Economic Downturn and Hosting

Today, I was discussing the hosting industry with some friends who operate a web host service.  It was decided that they were noticing a difference in signups in the last 2-3 months. Especially in October.

Why would web hosting companies see a difference? Probably because a lot of small businesses are cutting back as well as normal consumers opting for free web hosting instead of a cheap hosting plan.

At our company we run some websites that offer information on the industry and we’ve seen a slow down in signups as well, but the website traffic is nearly the same as the previous months. The only explanation for this is a cut in consumer spending.

A lot of hosting companies rely on a high growth curve to support large scale marketing efforts, but without a steady influx of new consumers they may have to start making cuts in support staff, marketing, or some may even go out of business.  Yahoo has already increased prices on domain renewals to try to generate more revenue through existing customers. 

One of the problems with putting all your sites on one shared hosting plan is that if your host decides to raise the rate – you are kind of stuck unless you spend a lot of time and maybe money to move your site to a new company/server.  A good idea to prevent this problem is to keep your data backed up and be ready to move if needed. After the .com bubble burst there were a number of web hosting companies that went out of business.

If you’re looking to cut down on costs for your hobby site – you could try 20fr.com – it has some of the best free hosting available.  It’s ad supported, but for a hobby site or family blog it’s a perfect starting tool that won’t break the bank.

We’ll keep you posted on how this recession is hitting the industry as we get info.