Olympic Web site host pulls the plug

The Salt Lake Organizing Committee said that San Mateo, Calif.-based Logictier, which designs and manages Internet Web sites, is changing its business and can no longer work with the committee on the SaltLake2002.com Web site.

Mitt Romney, chief executive of the Salt Lake Organizing Committee, said that as a result of the recent move by Logictier, the committee will be looking for another partner to host SaltLake2002.com. Logictier, however, has agreed to continue to work with the committee in the short term to host the Web site until a new partner is found, Romney said.

The Salt Lake Organizing Committee "is flexible enough that we will be able to rearrange our commitment with Logictier. However, we are very dependent on the Web site and will have to find a solution quickly," Romney said in a statement. "This latest development unfortunately is a sign of the times in this industry."

Logictier declined to comment.

Logictier, which claimed funding from venture capital firm Kleiner Perkins Caufield & Byers, among others, is one of a handful of so-called managed service providers (MSPs). This market segment includes companies such as Loudcloud, MimeCom, SiteSmith, and others.

These companies host and manage Internet infrastructure, such as Web servers, routers, and other network equipment, so that their customers don't have to. MSPs often lease this expensive gear to customers on a monthly fee basis.

But their business models require massive capital to purchase equipment and bandwidth, and in these tough times, venture capital dollars have evaporated. As a result, many smaller providers are hurting, Loudcloud among them.

Meanwhile, the largest Web hosting companies, which at one time simply rented space in their secure, air-conditioned data centers, now are moving into the managed services market. They too want to capture the recurring monthly revenue made possible by managing these complex services for business customers. Exodus Communications, the No. 1 Web hosting company, and others such as AboveNet, Digex, and Intel Online Services now provide some managed services.

Founded in September 1999, Logictier announced in August that the committee named it as the official Internet operations sponsor and supplier for the 2002 Olympic Games. Under the deal, Logictier had said it will work closely with the committee to launch the hardware, software, security, facilities, bandwidth and technical support necessary for the operation of the site.

Logictier's decision to pull out of the deal comes after clouds gathered over a second major Olympics deal. Under a joint venture, NBC and San Francisco-based Quokka Sports had selected Logictier in February to manage the operations for the NBCOlympics.com Web site. Last month, Quokka filed for Chapter 11 bankruptcy protection.

News.com's Corey Grice contributed to this report.