Google has just released a domain registration service along with its Google Apps for Your Domain. Blogger (which is owned by Google) also released custom domain feature. The combination of this might threatens the life of small sized web hosting companies.
A lot of space
Google Apps For Your Domain (GAFYD) is a collection of services for your domain, which includes Google hosted email, Calendar, chat, customized start page, and Google Page Creator. GAFYD (like most Google services) is still in beta and still free. The best thing (or maybe worst if you concern about your privacy) about GAFYD is that it doesn’t take space or bandwidth at all in your current web hosting.
In this beta version you will get 2 GB email storage for each account in your domain. For my domain, the limit is 25 accounts, but for some other domain that I know of, the limit is more. The space will not grow like the ordinary gmail account.
You will also get 250 MB Google Hosted Space, so you can put your web pages, images, or your big files there. Google is using CNAME redirection at the DNS level, so when you access mail.yourdomain.com, Google will handle those request using their bandwidth resources.
.. at the cost of a domain name
For the past months, the Google policy is BYOD (Bring Your Own Domain). That means you must already have a domain from a registrar before you can apply for GAFYD, and it is at Google discretion whether it will give you a free GAFYD accounts. Last week Google announced that you can now buy a domain name trough Google (in cooperation with godaddy.com) and Google will give you a free GAFYD with your domain.
Everybody knows what Blogger is, so I won’t explained it. What you might not know is that blogger supports custom domain, with the content being hosted by Google. Before this, you must have a domain name and a hosting, now you only need to have domain name.
That means with only $10/year you can get: large mailbox, a blog, free web space with unlimited bandwidth, a calendar and chat service, and a start page. This is a lot more than a small hosting company could offer. I think Google is just a few steps away from killing most small web hosting companies. Most people only want to have a domain name for their blog and email. Most people that I know of only uses their domain name for blog and email.
One more thing: if they also include the Picasa Web Album with custom domain then it will be just perfect.
Programmers and professional users would still prefer to host their sites on a hosting company that lets them use scripting languages. Professional would also prefer hosting that allows them to upload files though FTP (or SSH), and lets them fully control their domain.
Big hosting companies already gives a very competitive price, for example hostmonster gives you 200 GB of space with 2000 GB data transfer with only $5.95/month, Lypha gives you about 250 GB of space and 6 TB data transfer for $6.95/month and both gives you the ability to host multiple domains. Both hosting also gives you FTP and SSH access, a lot of MySQL and PostgresSQL database, and scripting languages support (PHP, Perl, Python, and hostmonster even provides Ruby on Rails).
Is there any hope for small hosting companies? I don’t know, but their chance of surviving are getting slimmer.