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AT&T to expand Web hosting in 2001

Ma Bell announces the opening of two new Web hosting facilities and details plans to double its capacity by building eight new data centers.

AT&T announced the opening of two new Web hosting facilities Tuesday and detailed plans to double its capacity by building eight new data centers this year.

The new hosting centers, opened in December, are located in the New York-New Jersey area and Orlando, Fla. Ma Bell now has 13 data centers with more than 1 million square feet of hosting space, underscoring its efforts to tackle new business opportunities amid sluggish growth in some of its older markets.

The communications giant intends to build eight more Web hosting facilities--at least one internationally--this year. The new construction would give AT&T more than 2 million square feet of hosting space.

Data hosting centers are secure, air-conditioned facilities with high-speed Internet connectivity and backup power designed to house high-end Web, database and application server computers. The industry has grown in size and stature in recent years with the expansion of the Internet and Net-related businesses. Companies such as Exodus Communications, AboveNet and Intel Online Services, among others, have made a lucrative business out of renting their data center real estate and monitoring the computers for dot-com companies.

Several communications companies, including Ma Bell, Qwest Communications International and Level 3 Communications, also have built several data centers in recent years. Not only do these carriers want a piece of the hosting action, but hosting adds value to their networks and can help stave off falling profits in their core long-distance voice and data transport businesses.

AT&T says it is the only company with 1 million square feet of hosting space, plus a high-speed, coast-to-coast fiber-optic network capable of delivering data at OC-192, or 10 gigabits per second.

AT&T stock received a Wall Street analyst upgrade Tuesday. Shares have traded as high as $61 and as low as $16.50 in the past year.