INTERLAND ACQUIRES DEDICATED WEB HOST DIALTONE INTERNET, SEIZES NUMBER ONE POSITION IN BOTH MANAGED DEDICATED AND SHARED HOSTING

Web hosting company Interland, Inc., announces its fourth acquisition in six months, and seizes the number one industry position, surpassing former leader Verio.

ATLANTA -- Interland, Inc. (Nasdaq: INLD), the leading provider of business-class Web hosting services to small and medium businesses, today announced it has acquired Fort Lauderdale, Florida-based managed dedicated Web hosting company Dialtone Internet. Terms of the transaction were not disclosed.

The acquisition, the fourth completed by Interland in the last six months, including the small business Web hosting businesses of Interliant, AT&T, and CommuniTech.Net, moves Interland solidly into the lead in the small and medium enterprise (SME) hosting space, surpassing former leader Verio in total customers with approximately 220,000 recurring revenue Web hosting customer accounts, and 400,000 paid hosted Web sites. Interland also seizes the lead in managed dedicated hosting, with a total of 7,000 dedicated servers under management, outpacing Verio by an estimated 30 percent and Rackspace by 40 percent. According to Netcraft analysis of top hosting companies in the world, Interland is the number one Microsoft Windows 2000 hoster on the Web , as well.

Dialtone Internet is a perfect strategic fit for rapidly growing Interland," said Joel J. Kocher, Interland chairman and chief executive officer. Dialtone has built a successful and growing dedicated hosting business, focused on meeting the dedicated hosting needs of small and medium businesses. Dialtone brings to the table technological strength and a leading dedicated market position that will serve as a platform for further expansion into the managed dedicated market. By joining forces, we gain even greater scale and efficiency, which not only gives us a competitive edge, but also allows us to offer our customers even greater value."

Kocher said the acquisition differs from some of those the company has made, in that Interland has acquired all the assets and employees of Dialtone Internet, and plans to continue the operation with its current staff. Alvaro Albarracin, Dialtone founder and chief executive officer, has accepted an executive position with Interland, and is expected to continue to run the Fort Lauderdale operation. Kocher also said the Dialtone operation is already profitable, so the transaction is immediately accretive to earnings.

In any industry, the desired position to be in is number one," said Albarracin. Dialtone Internet is very excited not only to be joining a leading company in our industry, but also to be in part responsible for vaulting Interland well ahead of the competition. This union will bring strength to both our companies, and it will bring advantages to our customers and resellers."

In the past several months, Interland has taken advantage of its strong cash position and weakened market conditions to gain scale through acquisitions. Last month, the company was recognized by industry analyst firm Frost & Sullivan, which awarded Interland its Merger and Acquisition Strategy Award for 2001, calling the company a rising star in the small to medium enterprise hosting market" and one of the few companies to watch in the next year due to the importance its executives have put on strengthening the financial foundations of the company."

"I am convinced that Interland is becoming one of the strongest SME hosting providers in the country and poses a serious threat to its competition," said Frost & Sullivan analyst Jarad Carleton.

Weve set out with a very clear vision, to be the worldwide leader in delivering standardized, business-class hosting solutions to small and medium businesses. By keeping our focus exclusively on that market, Interland can meet the unique needs of those businesses, and help them succeed and grow," said Kocher. More businesses trust Interland with their Web site than any other hosting company."

"Interland's growth-through-acquisition strategy has allowed them to very rapidly become the leading provider in the small and medium business space," said Helen Chan, analyst for the Yankee Group. "There are very few major hosting companies left that are focused solely on the SME market, a market segment exhibiting healthy growth. In fact, even smaller SMEs (2 to 19 employees) are spending at least 65 percent more per month on hosting today than they were in 2000."

Kocher said the scale Interland has gained is helping the company reach its profitability goals more rapidly than it could otherwise, especially in the weakened economy of the past year. The company has stated that it expects to achieve free cash flow by August 2002.

Interland, Inc. (Nasdaq: INLD) is the leading provider of business-class Web hosting solutions for small and medium businesses, offering a broad portfolio of standardized Web hosting, e-commerce, and application hosting services, from basic Web sites to managed dedicated hosting solutions. Interland manages 400,000 paid hosted Web sites, making it the largest hosting company, in a market projected to reach more than $16.2 billion by 2005. More information about Interland can be found at www.interland.com.

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The foregoing contains "forward-looking statements" which are based on managements beliefs as well as on a number of management assumptions concerning future events and on information currently available to management. Such forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside Interlands control, which could cause actual results to differ materially from such statements. Statements regarding the future financial results expected to result from a planned acquisition are dependent upon the accuracy of numerous assumptions and projections relating to transition and integration costs and other factors, and no assurance can be given of the accuracy of such statements. For a more detailed description of factors that could cause a difference between forward-looking statements and actual results, please see Interlands filings with the Securities and Exchange Commission including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, and its proxy statement. Interland disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.