Verizon and Interland Announce Three-Year Agreement to Offer Web Hosting and E-Commerce Services

NEW YORK / ATLANTA -- Small and medium-sized businesses in the Northeast and Mid-Atlantic states that want to create or expand their Internet presence soon will be able to go 'e' with the help of Verizon and Interland.

Verizon Communications, (NYSE:VZ), the national communications company formed by the merger of Bell Atlantic and GTE, and Interland Inc., (NASDAQ: ILND), a global provider of Web enabling solutions, announced today a three-year strategic relationship to market and sell a full range of Web hosting, design, and consulting services, as well as bundled packages of these and other Internet services, to small and medium-sized businesses.

"Surveys have indicated that Internet hosting and e-commerce are the hottest emerging issues with business managers, and there is a strong demand in the market right now for reliable access and hosting services to enhance the competitive position of small and medium-sized businesses," said Bob Ingalls, president of Verizon's Business Solutions Group. "Interland's extensive customer support system and the reliability and scalability of its technology will enable us to deliver to our customers solutions that will enable them to grow their businesses and work more efficiently via the Web," Ingalls said.

The relationship is outlined in three agreements: a marketing channel agreement, a service provider agreement and billing and collection agreement. Under the marketing channel agreement, Interland and Verizon will jointly market Interland's full suite of Web hosting, managed services, Web design, and related e-commerce solutions to over two million Verizon small and medium business customers in the Northeast and Mid-Atlantic states beginning in November. Under this agreement, the services will be sold and supported by Interland's sales and customer support teams to businesses that will become Interland customers.

As part of this agreement, Verizon and Interland will equally split marketing expenses, with each company initially committing a minimum $6 million in co-marketing funds. The Interland-enabled services will be co-branded and will be Verizon's only stand-alone shared Web hosting offering to small and medium businesses in the region. Prices for the hosting and support services will depend on the hosting plan, storage capacity and other features selected from the Interland suite of services.

The service provider agreement will enable Verizon's marketing, sales and service organizations to market and sell a full suite of shared Web hosting services directly, with Interland serving as the provider of these services to Verizon. This service agreement calls for Interland to host, manage, and maintain both the Verizon-owned Web servers where customer sites will reside, and the associated networks and Internet connections to Interland's Atlanta data center.

"Interland is the leader in addressing the specific needs of small and medium-size businesses," said Ken Gavranovic, president and CEO, Interland, Inc. "Marketing Interland's services to Verizon's broad customer base gives us the opportunity to reach out to small and medium-size business customers who recognize the need to have a digital presence and utilize Web applications to enhance their business. By joining forces with Verizon, we have access to an established base of potential customers, providing them with one-stop bundled solutions and allowing them the opportunity to take advantage of next generation Internet products, e-commerce services and around-the clock technical expertise."

Under the billing and collection services agreement, customers will enjoy the convenience of having their bills for Interland's advanced data services appear on their monthly telephone bill.

Verizon Information Services will continue to market and sell its Web@once and SuperSite Web sites on SuperPages.com through it's Yellow Pages sales teams, and will explore opportunities to incorporate Interland's capabilities.

Research by Interland and Verizon shows that more and more companies have technology needs that exceed the skills of internal managers, local server technology and in-house technical support, and are looking for bundled solutions. Businesses looking to expand revenues and interact with suppliers and vendors require effective, economical support to grow on the Web and are outsourcing Web hosting solutions to reduce costs, increase service reliability and improve Web site performance, Ingalls said.

In addition, the companies have signed a letter of intent to negotiate additional agreements, including one that would enable Interland's sales team to bundle Verizon and Interland products and services, such as Verizon high-speed DSL (digital subscriber line services).

In May 2000, Verizon (then Bell Atlantic) announced its $25 million investment in Interland, Inc. As part of these exclusive agreements announced today, Interland agreed to issue warrants to Verizon, which allows them to increase ownership interest in Interland to approximately 10 percent if exercised.

"The partnership matches Interland's application expertise and infrastructure with Verizon's network management, broad customer base and high-speed access services," Ingalls said. "We see it as a formula for success."

About Interland

Interland, Inc. is a leader in providing managed Web hosting services for over 83,000 Web sites around the world through its U.S. and European offices. As one of the leading hosting companies in the rapidly growing $19 billion hosting market, Interland provides a full spectrum of Web design, managed hosting services, e-commerce solutions and business applications hosting. Interland's hosting services are based primarily on the Microsoft NT, Windows 2000 and Red Hat Linux operating systems, providing diversity and flexible options to its customers. In September, the company was recognized for hosting the largest number of active Windows 2000 Web sites in the world. Strategic partners include Microsoft (NASDAQ: MSFT), Network Solutions (NASDAQ: NSOL) and Verizon (NYSE: VZ). For more information, please visit www.interland.com

About Verizon

Verizon Communications, formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with more than 100 million access line equivalents and 25.6 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 revenues,Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.