Internet infrastructure provider


on Tuesday announced plans for an

initial public offering of up to 205 million shares.

The Sunnyvale, Calif.-based company was founded a year ago by


co-founder Marc Andreessen, who serves as chairman, and three former Netscape and

America Online

executives. Loudcloud helps operate about 30 Web sites for companies including




, which pay a monthly subscription fee for the service.

Loudcloud officials declined to comment on the public offering. But in its filing with the

Securities and Exchange Commission

, the company reported it had accumulated a $122 million deficit as of July 31, halfway through its fiscal year.

Loudcloud said it had "spent significant funds to develop our current services ... (and) incurred significant operating and net losses and negative cash flow and have not achieved profitability."

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The company has spent much of that money attracting and hiring new talent and developing the technology it uses to provide its automated Web site management services.

"They're putting money behind the technology to make them better and better and that is what's going to make the difference," said Jeanne Schaaf, senior analyst at

Forrester Research

."They add something to the market that is pretty unique."

Schaaf said the speed and quality with which Loudcloud is able to operate and manage Web sites for its clients puts it in competition with such heavy-hitters as





Loudcloud is anticipating further increases in its operating expenses from additional hiring, research and development and other costs. Its workforce has already grown from an initial 74 employees last year to 358 employees at the end of last month.

Goldman Sachs


Morgan Stanley Dean Witter

are the joint lead managing underwriters of the proposed offering.

Thomas Weisel Partners LLC


Epoch Partners

are co-managing underwriters of the proposed offering.