Internal Combustion Web Hosting Model
- By Tom Millitzer on December 11, 2007
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FacebookHostedToday recently announced it had acquired TheGreatHostingCompany. I tracked down HostedToday owner Rodney Ringler, or was it the owner of RoundBerry? Or the person who owns HostChart.com? All the same Mr. Ringler. He is an unabashed self promoter, nothing wrong with that.Rodney confirmed one of my hosting theories, the internal combustion model. He has several brands, all competing with each other, all about the same price point, all answered by the same customer service staff. Sounds synergistic.Combined Ringler’s four hosting brands serve about 10,000 accounts, the recent acquisition of TheGreatHosting Company added about 200 accounts. But it was for a friend and it got him a press release.With internal combustion you spread your bets with several brands, if a potential customer does not like brand "A" maybe they will like brand "B". Same type servers, same data center, same staff but different skins. Many web host firms do this.As I have told other hosting firms, he should add some high-octane to the mix. Why have your top price at $24.95 as the RoundBerry shared Corporate… when your new brand “OpiumHost” (I made that up) can have basic corporate “red line” hosting for $49.95 – and expanded shared hosting plans up to $185.00. Many buyers like to pay more, it is obviously better. Same type servers, same data center, same staff but different skin. Yes much higher margins.Not only do you make more money, when you go to sell your conglomerate you have pushed up your average rate. Higher average rates will command a higher price and make your firm easier to sell.========== MORE ABOUT TOM ==========
Tom Millitzer provides merger and acquisition services to Internet service firms including Web Hosting, Data Centers and similar sectors. In 1994 he founded and is President of NCC - New Commerce Communications, Inc. He has been involved in almost 200 mergers and acquisitions , finance an... (Read full bio)
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Comment by Anonymous on Wednesday, December 12, 2007
great post.thats some food for thought. also a little marketing 101.
window dressing can go a long way. what seperates coke from supermarket generics? advertising and marketing.
why do people choose godaddy? price - and advertising. who else is advertising in the superbowl.
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