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Folks are working some of these niches already:

http://www.domainsforyourbaby.com/

Be careful mentioning unregistered domain names. That's how Conan O'Brien wound up with HornyManatee.com:

http://www.iht.com/articles/2006/12/12/yourmoney/manatee.php

And more folks should attack more of these niches!! The problem with web hosting is, the average man on the street doesn't see its relevance. Does he want to "build a website"? No! But does he want to document his daughter's childhood and archive his great grandfather's life? Now he might start to see the potential.

So it's web hosting providers' responsibility to help identify all the dotcom moments that people can and should be registering domains and buying web hosting for. Dotcom moments aren't about bandwidth and disk space - those details come after you've convinced end users that they've got stuff to put online. Just as a real estate agent would never ply you with detailed lists of building materials at an open house, a web host's first attempt at making a good impression shouldn't be limited to "2500 email accounts and 100 MySQL databases".

I might be a little behind the curve, as usual, but is it a foregone conclusion that there is even such a thing as functional hosting?

To me sites like Photobucket, YouTube and LiveJournal are software applications, where content storage is just one of the features. These sites don't live and die by their hosting abilities, but the ingenuity of their software developers.

What does that have to do with hosting?

Hi Misha,

I think YouTube, Live Journal, etc do live and die by their hosting abilities. Their popularity is very much contingent upon their consistent success in keeping users' content online. Even Google is totally dependent on fast, reliable hosting infrastructure. Marissa Mayer said during her Web 2.0 Summit presentation that a 0.5 second content serving delay leads to a 20% decrease in number of pageviews. But anyway, back to your point...

In my mind, "hosting" means giving customers bandwidth and storage space for putting stuff online. So Rackspace falls under this broad category, as do The Planet and GoDaddy. Even LinkedIn and Facebook and Salesforce.com count, because they do provide online repositories for their users' content.

In Rackspace's case, software is a relatively insignificant part of the service. With GoDaddy, software (such as its site builder, blogging platform and new photo filer) starts to play a more important role. At the other end of the spectrum are "functional hosting" providers, whose primary value proposition is software. Their applications just happen to put your data online. Hosting is now waaay in the background, but it's still there, and it still matters.

I absolutely agree with the importance of situational hosting. Especially residential customers don't see the relevance of traditional web hosting and they have no idea what megabytes, traffic and POP3 accounts are.
It is important to change the communication and focus on the customers' needs which are showing the dotcom moments online, building web sites based on events and sharing the information with friends.
However for a web host there is more to it than changing your advertisments and simply offering the idea of new domain names to cover these events. The problem is that most of these users don't know how to create web sites, they have no understanding of HTML and they are far from installing CMS applications on their
own. Which means as a web host you have to offer the appropriate tools together with situational hosting in order to be successful.
Godaddy has already taken a step into the right direction with their personal solutions (https://www.godaddy. com/gdshop/personal_solutions.asp). However
their site building solution is not really supporting the idea of creating an event-based web site.
Site building tools should go further and directly offer all that is needed to create your personal dotcom moments online. And this includes that the whole application is focused towards the event-based character of the web site. This is way more than offering users the ability to create simply websites.

A key question is whether functional and situational hosters fulfill one specific need for a customer, or can successfully expand upon a relationship that begins with a need for photo sharing or the birth of a child. How segmented and specialized does the market become? I think a lot of potential "web hosting" customers are getting comfortable with having their stuff spread across a number of services. Some aggregators are trying to tie all these together in a start page.

Most businesses are more focused on having a coherent site that brings all their stuff together under a branded domain name, and typically don't want ads on their sites. That's why many businesses are still struggling with the best way to use social media, and also keeps the window of opportunity open for web hosting providers seeking to offer one-stop shopping. But not forever.

Daniel - From a technology perspective, GoDaddy already has a wide variety of situational hosting building blocks. Customers can upload photos, organize files, set up blogs, host podcasts... Now they just need to integrate these components. For instance, you should be able to embed GoDaddy-hosted photos/podcasts/file folders on your website. A much bigger challenge for the company is marketing.

Rich - If you find a highly salient niche, you may not need to expand the relationship. Look at YouTube - they only host videos, but that was enough for a $1.65 billion buyout. So I agree that increasing segmentation/specialization will drive the need for "start pages" (such as Demand Media's ChannelMe.TV). This is especially the case as more and more businesses find their way through social media: Dell sells real-world computers in Second Life, Burger King has 100K+ friends on MySpace, Sun uses YouTube to distribute product videos... It's all about going where the customers are.

So maybe Richard Rosenblatt rather than Bob Parsons will be the king of situational hosting. Richard understands why people want a web presence: to draw attention to themselves, their company, their products, etc. They're paying for a platform so they can be the star. Based on GoDaddy's marketing approach, I don't feel like that's something they've figured out just yet.

hosting means giving customers bandwidth and storage space for putting stuff online. So Rackspace falls under this broad category, as do The Planet and GoDaddy. Even LinkedIn and Facebook and Salesforce.com count, because they do provide online repositories for their users' content.

nice