Go Daddy

Did you watch the Super Bowl this year? How about the commercials? It's funny how so many people tune in to the Super Bowl just to watch the commercials. It's big business at 2.4 million for a 30 second clip.

Most of the commercials I've noticed are either beer or automobiles. But one commercial caught many people's attention this year. I'm talking about the raunchy GoDaddy.com commercial that poked fun of Janet Jackson's wardrobe mishap from the previous year.

This was reminiscent of the dotcom days of the late 90's. Could these crazy online companies be at it again spending big money and making no revenue? Hardly I believe.

GoDaddy is just one of many web hosting companies that registers your desired domain name (if available) and offers hosting services for a monthly subscription fee.

There are thousands and thousands of companies offering such services and the competition to gain customers is becoming fierce. Afterall, its an attractive business model with customers paying an on-going fee and relatively low running costs. Customer turnover is low because once a customer has parked his/her website to a hosting company, they feel it is troublesome to change. The competition is fierce to win over customers while it is still cheap to do so.

An analogy sometimes used is trench warfare. In trench warfare (most common in World War 1), armies on both sides would dig deep trenches to position their troops and try to move forward and gain ground towards each other in the midst of heavy gun fire and artillery. Once the trenches are dug and the positions are established, it becomes exponentially harder to gain ground. In a similar fashion, web hosting companies are seeing the growing competition and is trying to establish the best position now.

Beside GoDaddy there are many other strong web hosting companies that are fighting it out as this industry consolidates. Among them are Yahoo Domains, 1and1 and Network Solutions. Have you noticed Yahoo's strategic placement of Yahoo Domain Ads on their front page? This is a sure sign of how seriously Yahoo views this portion of their business.