How Do Web Hosts Make Money?

Description: Many web hosts offer an outstanding level of service for very little money. When they offer so much for so little - sometimes not charging anything at all - how do they stay in profit? Read on to find out.

The way web hosts make money largely depends on whether or not they charge you for the hosting they provide.

There are several web hosts on the internet that give away free website and host them for free as well. While this may seem like a bad business decision it's actually a great way to get free advertising for the other services they offer. Every free website has to have a banner or advert on it that promotes the web host - most often the fact that they give away free sites, or occasionally the other services they offer for a fee.

The idea is that some people are bound to take them up on one of their paid services; and indeed the web host will take their ads off a free site as well? so long as you pay a small fee for the privilege. Some web hosts also put Google Adsense ads or similar on free sites, which limits the number of things that the webmaster can do with it.

As for those web hosts that charge for their services, the process itself is easy to understand. What they essentially do is to pay for the bandwidth provided to them by their own supplier and pass that onto their customers for a monthly charge.

This generally has very small profit margins, and the web hosts relies on large numbers of people taking them up on their offer to make a profit. The monies they receive from their shared hosting services are naturally quite low; the web hosts who are making the highest profits are undoubtedly the ones who have their own hardware on which to host websites. It's very much a case of speculating to accumulate.

Furthermore a lot of people tend to buy larger packages than they really need, with the intention of growing into them. This fact ensures that most web hosts are paid for more than they actually provide.

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