A few months ago, in response to Trinity Ventures' $10.5 million investment in Photobucket, Tier 1 Research wrote that "the growth in functional hosting represents a growing threat to shared hosting providers."
Photobucket has grown rapidly since then. It had 15 million users back in May but recently passed the 30 million mark. Other functional hosting services - such as YouTube, MySpace, LinkedIn - have also enjoyed unheard of momentum (and valuations!) in traditional web hosting. In contrast, GoDaddy is just now entering the photo hosting market. I'm sorry to say that I don't think its Online Photo Filer will *ever* reach 30 million users. It offers too little, too late.
Instead of chasing after functional hosting coattails, maybe Bob Parsons should position himself as the king of "situational hosting"? As his ads put it, life is full of dotcom moments. For instance:
JohnAndMaryAreGettingHitched.com
As a newly engaged couple, there's nothing you need more than a web hosting account! Set up a forum where your bridesmaids can gripe about your dress selection! Install Pligg and let your friends vote on who deserves to be invited to the wedding!
BabyJane26Dec2006.com
Yay! She's finally here! Now sign her up for a domain name, put a "donate to college fund" button next to the cute pics, and email the URL to all of your relatives!
RIPSteveSmith.com
Great grandpa's lived a good life; now doesn't he deserve an online memorial? Create a central repository where everyone within the extended family can upload old letters and photos. It's part of your personal history, don't let it disappear!
You get the idea: it's up to web hosts to make web hosting a relevant part of every milestone (KimIsAKindergartenGrad.com), every product purchase (FredHasAFastNewCar.com), every trip people take (AndysAwesomeAustralianAdventure.com)... Because there's an endless array of dotcom moments that can be leveraged to reach highly targeted audiences of super eager buyers. The trick is to focus on *customers* as stars in their dotcom-worthy experiences - not French Maids, not Candice Michelle and not Danica Patrick.
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/m...
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".
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?
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.
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.
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.
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.