What's with all the free hosts?

Artashes

Artashes

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"Hey ya"

Lately I've seen too many people starting and succeeding at operating exclusively free hosting ventures.

No question that free stuff attracts plenty of webmasters, but what I'm NOT getting is this: Are they really that profitable to see these companies explode in numbers? Is advertising still the only support those free hosts are getting?

I have seen a company literally growing from 15 accounts to over 10,000 in less than 6 months! And they are still in business. So, finally the big question is: Are free hosts starting to get more profitable than paid hosts? :shocked:

Best,
 
That's definitely a good question Artashes - one I've often pondered upon myself.

Frankly, it still puzzles me exactly how these guys can turn a decent profit from a free hosting operation. I'm certainly well aware of banner advertising, but my only guess for the sucess is just the sheer number of hits and clicks that would be generated. I suppose that unlike a paid host, there wouldn't be much time spent on support...instead it would be just to keep the server running from day to day with as little downtime as possible.

I would think that eventually these operations get too large though. Granted, you can sure cram hundreds and hundreds of accounts onto a server, but concerns for content would have me leary of the situation coupled with resources.

In the end, I don't think that it's more profitable than a strong paid hosting company. It looks like more of a short term situation (1-2 years or more) than a long term company you'll see around in five years. There are always exceptions of course, but how many free hosts can you name besides the huge companies that have been around for a long time? Not many.
 
As Denver noticed, I would not expect decent support from a free host who would most likely be happy keeping more than 95% uptime.

Hurga, I imagine banner and text ads they implement on free accounts (newsletter mailings) serve as their only income.

Best,
 
When it comes down to Free Vs. Paid, I would definitelly choose paid. Why? You at least have the impression you're working for someone, there is constant cash flow, You can develop it gradually, the resources needed are much lower than in the case of Free Hosting.
 
Free hosting is cropping up so quickly due to the prices, and outrageous offers of these other small paid hosting companies. Because it's free, they have no commitments to keeping the site up - aside from their advertisers, so if things go sour, they can pack up shop and disappear, no reprecussions.

I doubt they make enough to support the time spent on creating it - but once you have those free clients, you can advertise anything you want, including your own products under a different name - i'd say that may be an important part of running a free service. If bravenet can do it, so can everyone else ;).....maybe

Also add in the fact that because it's free, you generally don't hear complaints about a free host that decided to pack up and leave with no notification, so everyone thinks it's possible - no complaints, no real information on the business, therefore no indication of it's actual status as a viable and sustainable business.
 
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I offer small free hosting space on one of my sites. It's really only enough for a one page site. My main purpose was advertising. I can't see some of these folks offering 25-50 megs for free. There can't be any benefits to it.
 
It also could be that prices for internet advertising is going up recently which helps pays for their business.
 
if there is free hosting you will expect a massive load of account requests in the first month, people cannot resist anything free! this is why my free host went down within the 1st month, there were all kinds of attacks, strange requests and illegal things hosted.
 
Well, there are also some free hosting providers that also offer paid services. Their "low-end/free" packages are simply a way to try to get people to sign up and then upgrade when they run out of the limited space and bandwidth that was provided...
 
I have to admit to my mistake of actually trying this. I offered free hosting, 25 megabytes, with strict rules against any types of file storage, etc. I did this hoping that they would soon upgrade. Well, I found out after about a week that they will not only never upgrade (not saying that I expect them to upgrade within one week), but they will require more support than my paid customers, since most free customers have next to no experience with hosting. 9 out of 10 free customers put xcelhosting.net as the target domain, so 9 out of 10 times I had to email them stating that the target domain is the domain that they wish to host with me. So then I get an email back with whatever.com. Of course they don't own whatever.com and won't pay to own it, so they end up with whatever.xcelhosting.net. I do think however, that offering free hosting is a good way to test how much traffic your site actually gets. In 2 days, I had 11 free signups. I guess that must mean that I either am getting an OK amount of hits, or that people tell their friends. Anyway, I stopped offering free hosting after a week, but allowed the free customers to stay, as long as they obide by my TOS made just for free accounts. Since 75% violated that and after 3 warnings continued to do so, I'm down to about 6 free accounts, most of which use no more than 3 MB, so I guess I'm ok. I was concerned that I would end up having a server full of nonpaying customers, so I decided that it was time to end it. It just wasn't worth the extra work for a possibility that they might become a customer.

P.S. I guess some people haven't gotten the point that I don't offer the free package anymore, since I have had 3 people sign up for my low-end package without payment and when receiving an email requesting payment, I got the reply of "I signed up for the free one."

It's very hard to keep up with all of the problems that free customers can put you through. I hope my personal experience can help anybody who is thinking about this or is currently doing it.

