Domain registrar Go Daddy has begun selling virtual private servers (VPS) and dedicated servers, continuing an expansion that helped it become one of the fastest-growing hosting providers of 2004 in our Hosting Provider Switching Analysis. The move comes as the Scottsdale, Ariz. provider is preparing a major publicity campaign to increase its visibility, kicked off by a Super Bowl ad.

Go Daddy is using SWSoft's Virtuozzo to power its VPS offering, following in the footsteps of EV1Servers, which announced a major VPS hosting initiative in September. VPS uses "virtual partitions" that allow a single machine to be used by multiple customers, with better security than shared hosting but many of the features of a dedicated server. While it has been a pioneer in discount pricing of domains and shared hosting, Go Daddy's dedicated server offerings start at $219 a month and VPS at $39.95 a month, well above the offerings of current price leaders in those categories.

Discount dedicated servers have been enormously popular in recent years, driving huge growth for EV1Servers and a succession of competitors who matched or undercut its $99 a year pricing. Hosting resellers and resource-intensive web sites have been the primary users of dedicated offerings, but the customer pool has expanded dramatically as prices decreased, making them more accessible to sites previously housed on shared servers.

Go Daddy experienced the third-largest gain in active sites over 2004, trailing only 1&1 Internet and The Planet as it added 206K active sites - those which contain actual content, an approach that excludes parked domains and one-page template sites and is therefore a better barometer of growth for a hosting business. Go Daddy had just 21K active sites when it launched its push into shared hosting in August 2003 with plans priced at $3.95 per month.

Go Daddy's growth in hostnames has been even more dramatic, doubling from 1.5 million in November 2003 to more than 3 million this month, a reflection of its success as a domain registrar.

Netcraft's Hosting Provider Switching Analysis identifies movements of sites from one hosting provider to another on a monthly basis. Please contact us for further details.