WebProNews

Internet hosting companies in Australia could be the focus of interest from major online players like Microsoft, Yahoo, and Google. Consolidation rather than the pioneering approach may appeal to Internet giants who want to leave bigger footprints on Australian soil. Google and others may wish to pick up a few of those hosting players and connect them to server farms.

Analysts cited by the Financial Times Mergermarket report think the big data centers Microsoft or Google could construct would lead them to offer hosting services.

The significant reason for this rests with the telecom industry in the country. Said Financial Times:

Paul Budde, an Australian telecommunications analyst agreed that "in a new digital media environment the value-added infrastructure will evolve around IT, including data centres, content hosting, management, billing and outsourcing." This, he said, is one of the fastest growing segments of the market.

"In their scramble to keep their monopolies in place, the telcos have taken their eyes off the ball and, for example, MSN, Google and Yahoo are building more than one million servers as we speak," Budde said. Telcos "should have been in this business," but have chosen to see the Internet companies as enemies rather than customers, he said.

Such shortsightedness leaves big Internet companies without formidable entrenched telcos to battle, as they have to deal with in the US. Whether Microsoft and other companies want to step into Australian Internet hosting operations in this manner depends on how well they can profit from doing so.