Friday, June 8, 2007

Google As a Web Host

On May 26, 2007 we generally spoke about Google and its opportunities as a web hosting provider. It is difficult to predict but from what it seems it would be quite difficult for Google to enter the shared web hosting business. If you are familiar with Google's services you probably know that you could register domain names via Google and even use design templates provided by Google, but this is nothing like be a web hosting company. From experience we could tell you that the web hosting business in not like many others and for one it takes lots of customer attention. If you are a web hosting provider and do not put the customer first, you will be in lots of trouble. In order to for Google to get into web hosting they would need to open a large call center and be prepared for a large amount of people coming in to host their web sites with them. Many people will naturally choose Google to host their web site because of Google's reputation and success (people may even be willing to pay more in order to host their site with Google). So from a sales and marketing aspect Google should not have too much trouble becoming one of the largest hosts overnight, plus they probably won't have to spend a penny on marketing. But it is the issue of marketing that could hurt Google as a web hosting provider. This may not make sense when first reading this, but we will explain.
A majority of Google's revenue comes from people advertising on their search engine and network in order to gain traffic to their own web site. For example if you do a Google search for "web hosting" you will find ads all over the page. If you are a new Google user you may not realize that some of the web site listings are actually advertisements, but they are. This means that each time a person clicks on an ad served by Google, the advertiser must pay for the click. This is known as pay-per-click advertising, a form of advertising that has made Google very rich. If you are having trouble finding the ads located on a Google search page, the ads are either in a highlighted box or surrounded with the words "Sponsored Links". So if you click on an ad in the Sponsored Links section you will be directed to a web site that is advertising on Google. Just a quick note, this is a very popular method of Internet advertising and if you have a web site you may want to consider advertising on Google. Every iPowerWeb web hosting account comes with a free $30 Google Advertising credit. This means that you can begin advertising on Google risk-free.
So getting back to the subject of Google as a web host, if Google was to provide web hosting services they would most likely promote their services via ads on their search pages meaning that if you were to search for "web hosting" on Google there will be a good chance that you will see Google promoting its own web hosting services. This will force Google's advertisers in the web hosting market to leave, this will be due to the reason that Google will control the entire web hosting genre and leave little room for its competitors to succeed. A great example of this is Yahoo!, who for a while was making a great amount of money from web hosting companies who would advertise their services on Yahoo's web site and search engine. Yahoo was making a great amount money from these hosting companies until they started providing hosting services themselves. Today, very few web hosting companies advertise on Yahoo's search engine due to poor conversion rates. This is mainly due to the fact that Yahoo controls their entire search landscape, so if you were to search for hosting services on the Yahoo! web site - you will definitely see ads for Yahoo's own web hosting services. As we know Yahoo is fa more than just a search engine and is out there to make money. If Google were to get into web hosting it would be out of their business model (in most cases) and they may end up with results like Yahoo! - many new hosting accounts but a significant loss in advertising dollars. This is a very tough subject, but it does not look like Google will start offering shared hosting services any time soon. It would make sense for them to stick to their core business (search engine services) and remain the world leader and continue to gain market share. Although no one will know the answer except for Google and you could be sure they will study the actions of many web hosting companies, including Yahoo! before they ever make the move into the business.

2 comments:

Anonymous said...

I would not have google be my web hosting provider. I call Ipowerweb about 5 times a month and cannot imagine google providing the telephone support I receive from ipowerweb. I'm sure google would offer some really cheap hosting though, maybe even freeeeee.

Stef said...

web hosting = ipowerweb for me and thats it. cheap and good thats what i expect and receive.