For the last several months I have been providing free hosting friends, contacts and some people who sent me requests. I have several (~20) accounts that I am hosting.

I feel that I have the resources to open my free hosting service to the public. I would plan on offering:
25MB space
1-2GB/month of transfer
PHP, no CGI
MySql on request
FTP
Some sort of advertisement on the client's page.
No movie or archive or split file types, and a filesize limit of 150k
No hotlinking

I would probably open this up to the adult market. I would open for signups for a week (beta test, if you will), just to assess the situation, and see if it would be too much trouble.
I would rather grow slowly and have stability than be the latest one month wonder host.

My questions.

How does advertising pay these days? Specificaly for the adult market.
Are there any things I should be wary of in doing something like this?
Are there any reasons why i should NOT do this? What about reasons TO do it?
Are there any members who have attempted similar things?


I have drawn up a plan of sorts so if I do decide to go through with this I'll have some direction.
If I do this I plan on doing it right; I have my own vision of what "right" is. What would your idea of "doing it right" be.

Thanks very much for any input. :)

My advice would be not to do it:

Advertising is nowhere near as good as it used to be, well i guess that depends on the market but at least find out how much you could make from the ads before you start.

A problem is spam or illgel content, lots of people tend to abuse free hosts, even more so if they allow adult content. This could then get you into trouble.

Make a good business plan and do a test as you say, yuou need to make sure you are going to be able to make some money and that it wont be more hassle than its worth.

i would have to agree with taz.... just dont do it. Your going to attract all the people who are going to overly abuse your servers and possibly get you in trouble.

cpm is bad for banners

free hosting not good due to hackers, warez, spam types

if you are sub niched say free hosting for

quilt makers and you target your cpm model to the group it could work- that is difficult to create and govern

If your willing to give it away, charge like $10/year. You'll make more then you would with CPM based banners. If you have the extra bandwidth, and just don't care (and only want the banners to recover a little), go for it!

But if you’re thinking of using the banners to cover the actual costs of hosting, nope. The banner ad hype is dead. You'll be lucky to get $3-5 CPM, and if it's adult content, just think of how much bandwidth a user will use vs the income from banners since most banner companies only count unique visitors.

To make a long story short, if each GB costs $2.00, and if a user uses 25 MB of transfer <thinking now>.. That’s about 40 visitors per GB, and the banner income would only be, if your lucky, $0.05 with a loss of $1.95. (did that make sense?? I don’t know lol). Is it worth it, no! :D

edit: typo