Online Marketing Lesson 11: Web Hosting Basics


When you type “” in your browser, it will send a request to a specific nameserver (a computer that is part of the Domain Name System, or DNS) asking what is the IP address of the web server that is hosting that website. This is a necessary step because computers don’t recognize domain names (e.g.,, only binary code (e.g., Once the browser knows the IP address, it will send a request to that web server asking for the page that you want to access.

Web hosting is the process of setting up and managing web servers, so that they can store web pages and send the information about those pages to the browser of Internet users. A web server is a computer with specific hardware settings, software that will enable it to understand the Internet protocols, permanent and high-speed connection.

There are several types of web hosting, and below we will cover the main ones.

Types of Web Hosting

Self hosting: It is possible though usually not recommended, for an individual to host his websites from his own computers on his house. Why? Because it takes some technical knowledge to configure a web server properly, and getting a reliable, fast and always-on Internet connection might be expensive depending on where you live. That being said, setting up a web server is neither expensive nor requires a super fast computer, contrary to what most people would assume. The main software behind most servers today is Apache, which is open source and free. On top of that, you would just need the software to handle the DNS, the email, and the FTP, which shouldn’t cost more than $200 combined. If you don’t have expertise with servers and networking, however, you would be better off by paying a professional company to host your sites.

Shared hosting: The most basic type of paid web hosting. Under a shared hosting scheme, you will pay to a company host your site, but it will be hosted on a server with many other sites, and they will all divide the server resources like disk space, RAM and CPU. The most expensive shared hosting solutions will have a couple hundred websites on each server. Cheaper services might pack up to 500 websites on each server. Obviously, the higher the number of sites per server, the less reliable the quality of the service for the users. Shared web hosting should be good enough to get your website started, though, as its cost is very accessible. Expect to pay anywhere from $4 monthly up to $15 monthly. We will discuss in the next lesson the factors that you need to take into consideration when picking a web hosting plan and company.

Reseller hosting: Some web hosting companies have reseller hosting plans available. This means that the customer becomes able to sell web hosting himself (in theory, he could become a web hosting company, too). If you are not planning to host websites for third parties or to make money with web hosting, though, you should not consider this option. Additionally, unless you know and trust the person who is offering you the web hosting service, it is a good idea to avoid resellers and rent directly from the big hosting companies.

Grid hosting: This type of web hosting requires a cluster of servers that work together to power a large number of websites. In theory, the cluster should be able to manage the resources of all the servers more efficiently, making it possible to handle traffic bursts and other network abnormalities. is one of the most famous companies offering this kind of service. Reviews from users that tried it, however, are not encouraging. Most of them reported that the service reliability was far below the promises.

Virtual Dedicated Server: Also called Virtual Private Server or VPS, is a hosting setup where each client will have shell access to the server (i.e. full control over the software and hosted websites), just like in a dedicated environment, but they will be sharing the resources of the server (e.g. disk space, RAM, and CPU) with other people. In simple words, VPS is the midway between shared hosting and a dedicated server. Costs start at around $20 monthly, although you should expect to pay more for a reliable solution. One important factor to look in VPS plans is the guaranteed RAM that you will get (you are looking for a minimum of 256).

Dedicated Server: When you rent a dedicated server, you will have the whole computer and its resources dedicated to your site or sites. The advantage of this solution, therefore, is the fact that it is more robust and secure, since no other user will have access to it. The downside is the price. Dedicated servers usually start at $150 monthly, and for a server with good specifications (i.e. large RAM, disk space and RAID) the price can go up to $300 monthly. Later in this lesson, we will discuss when you should consider renting a dedicated server.

Colocation web hosting: Similar to dedicated server hosting, but with colocation the client himself will own the hardware of the server while the hosting company will only provide the physical space, the electricity, and the Internet access. The server may or may not be managed by the hosting company. This type of web hosting is usually used by corporations and larger websites that need to sustain heavy loads of traffic, and hence that are subject to frequent hardware changes and upgrades.

