Web Hosting: It’s a Giant Scam!


Web hosting looks like a giant scam.  Normally this site isn’t about building blogs – Mr Tako Escapes just happens to be about personal finance, financial independence, and early retirement.  I know, I know, I’m a little off-topic!  But it’s money related, you’ll see!

This blog was started at the end of November 2015 when I finally decided to call it quits from the 9-to-5 job and be “early retired”.   Setting up www.mrtakoescapes.com, I did TONS of research to find the best web host for my site.  I spent almost a month doing research.

Turns out, I learned a few things.

 

Web Hosting What?

So you want to start a blog?  You’ll need a web host.  Web hosting, is a essential service for any blog.  The hosting company maintains a web server with a (hopefully) fast internet connection.  That server is ‘on’ 24/7 responding to webpage requests.  Most individuals don’t do their own hosting, and instead rely on a hosting company.  Unfortunately this industry isn’t exactly what you would call transparent.  Let’s take a look at all the wonderful tricks hosting companies are using to squeeze money out of the blogging industry.

 

Not actually different choices: Endurance International Group

While researching web hosting companies for Mr. Tako Escapes, a few names kept coming up over and over again.  Those hosting companies must be the best, right?  Right?!  RIGHT?!?!  No.  Turns out, bigger is not better in the web hosting industry.  According to the best user reviews I could find, it’s quite the opposite situation: the largest hosting companies tend to provide the worst service.  

Many blogs and small websites seem to recommend Bluehost or HostGator.  Or, a handful of other large hosting companies.  All the ‘best web hosting’ review websites point you toward the same handful of companies.  Fees seem low for all of them, and they appear to be easy to start.  Hey, that’s all good.  Right?  So which is the best?  Turns out the options that you think you have, aren’t really options at all.  Most of the major names in web hosting are all owned by one company:  Endurance International Group 

Endurance International Group (EIG) owns over 70 web hosting brands, including BlueHost, HostGator, iPage, FatCow, Domain.com, IPower, A Small Orange, etc.  Wow.  Just Wow!  There’s nothing wrong with owning a bunch of brands, but it’s a lot less transparent than it should be.  This company grows by acquiring new brands continuously to stay on top of the ‘Best of’ and ‘Top 5’ lists out there on the internet.  Don’t believe me?  It’s a public company, feel free to check it out for yourself.

 

Affiliate Programs

I kept doing my research, and dug a little deeper.  I actually used network tools, to determine who actually hosted different blogs.  Turns out, some blogs who shill for Endurance International don’t actually host with them.  Suspicious.  Very suspicious.  So why does every blog, and youtube video about blogging seem to recommend one of just a handful of companies?  They pay the highest affiliate commissions around.    

Don’t believe me?  Let’s take a look at the affiliate programs* of some of the biggest hosting companies around:

Now we’ll look at the smaller, poorer, hosting companies you probably never heard of:

I could go on and on.  One thing seems very clear:  If you want to get paid lots, then shill for the big web hosting companies….even if you don’t want to host with them.  

Pat Flynn over at the Smart Passive Income openly admits he does this.  Pat signs people up for hosting with BlueHost, but doesn’t host with them himself.  In his most recent income report, Pat reveals he made over $40,000 last month shilling for Blue Host.  Props for honesty Pat.  Wow!

* For comparison purposes we’re only looking at the most basic shared hosting packages that a common blogger might use.

 

It’s a Slimy Industry

After doing my research, I can’t believe how slimy the industry is.  It’s filled with gimmicks and tricks everywhere.  Here are the most common tricks I encountered in my research:

Trick 1:  Affiliates Everywhere

Every website, every review site, every youtube video that mentions a hosting company – it’s all affiliate links.  Whoever setup that review site is getting a kick-back.  Nobody is unbiased!  Every last one of them I could find is using an affiliate link.  Even big review sites like PC Magazine are not immune from this sleazy behavior.  Journalism these days….but I digress.

Trick 2: Promo Codes  

Every web hosting company has some kind of promotional coupon code.  That’s great, low prices are good, right?  It’s a bait and switch situation.  They start you out at a very low price to get your credit card in their slippery hands – then jack up the price when your renewal comes around.  Honestly, do people really think powering those servers  24/7 only costs $4/month?  I can’t even buy lunch for $4.

