After signing up tens of thousands of free accounts, 1&1 Internet has launched its paid services in the U.S., offering shared hosting from $4.99 a month and dedicated servers starting at $49 a month.

1&1, Europe’s largest hosting company with more than 3.5 million hostnames, said it had already signed up more than 100,000 accounts through a pre-launch promotion offering free hosting for three years. The offer sought to raise 1&1’s profile in America and quickly gain a critical mass of customers.

“1&1 sets new standards on the US Web hosting market with a domain price as low as $5.88 a year and $49 a month for a dedicated server,” said Andreas Gauger, chief executive officer for 1&1 Internet.

The domain offer shaves 11 cents off 1&1’s previous .com registration price, already the lowest among major hosting providers. At $49 a month, 1&1’s dedicated server offering matches the recent launch pricing of Server4You, the American arm of another expansion-minded German host, Intergenia AG. 1&1 also is offering template-driven e-commerce sites for small businesses at monthly rates between $9.99 and $49.99.

In 2003 1&1 Internet AG gained over 800K hostnames, a 30% increase over the year, to become the largest hoster worldwide with over 3.5M hostnames in December 2003. The Netcraft Hosting Provider Switching Analysis showed the US operation to gain over 9K hostnames in December 2003, with largest gains from GoDaddy, EV1Servers and eNom.