Hosting have seen decline in prices since 1999, and its now becomming a very competative business, with tons of hosting providers selling hosting at unbelivable prices, with some selling hosting for $1.00 for 4years hosting. just a thought to find out how low should hosting be.

This really is a personal business decision. Do I think it should be $1/year, no. $50/year? Depends on what is being provided. We sell packages ranging from $50/year to $600/year for shared hosting accounts and never have a problem finding and retaining customers at these prices. Both we, and our clients, believe the service offered is good value.

I remember years ago there were a few Dollar Hosts type setups where they would sell $1 for the first year then up the price, but that just opens their doors to a lot of cancellations down the road. Also, at $1/year the quality of hosting must go down the drain pretty quicky. I'd never trust a host to still be online the next day if I was paying $1/year let along $1 for 4 years!

Actually, hosting has been quite competitive for a while now. We need to keep in mind that back some years ago, while the companies were fewer, the number of potential customers was also lower than what we have today.

As for the existence of really low priced competitors, that's generally not a huge problem. See, even in a hypermarket, people don't focus on price alone. You'll see them going for the brand name, preferred color/aspect, for the most attractive package, etc. That's people using heuristics to make a choice when the alternatives are too numerous.

A growing marketing problem today for hosts is the need to attract customers form your competitors. At some point the new comers to the web world will become too few to sustain the growth of any company. Assuming that the customers of good companies have no intention of ever leaving, gaining market share will become harder and harder, as the low quality providers are slowly drained of their customer base.

ldcdc has a good point. As the market grows so has the customer base. Customers have also become a bit wiser to gimmicks such as dirt cheap hosting and understanding that their income could be at stake should they choose a fly-by-night web host.

Hosting should not be treated as a business to become rich over night because it is not of that type. So, one should not offer that much cheap $1/4years or even for one year. Because you can never grow with quality offering such low price.

Charge economical price, in which you can grow your employee strength offering quality services.

That is exactly the problem. Too many people think web hosting is an easy "cash cow" and jump right in with both feet just to be severely disappointed.

So they try to offer dirt cheap pricing ($1 a year, etc.) to attract customers only to find they cannot sustain their business selling at those rates and quickly find themselves out of business.

In the end, this gives the hosting industry a bad name due to the amount of startups that quickly fail and run with the clients money.

That's why people should always look for quality instead of low price because "You get what you pay for".

Test that host completely before signing up, especially their support quality.

The problem is with end-users not understanding the difference between a "real" host and an "i bought an unlimited reseller a/c on ebay for $1" hosts - they make their decision on price thinking hosting is a "commodity" and then wonder why they get let down

I've just been helping a client move their hosting to us, having been "sold" unlimited everything for £5 bu a-n-other rovider and now has a mangled database because the host filled up their disk drive !

Cheap doesnt need to always bad, but price does matter as quality is provided on the verge of good price.

Cpanel hosting price can go as low as free, but it all depends on what kind of service do u need and how important it is.

I always agree "you get what you paid for", if the hosting is unbelievable cheap I have to doubt it's reliability.

The prices have become very competitive yes but also, the prices cant go that low.. you must remember that these host companies have expenses and costs for running the company so if they give ridiculously low prices, their services will also be low.. i believe the lowest they should go is about $5 a month.

I think that everything might depend on your own profit which you are interested to get.
Some companies have some different approach to that. That means that all what you need is based upon on you only. You can work with one client and can with 10 of them getting the same profit.
What way to chose - up to you.

Depends on your business plan and customer support.

For example, We are offering 1 dollar a month hosting plan from 2008. And in most of the cases, the clients get upgraded to higher plan within 2 to 3 months, when they get confidence in our reliability.

I had a hosting account on one of the "unlimited" hosts, and yes it was cheap and attractive. But the speed and response time of their servers was horrible.

You learn quickly as a customer, but it is painless really when you're only paying $2/month for unlimited I guess.

I actually do not remember a time when the web hosting industry has not been competitive (and I've been in the industry for over 10 years).

How low should web hosting be? That really all depends on the business, obviously if someone is offering web hosting for $1 per year, they are not going to be making any money, so it would be safe to assume that its unlikely that company will be providing a dependable service for years to come.