Interland Announces Strategic Changes Designed To Improve Financial Results

October 18, 2005; 06:07 AM

Atlanta - Oct. 18, 2005 Interland (NASDAQ: INLD), a leading provider of websites and online services for small and medium- sized businesses, today announced that it has made several strategic changes designed to improve its financial results, add transparency to its business and decrease costs. In particular, the company announced a reduction in personnel, a new fiscal year and a change in the officer structure of the company.

“Since joining Interland in early August, it has been my goal to turn around the company, improve its financial position and increase shareholder value," said Jeffrey M. Stibel, CEO of Interland. “We took a hard look at the business and determined that today’s strategic changes were necessary and prudent for the overall health of the company. The decision to re-size our employee base was extremely difficult, however it was needed to streamline operations and increase operating efficiencies.”

To improve costs and operating efficiencies, Interland has trimmed its employee base by approximately 38 percent, which includes the previously announced reduction of 139 employees from the sale of its dedicated server assets to Peer 1 Network. These changes will take place by the end of the calendar year and will result in cost savings moving forward. After giving effect to these reductions, Interland’s approximate employee count will stand at 280.
In addition, Interland will begin preparing its financial reports on a calendar year basis starting January 1, 2006. Interland intends to change its fiscal year from an August 31st year end, to a December 31st year end which the company believes will help increase transparency. Consequently, Interland anticipates filing a Form 10-Q report for the quarter ending November 30, 2005 (which would have been the first fiscal quarter under the old fiscal year) as well as an interim financial report for the Transition Period ending December 31, 2005.

Finally, Interland has changed its corporate officer structure. Interland has reduced the number of executive officers from seven to four. The executive officers now include its President and Chief Executive Officer, Jeffrey M. Stibel; Chief Financial Officer, Gonzalo Troncoso; General Counsel, Jonathan Wilson; and Chief Operations Officer, Richard Pitrolo.

For further information, please refer to the Company’s Form 8-K.

About Interland

Interland, Inc. (NASDAQ: INLD) is a leading provider of websites and online services focused on helping small and medium-sized businesses achieve success by providing the knowledge, services and tools to build, manage and promote businesses online. Interland offers a wide selection of online services, including standardized Web hosting, ecommerce, application hosting, website development, online marketing and optimization tools. For more information about Interland, please visit www.interland.com or call at 800-336-9883.

Website http://www.interland.com