Financially, the offer is not as reckless as it first appears: it is a time limited promotion until January 2004, restricted to US and Canadian residents, and counters 1&1’s lack of brand awareness in the US. In this respect, it may turn out to be “cheaper than advertising” although they will need to do that as well.

One of the more pertinent observations is that 1&1 may extend the size of the market, as it has done in Germany, rather than decimate the incumbent American suppliers.

Our Hosting Provider Switching Analysis shows that the great majority of sites appearing on 1&1’s network over the last month are new sites rather than sites previously hosted with competitors.