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Recent posts by Isabel:

Web Hosting SEO Expert Shifts Gear, Becomes Social Media Evangelist

These Numbers Make Me Dizzy

GoDaddy Launches Discount Domain Club; Who's the Target Audience?

The Complex Hosting Revolution

Andreas' Secret (and Graham's Too)

I don't know if you've been following the Google self-sponsorship controversy?

1. Earlier this month, CentralDesktop CEO Isaac Garcia pointed out that Google holds the top ad slot for "spreadsheet", "calendar", "email", "blog" and bunches of other search terms. In addition to occupying premium ad positions, Google products often dominate top search results as well. (Google responded that their product teams compete fairly and squarely with the rest of us for placement.)

2. Last week, Philipp Lenssen posted a couple of screen shots showing that Google is pimping Blogger and Google Calendar via graphical tips on top of search results.

I'll bet sooner rather than later, searches for "web hosting" will bring up ads/tips/listings for Google Domains and Google Apps. In addition, Yahoo! and Microsoft might jump on the bandwagon and start using their search engines to promote Yahoo! Web Hosting and Office Live. Even Wikipedia founder Jimmy Wales' new social search project has a free hosting twin. (I'm not saying there will be a connection between the two initiatives, but there's certainly the potential?)

That's unfair, you say? Too bad. Their search traffic is theirs to monetize.

But you spent $100,000 last month on keyword ads? Of course you're a highly valued advertiser! On the other hand, Mary Meeker from Morgan Stanley says (PDF) that within 5 years, Google and Yahoo! could generate as much as $30 worth of revenue from each user. So in the grand scheme of things, holding on to your ad dollars might be less important than building their own user base.

You're not scared because you've got better customer service? Great! Ask your tech support department for a list of customers who've never opened a ticket. If these folks - who've never come in contact with your wonderfully personable reps - took off for Google's free offers, you'd be left with a truly appreciative group of customers who'd help maintain a steady ticket volume - at a third of the recurring revenue.

The bottom line is, if your business model is dependent on SEO or PPC traffic, you're sunk. And if your product consists primarily of bandwidth and disk space, that's not enough. Because web hosting is not about selling these cheaper-by-day commodities - while hoping to grow your revenue. It's about convincing consumers and businesses to extend your platform and populate your ecosystem. If you succeed in building the kind of community that MySpace has, Google will be spending $900 million to advertise with you - not vice versa.