New 1&1 Hosting Packages Start at $2.99 a Month

Major hosting companies continue to slash prices for hosting accounts and domain names in an effort to attract small businesses launching new web sites.

1&1, the world's largest hosting company, has introduced Beginner Accounts for both Linux and Microsoft servers. The accounts are just $2.99 a month, and include a domain name, 1 gigabyte of web space, 2 gigabytes of email storage, 50 gigabytes of monthly transfer, 150 email accounts and a MySQL database. The account specs, which would have seemed extraordinary several years ago, are consistent with an industry trend in which providers compete on disk space and bandwidth, rather than price. By offering features consistent with a standard plan in an economy offering, 1&1 seems intent on doing both.

"These aren’t publicity stunts or marketing ploys, these are now our standard products and prices,” said 1&1 Chairman Andreas Gauger. “We are in a position of strength in the industry, and that allows us to offer packages with all of these features at a very low cost and still be profitable. As the world’s largest Web host, it is one of the many advantages customers receive when they choose us."

1&1 isn't alone in using low prices to get the attention of customers. Yahoo Small Business, another major player in the small business hosting market, has begun offering some prospects promotional pricing of $2.99 per year for domain registration. That represents Yahoo's most aggressive discounting yet, besting the $4.98 price offered earlier this year.