Yahoo, iPowerWeb Slash Domain Prices to Below $3

Web hosting provider iPowerWeb has slashed its domain name pricing to $2.95 a year, following the lead of Yahoo, which is offering limited-time domain pricing of $2.99 a year. iPowerWeb's promotional offer undercuts the lowest prices seen among current market leaders, and is a sign that Yahoo's continuing promotions are pressuring competitors to respond, planting the seeds for further domain price cutting.

Netfirms ($4.95 a year) and 1&1 Internet ($5.99 a year) are currently offering the lowest non-promotional pricing on domain names, which are viewed as an important "gateway" purchase by small business customers who are likely to be shopping for web hosting and e-commerce services as well. Yahoo has been particularly aggressive in using domain pricing to attract new users, with "permanent" pricing of $9.98 supplemented by limited-time offers of $4.98 and now $2.99 a year.

Numerous providers are now offering free domain names to customers who purchase web hosting plans, while Go Daddy is offering names for $1.99 with every non-domain product (including email and SSL certificates in addition to hosting) and 1&1 is offering private domain registrations at no cost.

Several large providers have also dramatically increased their allowances for disk space and data transfer in recent weeks, prompting a critical press release from a competitor alleging that the mega-specs are confusing to customers.