Web Hosting by Google?
Gary Price points to a new Google domain (”Googlehostedservices.com”) and speculates about whether Google will become a webhosting company. He also points to “Google Apps for Your Domain” as further evidence of this possibility.
(This is the point in the post where the analyst says: “See how smart I am, I said something like this before.” I always find that a pompous thing to do, but now I’m gonna do it myself.)
For slightly different reasons, in June of last year I argued that Google ought to acquire a small business website hosting company. My argument was mostly about the sales channel that it would acquire (sort of a smaller-scale version of what the company just did with Intuit). But it makes sense to me on several levels. Yahoo! is the largest small business webhost. Microsoft also offers hosting services for small businesses.
Many of the articles that discussed the Intuit relationship said that Google would host landing pages for SMEs that didn’t have sites (a number that is elusive but probably in the range of 6-8 million overall; it’s unclear how many Intuit customers don’t have sites).
Right now, Google offers an informal webhosting product in Page Creator. Among the free site tools, it’s very good but you don’t get your own domain and the look and feel is very simple. (Smart SMEs can redirect their domains to this and voila: a free site with your own URL).
Google could buy Web.com, for example. The company’s market cap. is $66 million and it has struggled as mainstream webhosting has become something of a commodity. In early 2005 the company was estimated to have something approaching 200,000 hosting customers. (I searched through the most recent 10Q but couldn’t find an updated figure.) Regardless, there are other such companies out there that Google could acquire.
While there would be revenue, the primary value would be the customer base and the channel, now and for the future.
(Along those same lines, Google, Microsoft or Yahoo! could acquire a ReachLocal or WebVisible and run them as independent divisions.)
Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.