The U.S. unit of 1&1 Internet has beefed up its domain registration packages in a bid to compete head-to-head with Go Daddy and Yahoo for U.S. business customers, the company said today. 1&1's new plan is stilll priced at $5.99 for a one-year .com registration, but will now include private domain registration, a feature that is a paid add-on at other providers. The enhanced plans also include a 1 gigabyte e-mail account and a web starter page at no additional cost.

The moves by 1&1 will intensify the pitched battle to attract U.S. small business customers launching web sites. 1&1, which is based in Germany and hosts more than 5 million hostnames, says the new bundle will become its standard domain package, and is not a limited-time promotion. The move further blurs any remaining distinctions between hosting providers and domain registrars, as providers in both sectors diversify and use discounts and freebies to acquire customers. Private registrations could be the next battleground in the discount war.

Private domains - also known as proxy registrations - keep the registrant's contact information from being listed in the WHOIS database. The domain is registered in the name of the registrar, rather than the actual domain user. Among the market leaders is Go Daddy, which currently charges $8.95 for a private registration.

"We want to change the domain registration market the way we changed the Web hosting market - with competitive pricing and inclusive packages," said 1&1 Chairman Andreas Gauger. "We’re offering a lot of things that most other companies charge extra for, because we firmly believe in providing the most value for the money."

1&1 is leaving no doubts about who it sees as its major competition. "1&1 will draw direct comparisons to its biggest competitors — Go Daddy and Yahoo! — in advertising and marketing campaigns supporting the new features and unchanged pricing," the company said. Print ads will feature a chart with a side-by-side comparison of the three providers.

Last week Go Daddy began offering free e-mail accounts with every domain name purchase, while Yahoo Small Business redesigned its e-commerce hosting to allow more customization for merchant hosting clients.