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Press releases | Archive 2007

RBC consolidates seven web hosting companies and becomes market leader in Russia

Moscow, September 12, 2007 - OAO RBC Information Systems (MICEX, RTS: RBCI) announces the consolidation of web hosting assets by acquiring five hosting companies and buying partners' stakes in the Hosting-Center and Ukraina-Host companies. As a result of these transactions, RBC became the owner of the following hosting and domain name registration companies in Russia: Hosting-Center, Centrohost, Garant-Park-Telecom (including the R01 domain name registrator), SpaceWeb, PeterHost, Arbatek and the Ukrainian-based hosting provider host.com.ua.

Following the consolidation of the acquired assets, RBC has become a clear leader on the Russian market of web hosting services. The total number of web sites hosted by RBC is about 100,000, accounting for more than 20% of the Russian hosing market 1. At present, over 900,000 domain names are registered in the RU domain zone already. RBC comes in second in terms of the number of registered domain names in Russia, after RU-Center, and runs more than 215,000 domains, which constitute approximately 23% of the domain registration market.

The total turnover of the acquired companies is expected to reach $11m in 2007, with an average EBITDA margin of about 30%. The acquisitions were made based on an average P/EBITDA ratio of 7.2. RBC's hosting business is expected to grow by approximately 40% in the next few years.

The acquired assets will be operated by Mediamir, an RBC subsidiary that focuses on the development of general interest Internet services. Mediamir's General Director Mikhail Gourevitch said, "We firmly believe the consolidation of web hosting service providers under RBC's umbrella will allow achieving strong revenue and profitability levels in this business due to cross-selling and strong synergies in many areas, including advertising and promotion. We expect to further increase the profitability of our hosting and domain name registration services by implementing the most modern technological platforms and combining our expertise and experience."

Presently, hosting means not only provision of space on a server to make web sites accessible via Internet, but also comprehensive solutions coupled with domain name registration. Hosting companies are now actively adopting user-friendly solutions, which do not require any special training and equip clients with the necessary tools to design their own websites, online blogs, forums etc. All that creates strong demand for web hosting services among a wide range of people.

The Compound Annual Growth Rate (CAGR) of the Russian hosting market reached 44% over the past three years. The number of registered domains in the national RU zone has increased 61% to around 718,000 . Experts and market participants share the opinion that such a pace of growth will be maintained until at least 2009.

The global hosting market is more developed and consolidated than the Russian one. According to Neftcraft.com and Webhosting.info, 1&1, a division of the United Internet holding, leads the international market with over 3 million hosted web sites. US-based GoDaddy is the number one domain name registrator on a global scale and the largest hosting company in the United States, running 12 million domain names and over 1 million websites. Finally, Yahoo! with more than 2 million domain names and 1 million hosted websites, ranks third among the world's top three.

1 - According to stat.nic.ru, cnews.ru

Press and investor contacts:
Egor Timofeev
Tel: +7 (495) 363-1111
Email: pr@rbc.ru
Web: www.rbcholding.com