Mr.Tako

Let the buyer beware. Or, at least AWARE.

Trick 3:  Shared hosting

Most bloggers don’t need separate servers for their teeny tiny blogs that get 10 views a day.  Enter shared hosting.  The hosting company can put thousands of sites on one server, and overload it to save costs.  When a server gets loaded down by web requests, everyone on that server suffers the same slow response time.  You get what you pay for, and $4/month isn’t much.

Trick 4:  Annual Signups

These super low initial offer coupons require you to signup for a year.  A WHOLE YEAR stuck with a company.  If you decide to switch hosts (for whatever reason), good luck getting your money back.

Trick 5:  Poor support

With anything highly technical, there’s bound to be problems.  The world is also filled with hackers and spammers.  Inevitably, as a new blogger you will need support one day.  How much support do you think you’ll get for $4/month.  Many hosting companies only provide email support at these tiers of service, and it’s terrible.  Read reviews of their support over at Web Hosting Talk if you don’t believe me.  It’s sad!

Trick 6: Unlimited Everything

Once I dug further into reviews of hosts, I noticed that the claims of ‘unlimited’ this or ‘unlimited’ that were not unlimited.  Again, the bait and the switch.  Most of the major ‘unlimited’ hosts have limits, stashed away in lengthy terms of service contracts.  Do your due diligence when shopping for hosts.

Trick 7: All the other stuff

For every web hosting company researched, they had some kind of trick or gimmick.  It’s like visiting a tourist resort in a tropical country for the first time.  Everybody wants your money!  I can’t even be certain that my own hosting company, Squidix, hasn’t got something up their sleeve (more on this later).  Again, check Web Hosting Talk first.  Can’t recommend that forum enough.

Web hosting:  Tropical paradise or giant scam?
Web hosting: Tropical paradise or giant scam?

Why I chose Squidix

As a financially independent individual, I care about every dollar spent.  I want those dollars deployed in the most efficient way possible.  After weeks of research, I finally settled on Squidix as my hosting provider for this website.  They are a tiny hosting company compared to the big boys, but here’s why I ended up going that way:

  • Best service for the cost. I did not pick the host with the largest affiliate commissions.  Some of the smallest affiliate commissions actually.  I picked a host that I though would provide the best service for the cost.  Here’s my affiliate link: Squidix Web Hosting.  It would be tako-rific if someone actually clicked on the link and signed up, but I don’t expect it. 
  • Month-To-Month.  I went with a month-to-month plan.  If Squidix tries anything wonky or gives me bad service, I’m only out a month of hosting fees.
  • Speed.  They seemed very fast.  Performance of page loads and ping times were all pretty good.  Not the fastest I was able to find, but pretty good.
  • Customer Service.  Web Hosting Talk gave them decent customer reviews.  Customer service seemed good.  Those reviews could be fake, but I doubt it.
  • Recurring discount.  I was able to secure a recurring discount for the lifetime of my account.  So even if I stay month-to-month I end up paying the same low price.  I’m in this for the long term, and don’t really want to jump ship.  I want my sons to read this site and help them in their lives.  Mr. Tako Escapes needs to be around for a very long time.
  • Cephalopods are cool.  Squidix has their squid full-on!

 

Costs

Squidix ended up being cheap too.  Really cheap.  I’m almost scared how cheap it was to setup this blog: $9.73.  Yep, you read that right.  I setup this whole blog, including domain name (from NamedCheap: link) and hosting from Squidix for a total of 9 dollars and 73 cents.  That’s it.  I’m going to be cautious here and see how it goes.  Look for updates as this blog progresses.

“There’s a sucker born every minute” – Attributed to P. T. Barnum

12 thoughts on “Web Hosting: It’s a Giant Scam!

  • December 24, 2015 at 6:16 AM
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    I don’t think it’s a scam. I just think blogging about blogging to make money is not a very high-quality way to blog.

    I go the smallest server hosting possible actually and the service has been great, but I don’t have multiple multiple backups like the big guys.

    Sam

    Reply
    • December 25, 2015 at 1:44 AM
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      Hi Sam, great to get a comment from a more experienced person like yourself! Its good to know someone like yourself went small too.

