DEALS DROP SITESTAR 17%.Byline: Chris Sieroty Staff Writer ENCINO - Shares of Sitestar Corp., an Internet holding company, lost almost 17 percent Tuesday after the company announced it had completed its acquisition of Lynchburg.net and Computers By Design, based in Lynchburg, Va. Clinton Sallee, president and chief executive officer of Sitestar, said the acquisition was part of the company's strategy to acquire mid-Atlantic based Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. , and will increase revenues by 85 percent. The two companies generate about $1.75 million in revenue, while Encino-based Sitestar generates about $1.85 million. Financial terms were not disclosed. ``Lynchburg.net is a perfect fit to our ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. consolidation strategy,'' Sallee said. ``It is in the heart of our geographic target area, has significant internal growth potential and is dominant within its local market.'' Jeff Cabot, senior vice president of Sutro & Co., said many small to mid-sized technology companies look to dominate a rural market, while the larger companies battle over bigger markets. ``The question is, can you dominate the niche,'' Cabot said. ``One thought is companies enter into rural areas because ultimately they will exit the business by selling out to a larger player.'' Dan Benson, a partner in the technology group at Deloitte & Touche, agreed. ``The model of the smaller ISP is to build a user base and then sell their company to an AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. or Earthlink. These companies are valued by their user base.'' With this acquisition, Sitestar has a presence throughout central and southern Virginia Southern Virginia is a regional name used to refer to an area in the U.S. state of Virginia, which includes the North Carolina-bordering counties of Brunswick, Charlotte, Greensville, Halifax, Henry, Lunenburg, Mecklenburg and Pittsylvania, and the cities of Danville, Emporia and and a potential customer base of 320,000 residents. ``We don't compete with companies like Earthlink,'' Sallee said. ``Our first company, Sitestar.net, is about 120 miles away in Martinville.'' Lynchburg.net offers Internet access See how to access the Internet. , Web design and ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. services to more than 3,000 subscribers. Computers By Design is a retail computer sales and service business, which markets its services online at www.recharge re·charge tr.v. re·charged, re·charg·ing, re·charg·es To charge again, especially to reenergize a storage battery. re .net. Shares of Sitestar fell 3 cents, or 16.6 percent, to close Tuesday at 15 cents. |
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