Web Hosting Provider, iWeb, Reports Near Double Revenue Growth

Martin Leclair , President, Products and Technology noted, ”Monthly revenues reached the $2.4 million mark in March, though we have to work even harder to maintain that pace, given the current economic context. In recent months, we noticed a slowdown in new net recurring revenues, mostly due to an increase in the churn rate. This increase in churn is mainly attributable to current clients who are downsizing the level of certain services which were not considered essential at this time. We believe that these same services will be reintroduced when our customers’ situation will allow them to pursue more ventures.”
Philip Tousignant , Chief Financial Officer added, ”The strong improvement of our operations, in terms of profitability, is not yet reflected in our net results. Due to financial expenses resulting from external market conditions, totalling $560,000 for the last quarter, we are reporting a net loss. For the second consecutive quarter, the main element of these financial expenses is the unrealized exchange loss on the long-term debt of $10 million US.”
Revenues for the second quarter ended March 31, 2009 increased by $3.4 million or 94%, compared to the same period of 2008, to reach almost $6.9 million.
Revenues for the second quarter of fiscal 2009 originated from iWeb’s three main service offerings as follows: Dedicated servers accounted for 85%, followed by 8% for co-location services and 7% for the shared web hosting. 78% of iWeb revenues for the quarter were generated in U.S. dollars, a significant advantage for the Company during the last quarter, as the impact of the decrease in value of the Canadian dollar against the U.S. dollar compared to the same period of last year, had a positive impact of more than $1.0 million on revenues. Without taking into account this impact, revenues would have increased by 65% compared to the quarter ended on March 31, 2008.
Gross profit was 51% of revenues for the second quarter of 2009 compared to 53% for the same period of the previous year. The favourable impact of the variation of Canada/U.S. exchange rates on gross profit margin for the last quarter was more than compensated by higher payroll expenses in order to support the sustained high growth of the Company’s operations.

Operating expenses for the quarter went from 52.1% of revenues in 2008 to 46.3% in 2009. This improvement is explained by lower costs compared to the revenues for selling and administrative expenses, but compensated by a rise in interest expenses. Selling expenses decreased from 17.3% to 15.3% of revenues for the quarter ended March 31, 2009. Administrative expenses decreased from 26.0% to 20.2% of revenues for the quarter ended March 31, 2009. Interest expenses increased significantly (from 7.2% to 10.9% of revenues for the second quarter of 2009). This is caused by the increase in long-term debt in order to support the important addition of the infrastructures of the Company, the greater part of which carry interests in U.S. currency.

The operating income of the Company was $324,000 for the quarter ended March 31, 2009, compared to $6,000 for the corresponding period of the preceding year.
The other financial expenses represent elements which are the consequence of the external conditions of the market. These expenses amounted to $560,000 for the last quarter ended March 31, 2009. The most important element of these expenses is the unrealized exchange loss on the long-term debt of $10 million US. For the end of quarter ended March 31, 2009, the Canada/U.S. exchange rate was 1.26, compared to 1.225 for the beginning of quarter, explaining the unrealized loss of $356,000.
Taking into account the impact of the other financial expenses, the Company recorded a net loss of $246,000 for the second quarter of 2009, compared to a net income of $19,000 for the quarter ended March 31, 2008.

Own Domain Name with Web Hosting Service…

1. Build Trust with Customers

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It’s well worth the investment to establish your own domain name and pay a small monthly fee for cheap web hosting. When you gain the trust of visitors, it’s much easier to turn them into paying customers.

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With your own domain name, you have total freedom to design your site the way you want. Even virtual hosts that offer cheap web hosting will give you the freedom to use the type of web design that will work best for your business. If you need to use PHP in your web design, you can easily find a low cost web hosting package that offers PHP integration. If you need to add MySQL databases to your site, you can find web site hosting packages with this feature included.

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When you secure your own domain name, you have complete freedom in your promotions. Many search engines, directories and other promotional sites will frown at “free” hosted sites. When you use a free web page hosting service, your site pages are placed on a website along with many other types of businesses. The search engines will not recognize your site as being a unique entity. They might even lump your site into categories with other sites that are using the free service. This wounds your promotional efforts tremendously, and you end up wasting time and money.

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Free Vs. Paid Web Hosting

With the growing number of free Web Hosting servives available on the Internet today, you may be asking yourself "Why should I pay for Web Hosting when I can get it for free?". This is actually a very good question and in the this article, I plan on evaluating the benefits of each type of Web Hosting.

One of the biggest compaints that users of free Web Hosting have is that they must often allow the Web Host to include banners or advertisements on their Web Sites. You've probably come accross a Hypermart or GeoCities Web Site and seen how an advertisement window pops up when you access the site. Many people find this annoying and want the freedom that paid Web Hosting allows.

Another big factor that often causes people to go in search of paid Web Hosting is the desire to have a domain name. Most free Web Hosting companies do not give you this opportunity. If you do have access to your own domain with a free Web Host, chances are that you will have to put up with advertisements on your Web Site.

Most companies that offer free Web Hosting also have strict limitations with regards to running and installing your own CGI scripts. Some will provide pre-installed scripts that you will have access to such as guestbooks, counters, or email form processors. However, if you want to test, install and run your own scripts, you will probably need to find a reliable paid Web Host. If this is a feature that you are interested in, be sure to ask any potential Web Host about their CGI script policies since they vary widely from company to company.

If you have a fairly large Web site or offer lots of graphics, free Web Hosting may present some problems for you. Most free Web Hosting companies have strict disk space limits, usually 5-10 MB or less. While this is plenty for most Web Sites, some may find this is not enough. Before signing up with any Hosting service, be sure to ask ask disk space limits and the policies invloved in increasing the alloted space.

Ultimately, the type of Web Hosting you choose depends on the specific needs of your Web Site. If you have a small personal Web Site and don't mind the ads and limititations that come with most free Web Hosting, then that may be the best choice for you. However, if you have a company or business, then you probably want your own domain name and that usually requires that you find paid Web Hosting.