Exodus announces bankruptcy

Exodus, one of the largest Web site hosting companies and a Wall Street

darling at height of the dot.com frenzy announced it is filing for bankruptcy.

Exodus will continue to operate with the help of $200 million in new financing

from GE Capital.

"This action, while sounding ominous, will enable us to strengthen our

balance sheet by reducing our debt, eliminating unneeded facilities and

achieving cash flow breakeven, thereby ensuring sufficient cash to continue to

operate and grow our business," said Exodus CEO Bill Krause.

It is the second consecutive bankruptcy for Krause, the former head of 3Com.

Prior to Exodus Krause was president and CEO of Storm Technology until 1998 when

the company filed for bankruptcy protection. Krause replaced Ellen Hancock, the

former IBM and Apple Computer executive responsible for Exodus' rapid rise in

1998 and 1999.

By declaring bankruptcy, Silicon Valley-based Exodus will save some $80

million in quarterly interest payments. And by shutting down 10 Internet data

centers, it will save another $25 million per quarter in lease payments.

Exodus currently has 2,750 employees. Exodus has $3 billion in debt

obligations. The company had sales just over $1 billion in its most recent

fiscal year.