Choosing A Web Hosting Type

We covered the most used types of web hosting because it is important for you to know all the possibilities around. Choosing a web hosting solution is easier than it looks, though. First of all you can exclude the self-hosting option. As we mentioned before, unless you have a good technical expertise with web servers, it would not be worth to spend your time there. Even if you are good with software and networks, hiring the services of a professional hosting company has many benefits attached to it, including the customer support and the possibility to have backups in two different physical locations (on the server of the hosting company, and on the computer in your house).

Shared hosting is the first option that you should consider to get started. It is not expensive, and provided that you pick a reliable company, it should host all your new sites without problems. Quality shared hosting, in fact, can sustain even high peaks of traffic that would result from a Digg front page, for example. You would obviously need to make sure that your website is optimized for load performance, but we will explain how to do this in future lessons.

The shared hosting should be enough until your sites start receiving a large amount of traffic. There is no magic number to know when it is time to upgrade to a dedicated server; you will need to figure it along the way. On some occasions, your sites will grow so much that the hosting company itself will contact you about it. On other occasions, you will start noticing an increased amount of downtimes or some server errors (e.g. 403s or 404s), and that could indicate that it is time to upgrade, too.

Another factor that you can consider is the amount of money that you are making online. As soon as you reach $1,000 monthly, it would be a good idea to consider renting a dedicated server. Spending $200 monthly on web hosting might sound a lot when $10 monthly is getting the job done, but the benefits that you would get out of it are worth the investment. On a shared hosting plan, for instance, you are inevitably subject to problems coming from the other users on your same server. If someone runs a script that ends up crashing the server, your sites with go down together.

Virtual Dedicated Servers (VPS) are on option if your site is too large to be hosted on a shared plan but you don’t have enough money to get a full dedicated server. Jumping straight from shared hosting to a dedicated server is a good idea, though, because every time you change your hosting type, especially if you need to change the company providing it, your sites will go down for a while and there is the risk that something might go wrong in the transition.

Shared vs. Dedicated IP Address

The last thing that you need to think about is whether you will want shared or dedicated IP addresses for your sites. Shared IP addresses are usually employed in shared hosting plans. Under this setup, all the websites on a specific server will share the same IP address, say Once a browser requests a page from a site inside that IP address, the server will check what domain is being requested, and it will serve the correct page.

The problem with shared IP address is that the action of other users on your own server might end up affecting you. Search engines and spam filters usually block or penalize websites based on their IP addresses, so if someone sharing your IP starts engaging in spamming or on other illegal activities, your sites could get banned or blacklisted as a result.

With a dedicated IP address, on the other hand, your site will be the only one on the Internet using that IP address. Apart from being safer, some webmasters defend that websites with dedicated IP addresses tend to perform slightly better on search engines too (although this has never been proven).

As you can see, having a dedicated IP address is the optimal solution, so why doesn’t everyone use it? Because it costs money, starting at $2 monthly. It is not that expensive, but adding it to dozens of websites could become a significant cost. A good strategy to adopt here is to use dedicated IP addresses for your most important sites, while leaving the smaller and experimental ones with shared IP. Suppose you have 10 mini websites that make money via AdSense, and one large content portal where you earn money via CPM advertising. You could get one dedicated IP address for your portal and leave the mini websites on shared IP.

On the next lesson we will focus on what factors you should keep in consideration when choosing a web hosting company.

Action Points

  1. Review the different types of web hosting that are available, and consider which one is more suitable for your needs.
  2. If you already have a hosting plan, contact the customer service of your company asking how much it would cost you to get a dedicated IP address to your main site. Evaluate whether this investment could be worth the money.
  3. If you haven’t purchased web hosting yet, wait until the next lesson when we will discuss all the factors that you need to take into consideration before choosing a hosting company.

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