business of managing and maintaining powerful computers and software for Internet companies are combining in a $6.5 billion stock deal.

Exodus Communications Inc. will purchase Bermuda-based Global Crossing Ltd.

subsidiary GlobalCenter Inc. for $6.525 billion in stock, the two companies announced yesterday. The transaction, which would give Global Crossing a 17 percent stake in Exodus, is expected to be completed by early 2001.

The combination of the world's No. 1 and No. 3 Web hosting companies would create a powerful sales, marketing and technical force aimed at attracting more customers in the increasingly lucrative market of outsourcing Web computers, software applications and technical consulting and services.

Exodus chairman Ellen M. Hancock called the deal "a major strategic milestone for our company,'' saying it would "give us the additional scale, scope and international reach to extend our position as the preferred provider of mission-critical web hosting solutions to customers worldwide.'' The US Web-hosting business was worth $1.7 billion last year, according to research firm International Corp., and is expected by 2004 to grow to a $17.6 billion market as dozens of companies move to capture a share of the market.

BellSouth announced on Wednesday that it would join Intel Corp., Level 3 Communications and others in offering Web and application hosting services.

GlobalCenter has ten data centres worldwide, with about 500 customers, including Yahoo!, eToys, MP3.com and AskJeeves. Exodus has 22 data centres and more than 3,300 customers, including DoubleClick, eBay Inc., Lycos and Priceline.com.

Global Crossing in transaction As part of the transaction, Exodus and Global Crossing also agreed to set up a joint venture to provide Web hosting services in Asia, and Exodus made a ten-year commitment to use Global Crossing's network of fibre optic cables.

Global Crossing also will market Exodus' services to its own customers.

In July, Bermuda-based Global Crossing rejected a similar offer from Santa Clara, California, Exodus, believing the offer was too low. But analysts said the landscape may have changed since then in light of Worldcom Inc.'s $3 billion acquisition earlier this month of Intermedia Communications Inc., which held a controlling interest in Web hosting company Digex Inc.

Exodus and Global Crossing were also in the running to acquire Intermedia and its majority stake in Digex.