In the past I've considered starting up a free host that would display a banner ad in a frame above the content (no pop up or pop under ads), but I'm not sure something like this could be profitable. If anyone has any experience from deriving ad revenue from a hosting business, I'd appreciate your opinions.

Free hosting is a rough business. Typically when I see free hosting companies that they are selling they are making $300.00/month and have 9,000 users. The other problem with it is, many of the free host, do not generate revenue from displaying ads anymore. I'm not sure where that started to be a good idea not to make money but they did.

As in any business, with the right business model and personality anything can be profitable.

A banner up top will bring in good revenue but it depends on the free users you get. A small banner on the bottom of each site that people can pay for will increase the revenue by a lot. Google ads up top, and paid advertising at the bottom.

I used to do this and I made on avg. $500-$950 per month. But, I had some personal stuff get in the way and had to sell it.

If you know how to run it, it can be very profitable. Also, banning IPs from India, Asian, Turkey, countries near iran, iraq, etc will reduce a lot of spammers, hackers, and a huge headache down the road.

Great advice from Romes.

Be careful with the google ads suggestion. There was a clause in the google adwords/adsense in that you could only place the advertising on YOUR site. So even if you are giving the hosting away, google was still looking at those sites as being owned by the individual and not you.

This was changed in recent years due to sites like blogger etc offering webspace for free and the blogging etc, however there still remains two very important parts;

1) Only ONE adsense campaign can run on a page. So if you are forcing ads, and a user uploads their own adsense campaign also, google sees TWO and blocks you.

2) If the site is really popular (over 100,000 views/day) then you can use the google adsense api (http://code.google.com/apis/adsense/) and share revenue with your users.

3) If any one of your users are uploading things that are controversial, try to exploit the adsense program etc, then your account will be blocked. So even though YOU didn't do it, someone on your account did, and therefore you're now banned.

Be very careful with something like this - it can leave a big hole in the pocket if you're not policing it.

Thanks for the advice regarding Google ads. I've heard that it's fairly easy to get banned by Google and that there's not much recourse after they've done it.

You could also have google ads on your main page, in cPanel, and what ever else you can think of. A buddy of mine made himself a script to check for google ads besides his on a users site.

(NOTE: This was 2 years ago, no longer friends nor know what he is doing now.)

As I was saying the script would locate ads that didnt have his pub ID I believe and if there were two IDs it would either suspend that site or redirect the page to his main site. Also, it wouldnt be hard to create a script like this if you know how to code php.

Getting suspended is REALLY easy. We were suspended about 5 years ago. Google claimed that we were clicking on the links on our own site in order to generate revenue (like I have time for that). They then banned the account/domain from ever using adsense again. They have no recourse, and no way to fight their decision.

On another site, I was generating just over $1500/month in revenue, and they banned it for the same reasons. Popular site with lots of info and a lot of people clicking out of our site generating the revenue. I've NEVER tried to dupe an affiliate program before, so I was shocked when the call came down the line. Needless to say, I no longer run adsense on any of my sites.

Yeah, google did the same thing to me 2 years ago. I was generating $500/m off my forum and google banned me and said I was clicking on them my self. Google just doesnt like to pay people.

You are never protected against someone clicking on your ads many times every day - just to hurt you. If you want to compromise someone's success, people will find a way. When I was busy with another site of mine that was generating fair adsense revenue, I would watch the reports daily and if I noticed an unnatural # of clicks and revenue (way above average), I would actually email adsense myself asking them to investigate if the activity was proper. They thanked me for being alert and both times said nothing was wrong.

Coming to the main point of this thread - can ad space pay for free hosting. Sure it can. In fact, most operators rely on advertising to sustain and profit from it. Those who understand the advertising world will run a successful hosting business and make money. However, not everyone can claim that as there is just too much competition between free hosts. How can you EVER compete with a free host that offers unlimited space/bandwidth and places no ads on users websites? I mean how do you top that?

But there are certainly ways that proved successful.

Yeah, but again common sense comes into play. No forced ads, and unlimited space/bandwidth? That tells you your site won't be up for long. I would rather go with someone who forces ads than one who doesn. The one with ads will stay up longer than the one who doesn. It is just common sense.

Supporting Free Hosting can bring problems and make you lose money. In the end you might make some cash but be for all that your going to have to put money into it and lose it. I've been thinking for the past couple days of opening up a free hosting site and making money off ads. Im going to have to do some big research on this.

Why would people choose your Free Hosting with ads, when they can get it Free without ads?

If you want to make some cash, try making cheap shared hosting plans instead of Free Hosting with ads. You will see more profits!

Free Hosting are for companies who want to attract customers into purchasing Shared plans when they use up there resources.

You'll probably have better luck in the free hosting market if you pick a niche rather than offer general free hosting, also as others have pointed out, be careful if you decide to use Adsense. I'd recommend that you try to sell ad space directly instead which probably will be harder but prove more profitable/safer in the long run as you wouldn't have to worry about some strict ToS making your profit vanish.

Yes if you are serious about using Google then I would really be careful in how you use your Google coding as you really could end up at a major loss if you lose being able to use Google at all.