Domain Registrars Eye Shared Hosting for Expansion

Discount domain name registrars are actively targeting the web hosting market, offering rock-bottom pricing on shared hosting accounts in a bid to attract customers from established hosts. These providers are hoping to repeat their success in the domain name market, where millions of domains have shifted from Network Solutions to cheaper registrars.

Leading the charge is Go Daddy, which over the past two years has emerged as the pacesetter in the domain name market. Go Daddy's shared hosting business has grown rapidly since August 5, when it beefed up the account features on its hosting plans and cut prices to as low as $3.95 a month.

Active Sites at Go Daddy, 2003

"We want our Turbo Charged Hosting Plans to be the reason people call Go Daddy," said company president Bob Parsons, who founded Parsons Technology, Inc. and later sold it to Intuit, Inc before starting Go Daddy in 1997. "Our exceptionally competitive prices also include state-of-the-art storage devices to save and protect your data, network security systems with generator back ups and the 24/7 customer support."

Go Daddy's shared hosting business totalled 75,819 accounts as of mid-July. Since the introduction of the Turbo Charged plans, 37,823 new shared hosting accounts have signed up, according to spokesperson Kimberly Cecere, a 50 percent jump. Our own data, which will somewhat lag GoDaddy sales figures as customers start to build their sites, show that GoDaddy more than doubled the number of active sites - hostnames with varied HTML tag structure suggesting a working web site, as opposed to the templates commonly used by domain registrars - between July and September.

Go Daddy has registered nearly 2.9 million domains, with its reseller brand Wild West Domains registering another 386,000. The Scottsdale, Ariz. company also operates Domains By Proxy, which buys "private" domain names for registrants who want to keep their contact information out of the public domain database.

Go Daddy Group's growth appears to have come largely at the expense of Network Solutions, which continues to charge $35 for a one-year .com domain registration, while Go Daddy charges as little as $8.95 for new signups and $6.95 for transfers. NSI remains the largest domain registrar with more than 7.43 million domains. But its market share has eroded sharply in the past two years, during which total domains registered with NSI have fallen by more than 2.7 million, according to data from RegistrarStats.com.

The availability of cheap hosting and data center assets through bankruptcy proceedings is helping providers seeking to compete on price. An example is Intercosmos Media Group, Inc., which operates DirectNIC, one of the 10 largest domain registrars with more than 932,000 names registered. Earlier this year, Intercosmos paid just $250,000 to acquire a finished Enron Corp. data center in a bankruptcy sale. The 6,600 square foot New Orleans facility will house its new shared hosting division, Zipa.com, which is offering Linux accounts starting at $2 a month.

CEO Sigmund Solares said he intends for Zipa to become one of the world's largest hosting firms.

"We did it with domain names," Solares said. "Now we're doing it with web hosting."