Interland (NASDAQ:INLD), which hosts websites for small and medium-sized businesses, recently conducted a 780-respondent survey for those businesses. According to the results, roughly 57% of respondents generate monthly revenue from their websites. This should be good news for Interland, right? Maybe, but the company continues to struggle.

In the fourth quarter, revenues declined 7.6% to $20.6 million, and the net loss was unchanged at $6.2 million.

In fact, Interland is in the midst of a restructuring (actually, that has been a common theme with this company over the years). There is a new CEO, Jeffrey M. Stibel, as well as three new board members.

The new regime has taken quick action to stabilize the situation. Perhaps the most important step was to sell off the company's dedicated server business, which generated a much-needed $14 million in cash.

Next, there was a 38% reduction in the workforce. It also helps that the company is now in compliance with the rigorous internal controls requirements of Sarbanes-Oxley (which is not only expensive, but time-consuming).

Last year, Interland extolled its plan to capitalize on the surge in online marketing. Wouldn't this be a perfect fit for small businesses, which need to constantly find new customers? This is a great market, as Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) have demonstrated.

The idea was for small businesses to advertise on search engines (keyword advertising), in directories, and so on -- with Inland acting as a reseller and accordingly taking a cut for selling access to those areas. On paper it made a lot of sense, but business owners are likely going directly to Google or Yahoo! instead. It's very easy to do and, again, the bigger companies provide rich tools for advertising, which get better and better all the time.

The problem is: Why go with Interland when you can go with Google or Yahoo? They have more distribution and offer greater power and flexibility (as well as competitive prices). As I indicated in a piece I wrote last year, the best bet for Interland is to sell its business to a bigger player. The company's recent restructuring activities may be the precursor for just such an action.

Fool contributor Tom Taulli does not own shares mentioned in this article.