Rackspace Adds New Customer, New CFO
March 31st, 2008 By: Rich Miller
Marc Andreessen’s Ning has proven that there’s dynamic growth in providing white-label social networking tools for web sites. In a recent blog post, Andreessen said Ning now hosts more than 200,000 social networks, and is growing rapidly. Is there room for more than one provider to benefit from white-label community offerings? If so, it could benefit Rackspace, which today announced that it had signed Ning competitor Pringo Networks as an infrastructure customer. Rackspace also announced the hiring of a new CFO, which will likely increase the buzz about a possible IPO for the San Antonio company.
Ning and Pringo offer turnkey social networks that can be branded for use alongside a company web site, allowing users to share video and photos. “Rackspace provides our customers with a solid and reliable infrastructure on which to grow their business,” said Majid Abai, CEO of Pringo Networks.
Rackspace also announced that Bruce Knooihuizen will be its new chief financial officer. Knooihuizen joins Rackspace after 11 years with Dobson Communications Corporations in Oklahoma City where he was the executive vice president and CFO of the $1.4 billion rural and suburban wireless company. In his new role at Rackspace, Knooihuizen will be responsible for all of the company’s financial and accounting functions, including investor relations.
“Bruce brings to Rackspace a proven track record of growing a company,” said Lanham Napier, president and CEO of Rackspace. “Over his 11 years at Dobson, Bruce oversaw growth from a $34 million company to the $1.4 billion company they are today. This previous financial management experience really aligns with what we’re trying to do here at Rackspace.”
Might that include an IPO? Rackspace is privately held, but filed papers in preparation of a public offering in 2000, only to withdraw its plans after the dot-com crash chilled the market for Internet-related IPOs. Company execs acknowledge that an IPO is an eventual goal, but have said building the business was the first priority. The company reported revenue of $96.2 million in the third quarter of 2007, which it said was its 35th consecutive quarter of revenue growth.
In recent weeks there have been reports that Rackspace may again pursue an IPO, perhaps as a dutch auction. Rackspace recently unveiled a new corporate identity, and some interpret the hiring of a new CFO as a sign that the planets are aligning. Perhaps. But this speculation was also around in 2006, the last time Rackspace hired a new CFO, and no offering materialized.