So, in conclusion, i would have to say (from my own experience) that paid hosts are better off...unless I was doing something completely wrong...which is also very possible. ;)
 
Jordan, that was very interesting insight and breakdown. You should write an article on your experience. I don't recall reading any stories like these.
 
He did exactly what I want to do. After reading everything about it I feel I may be also be ending it within the first month. Or possibly only accept a few clients a month. Depending on how rapid people signup with no advertising whatever (as Jordan also mentioned, a good gauge on how much traffic your real plan page is getting).

If anything I think will be a learning experience.
 
if you are going to provide free hosting and want to make people upgrade then force them to!

"Get 1 month free hosting with 150MB storage and 1GB bandwidth with control panel, then simply upgrade to any payed package to continue your account."

then you send the package request email 5 days before the month ends and then if they dont pay you suspend the account for a period of time then delete it if no pay!
 
Jordan's story makes a lot of sense actually. I remember the first free hosting account I had... back then I had no idea about anything. Should it have come with proper support I would've flooded them with questions of all types - most of which almost idiotic. :)
 
if you are going to provide free hosting and want to make people upgrade then force them to!
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That's just a trial period. I would never want to force my clients to do anything unless what they are doing is illegal or a violation of my terms.

If anything I think will be a learning experience.
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Eger, are you also a paid host? I would highly recommend that you sit down and do so research on some other free hosts (which I failed to do) and figure out exactly what they require of their clients, their allotments of space, bandwidth, email, etc. Also, you need a VERY strict TOS. For example, I had free customers (if using their own domain) set the nameservers to mine within 3 days. Checking .tk and .uni.cc domains are very difficult if not impossible (i haven't figured out how yet). Its also a good idea to confirm their email address as many attempts at free hosting are often made with fake email addresses. You want to avoid at all costs the risk of your server being used for spam. Getting blacklisted is one of the worst things for a host. Many signups came from countries such as China or United Arab Emirates (determined from IP), when the address they entered at signup was a US Address. BEWARE!

Above all, you must keep on top of your free clients as they are lot as trustworthy as paid customers for the most part as you don't really have a method of identity confirmation. Also, you must be prepared to support them if you are going to offer support.

You need to know what you can afford to give away for free and if you even can! Good luck with whatever you decide. Let us know what happens of if you need any advice!
 
CrazyTech said:
Frankly, it still puzzles me exactly how these guys can turn a decent profit from a free hosting operation. I'm certainly well aware of banner advertising, but my only guess for the sucess is just the sheer number of hits and clicks that would be generated. I suppose that unlike a paid host, there wouldn't be much time spent on support...instead it would be just to keep the server running from day to day with as little downtime as possible.
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BINGO! - I can only speak from personal experience, but we do spend the vast majority of our time on system monitoring, tuning, checking up on existing and new signups and their content, and then we'll see if we can help out folks who email support-related questions. It's a vastly different approach to the business I used to be in (as a paid-hosting company General Manager back in 1998).
I would think that eventually these operations get too large though. Granted, you can sure cram hundreds and hundreds of accounts onto a server, but concerns for content would have me leary of the situation coupled with resources.
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True, it has its risks. I won't try to mislead anyone on that part of it, but for our part, we've had a lot of experience in this particular area (ie. maintaining a large number of users on a hosting environment). But truly, part of the draw and challenge to this is the inherent difficulty and the fact that so many fail at it... we see GeoCities and Tripod and know that at some point it could pay off in the end.
In the end, I don't think that it's more profitable than a strong paid hosting company. It looks like more of a short term situation (1-2 years or more) than a long term company you'll see around in five years. There are always exceptions of course, but how many free hosts can you name besides the huge companies that have been around for a long time? Not many.
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There are more than you would think... I guess it's all about how well you can manage your advertising revenue vs. expenses and overall business issues (staff, resources, etc...).

Thanks for starting this thread... it was a nice change of pace to see some very good questions posed about the free hosting industry. :)

To address another one of the previous questions:

But how do they pay for their upstream connections if they're providing free hosting?
I can only speak for us, but we have our own datacenter and have had for many years. We have established connectivity and existing customers separated from our free business. That enabled us to get started... managing the load and resource drain is now the key, but we're continuing to find out interesting ways to handle this on an almost weekly basis. Thanks to the abusers, we've become fairly battle-hardened.
 
why?

We do it just to give back to the people. But we had to cut out many features available since it is all free. Some of the components, services , etc you would normally see in a low cost web host are not in our site nor is the space and bandwidth.

We dont even offer the accounts openly. We have an invite system in place. We randomly give out invite codes to existing members but track it all. If they abuse it or if the person they give the code to abuses the free hosting.... they are BOTH kicked. Only fair way to police it all.

We dont do it for money. We dont have any ads on the members sites.
 
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