From a marketing perspective, the web hosting market has been competitive for years, and the level of competitiveness does not get any lower. New companies find it harder to promote themselves when all major keywords and placements are sold out at high premiums. Larger marketing funds are required from startups to make "noise" when they hit the playground.

The market has to obviously balance things out and make the adjustment. So what do you think that adjustment will be? Do you think the ad keyword market will collapse at least to some degree when more companies learn to market locally or find more creative solutions?

Best,

As long as companies are willing to pay a premium, the prices are going to stay up. It's just like the oil prices. People are willing to pay, and so they remain higher than they should.

Anything new in terms of advertising (effective advertising), will be noticed immediately by the firms with deep pockets, and the prices will move up again.

From the words of old: Everything is worth what its purchaser will pay for it.

Today, that's the price of advertising.

Personally, I don't think we're witnessing a bubble. It would be one, if the levels would not be sustainable for those who pay the price, but AFAIK, they are sustainable. Companies still make a profit at the end of the day. There are companies that have been paying top dollar for advertising for years now. They know their business.

I think sooner or later the quality of hosting will have to improve and smaller companies will just not have the means to keep the same standards as companies that have invested heavily into their networks. Even in the telecoms industry if you look at it companies that had the networks in the ground are still here today... but all the virtual (rented) guys collapsed (well most of them).

There will always be a market for a smaller host.
Being big does not always equate to quality or good service.
Nor does being small obviously.

The key to small range hosting is retention. When you get clients you keep them.
Big hosts can afford to blow off complaints and have large turn over but a small host needs to go the extra mile to keep all clients satisfied.

A small company can make a very good living doing only local marketing at a comparatively cheap cost.

i agree. big hosts will not give you the support u need when it comes down to it. small hosts will do what they can to make sure u stay with them, and stay happy with them.

I disagree that the small companies are less competetive than those big hosts. Small companies know each their client and they have a real individual approach while the big companies often outsource technical support to India and another countries

Those are two are different ways to compete. Chances are that the small host, once it grows, will consider outsourcing in order to reduce costs. The bigger the company, the bigger the drive and the necessity to more efficiently manage resources.

Somehow this reminds me:

http://www.airlinequality.com/main/facts.htm