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MySpace Wins $230M Spam Ruling
Wed, 14 May 2008 00:00:00 EST
May 14, 2008 -- ( <http://www.thewhir.com> WEB HOST INDUSTRY REVIEW) -- Social networking giant MySpace was awarded $230 million in a ruling against several notorious spammers Monday.
Why you and Low Fat Lattes are Google's Worst Nightmare
Wed, 14 May 2008 11:55:00 -0500
Today’s keynote speaker at ISPCON was Elliot Noss of Tucows. His keynote addressed how Internet Infrastructure companies can compete with the likes of Google and Go daddy. His answer: more customization and real personalization. He used McDonalds to represent Google and Go daddy, and Starbucks as an example of customization and personalization. In his presentation Rackspace is the Starbucks of the Internet world. In his opinion Rackspace succeeds not because it is the cheapest, but because it provides a much more stable experience than most infrastructure providers. Examples of this include robust mail service with large storage space.
As a frequent conference attendee, I hear this keynote often. In other conferences the keynote has been entitled, alternately, “How to compete with 1and1 and Microsoft,” “Withstanding the entry of the giants,” and so on, and so forth. Depending on the audience, the theme always seems to be “specialization and customization”
I wonder, honestly, how specialized and customized companies can get and still make money. Early on in my practice, one of my clients had the idea of creating different brands for different segments of the hosting market. The CEO called this the “supermarket” strategy: he wanted to own the most shelf space in the hosting market. Consequently the company had over 10 brands, each with a different message, back end, support needs, etc. Needless to say, this level of specialization became uneconomical over the long term, and we ended up folding all the brands into two major brands.
Similarly, another client sought to compete in various segments of the market. So he targeted lawyers, doctors and chambers of commerce. This specialization required an enormous amount of sales time, and very expensive marketing (getting a lawyer’s attention isn’t cheap). This marketing effort worked, but the customer market was so specialized, and the product not scalable to other markets, it was eventually folded into a standard “unlimited bandwidth, storage, 10 GB e-mail” plan, with resulting churn.
What Elliot talked about, that strikes me as true, based on those of my clients who are successful, is that successful Internet businesses are high touch, and that people will pay to have their problems go away. Examples of this, and hosting companies that are taking business from 1 and 1, etc., include those that focus on customer support, implementing complex outsourced solutions like exchange, and hold the hand of overburdened IT departments.
In each of these examples the customization and specialization is applicable across the entire product line, and is not feature based. So instead of creating an e-mail solution that meets the unique needs of lawyers, they have support that teaches the lawyers how to create the e-mail product they need.
I see an analogy in my own business: clients pay me to make problems go away. They’re not interested in the most recent regulatory pronouncement about green marketing from the Federal Trade Commission, they just want to be able to market their new “green” data center. Similarly, the nuanced thread that has run through all these keynotes, whatever their title, has been that customers will pay you to make problems go away. Seems to me that’s a great way to succeed.
How do Regular People get Caught? How Can We Avoid It?
Fun Fact: Google's Revenue is $17,066 Per Server
Mon, 19 Mar 2007 19:52:00 -0400
I read about this on Bert Amijo's blog. 3Tera CEO Vlad Miloushev did the math:
1. Google's infrastructure consists of 500,000 to 1 million servers.
2. Google's Q4, 2006 revenue was $3.2 billion. On an annualized basis, that's $12.8 billion.
If you divide #2 by #1, you'd get $12,800 to $25,600 of revenue per server. If you take the average and divide the amount by 12, you'd end up with $1,422/month in sales for each server. Google spends about 10% of its revenue on operations, which equals $142 per server.
As a point of reference, let's consider HostGator's announcement that it will expand its presence at The Planet. HostGator currently leases 1,700 servers, which are home to 500,000 websites. That's 294 sites per server. If HostGator collected as little as $4.84 from each site owner, it'd generate more revenue per server than Google!
HostGator's cheapest service plan costs $6.95/month, but it allows customers paying $9.95 or more to host multiple sites. Which most - including HostGator's 10,000 resellers - do. So Brent doesn't have Larry and Sergey beat. Yet. But while I was doing the calculations above, I remembered a conversation with Lenkov from SiteKreator. Thanks to some kind of caching magic (which ISP-Planet discusses in this article), Lenkov's software can support up to 30,000 simple websites on a two CPU machine.
Let's say Brent springs for a quad core Clovertown from The Planet, hosts only 15,000 websites, and charges each site owner $1/month. This would put him ahead of Google in terms of both revenue/hosting expense ratio, and sales per server.
ISP-Planet says SiteKreator can be licensed for an "unpublished fee". I'll have to ask Lenkov about that...
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