      Most folks in the hosting industry are probably trying to be honest and fair, but they’re probably stuck with this model of ultra low starting costs with big upsell and high charges for anything out of the ordinary. From my reading of EIGs 10q’s and 10k’s they have an average revenue per user of over $14. That’s definitely much higher than the supposed $4 unlimited everything account. Something must be happening to push up the average that much.

      For me, it was super hard to find honest unbiased reviews and advice.

      Reply
  • December 30, 2015 at 9:02 AM
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    There is Sam. Leaving a trademark 1st comment on a potentially high-traffic producing page. I’ve always thought a nice move. Love, MF (not initials to a badword phrase).

    Mr. Tako, I much enjoy your new blog and am looking forward to reading more. I will subscribe when I find a link via mobile.

    In the past I used websynthesis because I used studiopress themes. Pricey but very happy with overall package. I was not aware many of the hosting co. were owned by one entity. Interesting.

    The co. you went with seems comparable. How much more to run on a dedicated server for speed issues? Also know that wp plugins can slow you down. Especially cache plugins. Best to you with blogging.

    Reply
    • December 31, 2015 at 3:53 AM
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      Thanks for the great tips Christine! You will find a subscription widget in the right sidebar, just below the Feeds widget.

      Squidix lists a dedicated server starts at $140 a month, although they seem to provide many different possible options for that dedicated server, some of which are significantly more. You may want to check out the following link: https://squidix.com/hosting/managed-dedicated-server/

      Reply
  • January 7, 2016 at 10:05 AM
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    I started my blog on a whim. Sat down, googled “how to start a blog?”, watched a few youtube vids, learned WordPress exists, and whammo. Hostgator seemed like a good choice at the time – cheap, able to lock in long term rates, unlimited everything, etc. So I went with them.

    I miss the super low intro rates but I think I renewed for 3 years for something like $150-180. I’m on a shared server, but haven’t noticed any real lag. Even with the occasional 30-60 simultaneous users (according to google analytics real time).

    Squidix looks decent. Looks like $10/mo long term for their cheapest shared package. Probably not a lot more than bluehost/hostgator.

    And I had to laugh at your discussion of affiliates. 🙂 I have a link on my page and I think it’s generated a whopping $200 over the past 2.5 years. I don’t really push it hard but hostgator works well enough for me.

    Reply
    • January 7, 2016 at 10:45 AM
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      Actually, Squidix is closer to $4/month for the cheapest package (long term). Apply the ‘WEBHOSTINGTALK’ coupon. That will lock in the 70% off low prices for the lifetime of the shared hosting account (supposedly). I’m a skeptical guy, so they have to prove it to me. If you ever decide to move, I would definitely appreciate that affiliate commission.

      Congrats on your $200 from host gator! I actually find that pretty impressive…don’t dismiss your success! Cash flow coming out is impressive!

      Reply
  • February 6, 2016 at 10:18 AM
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    Web hosts *are* a scam. We host our blog on Amazon’s S3. You can’t run WordPress, only serve static files, so we generate the blog with Jekyll. Static sites also aren’t subject to the security issues that periodically crop up with WordPress.

    Our hosting costs last month: $0.52, all of it for the domain name. Including the $6 up-front purchase, the domain will cost about $13/yr. We probably could have purchased the domain for a few dollars less, but it’s convenient to have it all at Amazon, and probably more reliable too. S3 is free for the first year (given the typical traffic a new blog would receive) and super cheap after that.

    Reply
  • October 24, 2016 at 6:56 PM
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    Thanks for an honest review, these prices look competitive. I was looking at setting up with Bluehost but might go with one of the smaller options! Much appreciated.

    Reply
  • February 21, 2017 at 1:53 PM
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    What are the features you use from your web host that are not available for free through wordpress? I know that the domain name isn’t included in wordpress. But I am not sure I understand why the other services are needed. Thank you for the information!

    Reply
  • March 18, 2017 at 9:10 AM
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    Thanks for the most honest discussion about web hosting. I laugh about all the people promoting Blue Host for the big affiliate commissions. 99% of the time they do not (or have never) used blue host. Anyone I know who has used blue host has quickly discovered the error and moved to a more reliable host, that has better support and infrastructure which you have to pay a little more for.

    Reply
    • May 28, 2017 at 4:56 PM
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      Hehe! I’m a little different. Being “real” and giving people the full story is kindo my MO. I care about that more than making a few extra bucks.

      Reply

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