Feature Price Rejects Bids, Shuts Down
May 9, 2003 -- (WEB HOST INDUSTRY REVIEW) -- In
a rare instance of what appears to be one man walking away
from a million dollar payday, Feature Price (featureprice.com)
appears to have disintegrated amidst strange behavior and
customer outcry.
Rumors of the Ft. Meyers, Fl.-based Web hosting
firm being troubled have circulated for months, helped in part
by Travis Johnson, co-founder of the firm, who reportedly shut
down the site in April to post an open letter informing
customers that the company had closed and that clients had two
weeks to evacuate. Since then, the site has switched on and
off almost daily, customers and people close to the situation
say, with employees being told to help themselves to equipment
and office supplies. At press time the company's site was
operational, but the only number listed on the site was giving
a busy disconnected signal.
"Feature Price.com / Hosting-Network, Inc. is
closing business April 2003," read the letter title posted by
Johnson in April, which has been removed from company's site
but cached in Google.
The news was shocking to many in the hosting
industry since Feature Price was known to be vastly profitable
in 2002, reportedly racking in $1.6 million in profits. At its
peak, the company had 60,000 customers serviced by 23
employees and several co-founders, of which Johnson was one
and Fathi Said, an Austrian citizen, the other. Feature Price
is said to have been adding about 3,000 customers per month,
with churn averaging four per cent. Technical support,
outsourced to a company in India, was reported to be average.
The business started disintegrating in December
2002 when Said and Johnson had a falling out, sources say.
Said left the company, reportedly returning to Austria, and
sources report that Johnson starting acting erratically, at
one point reportedly physically assaulting a pizza
deliveryman. As customer service deteriorated some clients
added to the stress, allegedly trying to break down the door
to collect on a $16 charge they felt was unfair, and slashing
tires on Johnson's car. One self-styled activist and a former
customer in contact with Said, Maggie Sedai, told theWHIR that
by April the customer churn had reached 20 percent.
Competitors willing to buy Feature Price assets
did come out of the woodwork during the course of Q1, with at
least one getting as far as signing a final sale contract with
Johnson, said people familiar with the situation. One offer
was as large as $1 million, but Johnson reportedly signed off
on the sale and then reversed the contract through his
attorney.
Johnson is believed to have suffered an anxiety
attack after Feature Price's merchant account holder, Nova
Information Systems, alarmed by the number of charge backs on
customers' credit cards, stopped processing new accounts for
Feature Price, say sources familiar with the situation. Upon
rejecting the offer to sell Feature Price in April, Johnson
posted his infamous letter on the site, listing all five
companies that did due diligence interested in buying Feature
Price - GlobalHost, IPowerWeb, Atlantic.net, SERVER4FREE and
Affinity - and essentially outlined the acquisition terms
except for the financial details. Johnson also wrote that
customers had two weeks to leave, essentially trying to
destroy the value of the company.
People familiar with situation suggest that upon
deciding not to sell the company Johnson told employees to
start taking servers home, and while the staff has never been
formally laid off Feature Price stopped operations in May,
de-facto. The Florida Attorney General's office confirmed
there is an investigation into the company, which is owned by
another Johnson venture, Hosting Networks Inc., which also
owns another Johnson venture CLEC Edison Telephone. All these
corporate entities appear defunct.
Johnson was not reachable at the press time. His
attorney did not return a request for comment by deadline.
SERVER4FREE, a German hosting provider, has set up a St.
Louis-based firm, Server4You, which has introduced a program
to welcome existing Feature Price customers. Several other Web
hosting firms have implemented similar promotions.
