ISLAND TO MERGE WITH SANDPIPER NETWORKS'EXPANDING
SERVICES FOR GLOBALIZING E-BUSINESS APPLICATIONS
Industry Leaders Unite to Redefine Network Services for Deploying Successful
SAN FRANCISCO, CA -- October 25, 1999
Digital Island, Inc. (NASDAQ: ISLD),
a leading provider of network services for globalizing e-Business
applications, announced today that it has agreed to merge with Sandpiper
Networks, Inc., the leading provider of content delivery solutions for
The combined company will integrate content delivery, hosting and
intelligent network services to address the two significant requirements of
global e-Business applications: support for centrally controlled and secure
transactions and fast content delivery at the edges of the network. In
addition, the new entity will combine key intellectual property from both
companies including Digital Island's TraceWare(tm) software and Sandpiper
Networks' FootprintSM content delivery technologies to make Web experiences
faster and more locally relevant.
"Providing the best possible Web-site experience is critical to building
and retaining brand loyalty," Ruann F. Ernst, President and CEO of Digital
Island said. "Together, Digital Island and Sandpiper Networks will empower
our customers to attract and grow their revenues by delivering excellent
end-user experiences -- anywhere, anytime."
"Digital Island and Sandpiper Networks share a common vision regarding
best possible way to distribute computing intelligence around the world and
deliver the right experience to the ultimate user," Leo Spiegel, President
and CEO of Sandpiper Networks said. "Now, we can even more effectively
fulfill our vision by combining our world-class engineers, networks and
technologies to better meet the needs of our global customers."
Upon completion of the merger, Digital Island's global intelligent network
of five data centers that directly serve 21 countries will be integrated
with Sandpiper Networks' content delivery network consisting of over 1,200
enterprise-class servers to create the first complete solution for Web-based
marketing, sales, fulfillment and support applications worldwide. Digital
Island and Sandpiper Networks have already adopted the same
industry-standard platforms for advanced edge-network architectures. Both
companies have in common Inktomi® caching and mirroring software,
enterprise servers from Sun Microsystems®, Microsoft® and RealNetworks®
software for streaming audio and video services, and Vignette® for
publishing and content management applications.
The combined entity will have more than 100 customers including E*Trade,
Cisco Systems, Intuit, Novell, CNBC.com, Mastercard, Value America,
Microsoft, and the Los Angeles Times.
"The merger of Digital Island and Sandpiper Networks is truly significant
for global e-Business, said David Peterschmidt, President and CEO of
Inktomi Corporation. "We intend to work closely with the combined company
define the standards for improving global Internet performance and to
develop the next generation of network services."
"The merger of Digital Island and Sandpiper Networks raises the bar in
Internet industry from both a business and technological perspective,"
Christos M. Cotsakos, Chairman, CEO and director of E*Trade Group, Inc. and
a member of the board of directors of Digital Island. "Each an innovator,
they now have created a superb category of global network services that
brings together world-class resources for conducting business on the
Pursuant to the terms of the merger, Sandpiper's shareholders will
1.07shares of Digital Island for each Sandpiper share, or a total of
approximately 27 million shares on a fully converted basis of Digital
Island. The merger is subject to approval by shareholders of both parties
and standard regulatory approvals. Officers, directors and certain
affiliates holding over 50% of the voting power of Sandpiper Networks and
45% of the voting power of Digital Island have executed voting agreements in
support of the transaction.
Ruann F. Ernst, currently President and CEO of Digital Island, will assume
the CEO position in the combined company. Leo Spiegel, currently President
and CEO of Sandpiper Networks will become President. Allan Leinwand, VP
Engineering/CTO of Digital Island, will become VP of Internetwork
Engineering and CTO. Sandpiper Network Founders Dave Farber and Andrew
Swart will assume the roles of Chief Scientist and VP of Software
Engineering, respectively. The combined company will be headquartered in
San Francisco and will have sales offices, regional data centers, and
operations facilities spanning eight countries.
Digital Island® is a leading provider of network services for globalizing
e-Business applications. Digital Island serves companies that need to
securely and consistently extend business-critical applications for
marketing, selling, supporting, or distributing products via the Internet.
Digital Island e-Network Services include global content distribution and
hosting services, localization of the end user online experience and a
reliable global Intelligent Network, all of which are designed to deliver
the right content, to the right customer, in the right market, at the right
time. The Company has regional data centers in New York, Santa Clara,
Honolulu, London and Hong Kong, connecting directly into 21 countries with
Local Content Managers in more than 13 markets worldwide to provide the
ubiquity and reach of the public Internet with the quality and functionality
normally available only in a corporate wide-area network.
Sandpiper Networks is the world's first Content Delivery service
provider for the Internet. Founded in 1996, Sandpiper Networks has built
what it believes to be the largest and most comprehensive Content Delivery
Network (CDN). The company's initial service offering, FootprintSM , gives
leading e-Businesses the power to deliver Web sites more effectively and
profitably while significantly improving site performance. Footprint is
designed to ensure the delivery of fresh Web content of all types while
providing management statistics that are vital to Web-centric businesses.
Completion of the merger is subject to customary conditions, including
stockholder approvals and antitrust review.
DIGITAL ISLAND is a registered trademark of Digital Island, Inc. All other
trademarks are properties of their respective owners.
This release may contain forward-looking statements that involve risks and
uncertainties. Important factors which could cause actual results to differ
materially from those in the forward-looking statements, include but are not
limited to: the companies' short operating history which makes it difficult
to predict its future results of operations; each company's history of
operating losses and expected future losses which could impede its or their
combined ability to address the risks and difficulties encountered by
companies in new and rapidly evolving markets; each company's future
operating results could fluctuate which may cause volatility or a decline in
the price of the Digital Island's stock; each company may not be able to
price its services above the overall cost of bandwidth causing its financial
results to suffer; common or unforeseen difficulties in completing the merge
or in integrating the combined companies' management, personnel, operations
and businesses; and other factors detailed in Digital Island's filings with
the Securities and Exchange Commission including its recent filing on Form
Contact at DIGITAL ISLAND: Investor Relations contact for
Irwin Greenstein Kate Rajeck/Christine
[email protected] [email protected]
for SANDPIPER NETWORKS:
858/457-4888 ext. 132