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ihug was New Zealand's third largest ISP (behind Xtra and TelstraClear), before it was bought, then absorbed by Vodafone New Zealand (the country's largest mobile phone operator). According to 2005 estimates, it had over 100,000 internet and phone subscribers. Before 2000 ihug was New Zealand's largest ISP but as other ISPs began offering flat rate services, some customers opted to transfer to those providers.

ihug originally stood for Internet Home Users Group, even though the name was seldom used. It was also known as The Internet Group or 'TIG' in Australia. Ihug was sold to iiNet in 2003 before being sold to Vodafone in 2006 after interest from then Television New Zealand subsidiary THL and competitor Orcon. Its headquarters are in Auckland, New Zealand. The former CEO was Mark Rushworth, who became Manager of Marketing at Vodafone NZ.

The company also ran a small subscription television service in Auckland for a short period.

After Vodafone retired the ihug brand in April 2008, existing customers were moved to Vodafone's own internet services, although customers had the choice of retaining their email addresses.