The Real HostGator-VOIPo Partnership Details

We're getting ready to move into the 2nd phase of launch now that we've been running in soft launch mode for a little while without any major issues. We've been able to address a lot of small things that have come up (and still have some on the list) and get things ready internally to move forward on a larger scale.

In the coming weeks, we'll be officially announcing and unveiling the details of the HostGator-VOIPo partnership. I think once this all comes to light a lot of things will make more sense. We just didn't want to let the cat out of the bag too soon because other hosting competitors will try to duplicate what we're doing here, so I haven't said anything until a recent forum post here in the private forums even though we've been planning this from the beginning.

It's no secret that HostGator and VOIPo will be cross-marketing, but there's more to the story that no one really knows yet. It's a little bit bigger than putting a few links up on our respective sites, and I wanted to fill in everyone here first so you know what's happening as this rolls out.

Here's what's about to happen......

Background on Hosting

Hosting is really changing. HostGator has an incredibly large customer base (hosting over 1.3 million sites) and we're growing in a major way. With that that being said, the hosting market has changed a lot over time. At this point, bandwidth and disk space are archaic metrics to look at for providing hosting because their costs have dropped to a point where they're just not significant. Everyone has been offering such insane allocations (in some cases hundreds of thousands of GBs of space) and measuring things primarily on processor resource usage. Everyone keeps increasing the limits and customers react to that even though they'd never use these insane amounts of space, nor would it be possible. It's no secret that web hosting is vastly oversold. We just finally went unlimited completely...our competitors followed.

It's also no secret that hosting is incredibly profitable. We'll spend $200/mo for a server and bill $5K/mo from it easily and end up with net profit margins well above 50% after we pay for staffing, marketing, etc. So we invest a lot of that money into new things to bundle with our hosting. We're now offering things like Unlimited Free Private SSL Certificates, Free Billing Software, 4500 High-Quality Templates (we paid six figures for these so they're decent), etc. Our competitors have followed and many are offering the same things.

With that being said, we wanted to do something that no one else could really compete with in terms of some things to bundle. We also have such high margins and a ton of cash flow to work with and wanted to use that to do something that 90% of our competition couldn't afford to do. We wanted to do something that would take a while so no one could quickly copy it even if they had the money.

HostGator and VOIPo

Bottom line...we wanted to do something the hosting industry has never seen before. VOIPo is this "something".

This is really the primary link between HostGator and VOIPo in terms of how they fit together strategically and this partnership has essentially been the big picture plan from Day 1.

1) We bundle our Express items (Toll-Free, Fax, Virtual Numbers) with HostGator packages with starter usage limits set.

HostGator has a competitive advantage in hosting by offering something very very difficult to duplicate in the hosting industry. For VOIPo, since HostGator purchases all these services from us, we instantly have a massive stream of revenue coming in which puts us in profit mode almost overnight and volume to get some of the best wholesale pricing out there.

2) We bill these customers for overages, upgrades, and additional services they purchase. This is why the Express vPanel was designed to allow one-click purchases of other Express services. We sell more Express services, bring in overage revenue and built the Expresss line out with massive exposure from the HG bundles.

3) All this exposure leads to HG customers and even spectators researching VOIPo more and leads them to look at our residential service. For some context, we "went green" recently and have a page about it burried on our site at http://www.hostgator.com/green-web-hosting.shtml and one of those linked sites on there is pulling in an average of 25K visitors a day from our site. VOIPo promotion will be phased in gradually, but the end result will be up having front and center promotion on the HostGator site, HostGator control panel, upselling from HG reps, a PS line in all HostGator billing e-mails, etc.

We essentially have no marketing costs and get more exposure in a better context (happy, loyal HG users seeing a direct endorsement) than most of the competition can buy with big marketing spending.


Big Picture

All this comes together to really give us access to major volume, major exposure and major success without us having to spend much at all on marketing. It's a great deal for VOIPo.

HostGator gets a huge unique selling point and something to really set them apart. The owner of HostGator also has a passive minority share of VOIPo so he'll make truckloads of money from VOIPo as well. We're really good friends and decided it was best for each of us to focus on our own company, so he doesn't get involved at all with VOIPo and I'm only selectively involved with HG. His priority is to build HostGator even more and facilitates that.

This will all be phased in, but we're planning to do the initial rollout of toll-free service to HostGator by the end of the month. We've been wrapping up some things to tie our systems together for determining customer eligibility, etc and it's basically good to go.

Again, this should stay private for now, but once it's announced you can discuss it on public forums, etc. There will be a big announcement made and we'll gradually phase in the full promotion of the new bundles through the end of the year.

Here's a visual of our customer growth. This is actual customer growth...not domains.

Some dates...

VOIPo was planned in April 06.

We moved to Houston in October 06.

http://voipo.com/HGCust.JPG

Don't see an image in the "visual" post :)

Geeeez! My first thought was "What is Tim Dick doing up at 2.45am in the morning!" (when the rest of us are abed).

But, sleeplessness aside, I must say I am awed by the VOIPo/HostGator business plans. Among all the discussions and conjecture in the various on line Forums (especially BBR), your presentation offers a fantastic insight into a "brainstorming" process that pushes the envelope and practically assures success ... just by the scale of the overall operation. Moreover, VOIPo is not encumbered (at least at this point) by most of the downside issues that plague other providers .... 1) publicly traded corporations who must answer to their shareholders, 2) underfunded companies who depend on month to month income to pay for improving infrastructure, 3) one-man operations who are in VoIP more as a hobby than to make a "killing", 4) premature marketing with all the "coming soon" features and constant flaws in the service and support areas.

Tim ... You stepped in it. Continuing best wishes for success!

FYI this is going live within the next few days...

We dropped the first public clues about this tonight on some of the social networking sites.

http://twitter.com/hostgatordotcom

I really don't get the Twitter concept even reading more about it.
http://twitter.com/about#too_much

I never bought into MySpace, or similar either (Although my Mother-in-law has!) Too much information.

Maybe someone here can put a spin on it that makes more sense?

We're gradually phasing this in.

http://www.prweb.com/releases/hostga...web1856494.htm

PR went out today and it's now available for all new customers. We'll phase in the customers on other servers in batches over next few weeks.

Expected impact at this point is about 15,000 accounts.

Quote:

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Originally Posted by VOIPoTim

We're gradually phasing this in.

http://www.prweb.com/releases/hostga...web1856494.htm

PR went out today and it's now available for all new customers. We'll phase in the customers on other servers in batches over next few weeks.

Expected impact at this point is about 15,000 accounts.

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Wow!!

Something new and exciting every day.

Keep up the good work....

Looks like quite the money making item for Voipo. After the first 100 minutes, the user gets to pay 4.9 cpm :)

Quote:

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Originally Posted by Montano

Looks like quite the money making item for Voipo. After the first 100 minutes, the user gets to pay 4.9 cpm :)

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You're forgetting about HostGator paying for the first 100 :)

I'm all for it Tim. The more money Voipo makes, the longer they(you) will be around ;)

Quote:

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Originally Posted by usa2k

I really don't get the Twitter concept even reading more about it.
http://twitter.com/about#too_much

I never bought into MySpace, or similar either (Although my Mother-in-law has!) Too much information.

Maybe someone here can put a spin on it that makes more sense?

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More inscrutable data :)
http://blog.hostgator.com/2008/12/31...g-all-the-way/

I'll be a hold-out!