Free Domain Forever (Sort of)

After reading Rich Miller's Netcraft article on the sky-high referral fees that web hosting providers pay for new customers, I decided to look around Commission Junction to get more specific details. I learned two things:

1. I live a sheltered life as a GoDaddy customer. I've been paying for my $3.99 economy plan on a month-to-month basis. This is no longer an option at many other web hosting companies, who require 12-month pre-payment upon signup. It seems like a lot to ask of a new customer. On the other hand, when you're paying the following referral fees, near-term churn is something you just can't afford:

HostGator: $100 for $6.95 account. Minimum 1 year prepayment
ANHosting: $100 for $6.95 account. Minimum 1 year prepayment
BlueHost: $90 for $7.95 account. Minimum 1 year prepayment
iPowerweb: $100 for $9.95 account. Minimum 3 month prepayment
LunarPages: $80 for $9.95 account. Minimum 3 month prepayment

2. Web hosting accounts within the same price range vary widely in terms of capacity:

HostGator: 3.5 GB storage, 50 GB bandwidth
ANHosting: 17 GB storage, 500 GB bandwidth
BlueHost: 15 GB storage, 400 GB of bandwidth
iPowerweb: 10GB storage, 250 GB bandwidth
LunarPages: 5GB storage, 400 GB bandwidth

Could the co-existence of all of these offers on a single page mean that  storage space and bandwidth limits aren't key differentiating factors?

I was also intrigued by the prevalence of "free domain name for life/forever" promotions (available from BlueHost, LunarPages and ANHosting). Alas, what they meant was free domain name for as long as the customer maintains an account. Which isn't quite the same as forever.

Comments

[ScottY]

It surely has reminded me a post at DreamHost blog a while ago.

http://blog.dreamhost.com/2006/05/04/web-hostings-dirty-laundry/

There are simply way too many those "top hosting review" sites that recommend not the hosting companies that give the best service, but the ones that pay the affiliates the most.

[RichM]

Hi Isabel! Here's an interesting development on this topic: Yahoo Small Business, which was one of the first providers to offer $100 referral fees through CJ, has now reduced its CJ referral fee and slashed its domain price to $1.99. Given the affiliate "bounty" inflation, it looks like they've opted to go back to the cheap domain as primary customer magnet.

[NullMind]

Hi Isabel

On the domains, yes you are correct, it's free domain for the life of the account, unfortunately people dont always make it that clear, they "assume" you know thats what they mean, or burry the disclaimer somewhere.

And it makes sense, with domain profit margins being so low, it's better to just give it for free, especially if it shifts the balance between the customer signing up or not.

The unfortunate thing about referral fees is as the poster 1 here says, the hosting review sites nowadays will refer, interview, spotlight, etc .. those hosts who pay the most, it's not about quality of service or unbiased opinions, it's about making money and sending customers sometimes to a horrible experience that makes many loose faith in the industry.

And sorry to hear you host with GoDaddy, you have my sympathies.

[Isabel Wang]

Hey Rich- I did see that Yahoo! dropped its referral fee to $60; it's $8.95 hosting plan is available on a month-to-month basis. GoDaddy, BTW, offers $1.99 domains as well (and .info domains are free). It pays $105 for a 12-month signup of its $6.29 Deluxe Hosting plan - but nothing for shorter term referrals.