Rackspace IPO Auction Commences

SAN ANTONIO--(Business Wire)--
Rackspace(R) Hosting, Inc. today announced that the auction for
its proposed initial public offering of its common stock has
commenced. Rackspace announced that it expects the offering to price
after the stock market closes on or about Thursday, August 7, 2008.

Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC and
Merrill Lynch & Co. are acting as joint book-running managers for the
offering. W.R. Hambrecht + Co., LLC, Jefferies & Company, Inc., Cowen
and Company, LLC, RBC Capital Markets Corporation, JMP Securities LLC,
Signal Hill Capital Group LLC, and E*TRADE Securities LLC are the
co-managers for the offering. Rackspace will offer 12,700,000 shares
of its common stock in the offering. The selling stockholders will
offer an additional 2,300,000 shares of common stock in the offering.
Rackspace and the selling stockholders have also granted the
underwriters a 30-day option to purchase up to an aggregate of
2,250,000 additional shares.

Rackspace is conducting the offering as a modified Dutch auction.
The preliminary prospectus, which is available at Rackspace's auction
website www.rackspaceipo.com, contains further information about
Rackspace, the offering and the structure of the auction. In addition,
the site also provides a link to a recording of the management
presentation to prospective investors.

Rackspace's auction website also contains information about how to
contact the underwriters to open a brokerage account with one of the
underwriters.

A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers to
buy be accepted prior to the time that the registration statement
becomes effective. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any
sale of these securities in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction. No offer to buy securities can be accepted and no part
of the purchase price can be received until the registration statement
has become effective, and any such offer may be withdrawn or revoked,
without obligation or commitment of any kind, at any time until the
notice of its acceptance has is given after the effective date.

Copies of the preliminary prospectus for the offering may be
obtained from Goldman, Sachs & Co., Attention: Prospectus Department,
85 Broad Street, New York, New York 10004, by facsimile at
212-902-9316 or by e-mail at prospectus-ny@ny.email.gs.com; from
Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison
Avenue, New York, NY 10010, telephone 800-221-1037; or from Merrill
Lynch & Co., 4 World Financial Center, New York, NY 10080, telephone
866-500-5408.

About Rackspace Hosting

Rackspace(R) Hosting, Inc. provides IT systems and computing as a
service to more than 33,000 customers worldwide. Rackspace Hosting's
offerings include managed hosting, email hosting, cloud hosting and
platform hosting.

Rackspace(R) Hosting, Inc.
Media Relations
Annalie Drusch, 210-312-7290
media@rackspace.com
or
Investor Relations
Karl Pichler, 210-312-7291
inquiries@rackspace.com

Copyright Business Wire 2008