to drive a new initiative called "subscription computing."

    Micron's purchase of Lightrealm "bolsters our services infrastructure, complements our Web and applications hosting offerings, and enhances our ability to deliver the benefits of 'Subscription Computing,'" Kocher said in a statement.

    Lightrealm has 42,500 paid customers and annual revenues of approximately $9 million, according to Micron. The company said it is now the fifth-largest Web hosting provider in the United States as measured by subscribers.

    Micron just last week detailed its efforts to sell PCs and services on a subscription basis. Under the plan, Micron will offer government customers as well as small- and medium-size businesses with fewer than 2,500 employees a wide range of products and services--including Web hosting, e-commerce services, and PC hardware--at a monthly rate.

    The company has already acquired HostPro, another Web hosting company, and formed a subsidiary, Micron PC Web Services, as a part of a move into services.