Internet hosting services company Exodus Communications Inc agreed to pay out $280m in stock yesterday for internet applications monitoring company Service Metrics Inc. Founded in June 1998, Service Metrics launched its first commercial service, SM-Web, in March of this year, and last month released version 2.0. It has received $15.5m in equity funding.
Boulder, Colorado-based Service Metrics has been establishing a proprietary network of data collection agents across the internet worldwide. The information gathered can then be used by internet service providers to monitor their own and competitors’ sites so that they can take action to avoid the performance bottlenecks that discourage visitors. Exodus says it will use the service to identify and resolve customer issues, and optimize web site performance.
Service Metrics will become a wholly-owned subsidiary of Exodus, and is expected to remain in Boulder and continue selling its services to outside companies. Current customers include About.com, eToys.com, TheStreet.com and ZDNet. It is expected to add around $15m in revenue to Exodus’ sales in 2000. The acquisition, accounted for as a pooling of interests, is expected to have been completed by the end of the year. The acquisition leaves Service Metrics competitor Keynote Systems Inc of San Mateo, California, as the only comparable independent player in the web monitoring market.
