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Global-Exodus deal dead
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July 17, 2000: 9:10 a.m. ET
Talks on Global's Web hosting unit reportedly called off in price stalemate
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NEW YORK (CNNfn) - Long-distance provider Global Crossing Ltd. reportedly called off talks over the weekend to sell its Web site-hosting unit to Exodus Communications after the two firms failed to agree on a price.
The two companies entered serious negotiations more than a week ago and agreed in principle to sell the unit for approximately $7 billion in stock, the New York Times reported Monday. But after word of the negotiations leaked last week, Exodus' stock soared, leading executives of the Santa Clara, Calif.-based company to request the share swap be revised, the Times said.
 The final proposal from Exodus (EXDS: Research, Estimates) offered Global Crossing (GBLX: Research, Estimates) roughly 151 million shares of Exodus common stock, or a 27 percent stake in the company, valuing the Web unit, GlobalCenter, at roughly $6.6 billion, the paper said.
The deal for GlobalCenter, whose services allow companies to outsource management of their Web sites, would have provided a timely boost to Exodus' leading position in that field. Japanese telecommunications titan Nippon Telegraph and Telephone recently joined the fray, purchasing Exodus rival Verio Inc. (VRIO: Research, Estimates) for $5.5 billion.
Global Crossing acquired the Web hosting unit in its 1999 $10 billion acquisition of Frontier Communications.
The Exodus talks confused some analysts, who suggested Global Crossing might be positioning itself as an acquisition target by discarding the unit. Just last week, the Bermuda-based company sold its slow-growing local phone business to Citizens Communications Corp. for $3.65 billion in cash, seemingly to focus international data and voice transmissions.
With the Exodus deal now dead, Global Crossing likely will proceed with a plan to issue a tracking stock for the unit.
Exodus shares climbed 6-1/16 to 55-1/4 Friday while Global Crossing shed 3/8 to 33. 
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