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Isabel, to further your ad-based revenue model comments, I just got my eMarketer Daily newsletter that references a report from In-Stat about user-generated revenue, with the bulk of the revenue coming from, of course, advertising:

"A new report from In-Stat asserts that over the next several years user-generated content (UGC) will boost Website revenue, mainly from advertising. "
http://www.emarketer.com/Article.aspx?1004192

Two things. First of all, increases in traffic will force providers, big and small, to reassess overselling amounts and strategies. I have no problem with this. I think it will actually be good for the industry - not that overselling is necessarily a bad thing, but it will need to be tempered and done more conscientiously. But the root answer here lies as much with the developers as with the hosts. The savvy developer will win the day by using more efficient development practices. I've seen sites decrease in size by 90-95% and with no loss in quality whatsoever, because someone stepped in and reengineered things properly. We had a customer go up on Dig and Slashdot the same day they were featured in the Wall Street Journal, NY Times, Washington Post and 40 affiliate papers (there was a very focused marketing effort surrounding the launch), and the total transfer for the next seven days was less than 10 Gb.

When it comes to this question, I don't think the Web site creator and Web site hoster can be separated. Looking at the problem holistically, I don't think you want to separate the two, because the salvation of one rests in the hands of both.

That's a really interesting point, Paul! So maybe web hosts need to build up in-house design/development expertise - or forge partnerships with companies that have such skills. Instead of telling customers "you've used up too much bandwidth; here's your overage bill", maybe the message should be "we can help minimize bandwidth expenses without compromising your site's current look and feel"?

It is, in my humble opinion, always better to send a positive message than a negative one. While certainly such services come at a price, the degree to which traffic increases is the degree to which hosting costs may increase for the consumer, which as you've shown, can be quite significant. A little foresight goes a long way. That's just on the hosting technology side. This type of message also talks to the visitor, serving up content faster, and generally pushing out a site that is much better optimized for search engines and visitors with disabilities. Done right, it's a lovely and far reaching domino effect!