Why leaving the one-click-hosting market is my personal choice…

(Deutsche Version dieses Artikels von Korrupt ist auf gulli.com)

I just setup an auction at eBay (jump to the english part) where I put our profitable and successful (financially as well as traffic-wise) gullishare.com 1-click-webhost for sale. Why this step? Why don’t I continue operating this promising venture and bring it to huge success?
Nearly all the reasons for selling it are centered around my personal situation. I’m moving there and back between Germany and South Africa and growing my company’s german office as fast as it’s needed is not in my interest. When you enter a promising but competitive market as this one, you should not expect to be able away from the office for weeks. You need to be present 24/7, grow your company at a fast speed and you can’t concentrate on other promising projects.
I’ve talked to many colleagues and competitors from the one-click-hosting business. Their future looks bright. One-click-hosters are the most under-estimated part of the web 2.0 boom. They keep quiet about their huge success, because they do – opposed to most of the other venture capitalised web2.0 startups – already earn REAL money instead of burning it and have lots of visitors instead of needing to generate some virtual ‘buzz’ to gain visitors or outside capital.
Take a look at the biggest player in the market rapidshare.com: Rapidshare was originally started by German entrepreneur Christian Schmid at rapidshare.de and switched over to rapidshare.com (translation by Google) 10 Months ago and incorporated his sole proprietorship into the Rapidshare AG.
Today rapidshare.com is having the Alexa Rank 12 – that means that – following the alexa.com statistics – Rapidshare is the 12th most visited site on the WHOLE internet! I recently had Rapidshare’s COO Bobby Chang on the phone who confirmed me (as other routing experts did as well) that the technical details given on the webpage (currently 140 Gigabit/s of Internet connectivity and 3.5 Petabytes of storage, while it was only 120 Gigabit when we talked about it) are indeed correct and not only there for marketing purposes. This makes Rapidshare the website with the second widest connectivity worldwide, with only Youtube ahead. Are they earning or loosing money? You bet! Rapidshare.com doesn’t display any ads on their pages. They say they’ve got 35 million daily visitors (I wasn’t able to confirm that number) and advertisers are certainly lining up to show their ads on Rapidshare, but they do solely rely on the fees they charge their premium users. When speaking to hosting/connectivity experts you realise that even when getting the best deals available we’re speaking about monthly infrastructure costs substantially higher than 1.5 million Euros per month! What other online business can claim grabbing more than 18 Million Euro (25 Million US$) for digital services from their users per year?
Let’s speak about other competitors in the one-click-hosting world. You’d think that Megaupload.com is #2 with an impressive Alexa Rank 15 but I ask you to take their numbers with caution. We do have some insider details about this site that I’ll share with you later this week so I’ll stop for now by saying that they certainly look big and impressive as well.

There are dozen other competitors with lots of traffic. Most of them are very profitable and they are all growing. I know about one site who’s able to pay their monthly 40,000 US$ hosting bill without charging their users any ‘premium’-charges solely by using the open-for-all advertising-networks available on the market and still generating a healthy profit…
Certainly: all these huge competitors do not make gullishare a bigger website than it is. With ‘only’ 2.6 million pageviews / 700,000 unique visitors per month we’re pretty small compared to many others, but we’ve got that we’ve got a stable and heavily scalable solution and this makes it an attractive purchase for someone looking to enter this fast growing and moving market.