2 out of 5 SMBs Don’t Exist Online

- Confusion over cost and effort involved in owning a business website 

- 84% of SMBs pay too much for Web hosting 

- Web hosting industry leaves SMBs unclear about the real price and value of being online

- For many SMBs, affordability tops service, quality and reliability

SMB owners risk unnecessary spending due to confusion over the cost and effort involved in Web hosting, according to research released today by 1&1 Internet, Inc., the world's largest Web host by known servers. The results from a study of over 1,800 US small to midsize businesses [1] suggest that most SMB owners are misinformed about the cost of owning a business website.

The study discovered that 40 percent of SMBs do not yet have an online presence. Of those businesses without a website, 53 percent stated they had no idea what a website would cost each month. These small business owners need more information about the features and benefits of Web hosting to broaden their range of possibilities to profit from the internet.

Oliver Mauss, CEO of 1&1 Internet Inc., said, "While many small companies today leverage the Web with increasing proficiency, too many businesses remain excluded from the online world. Although an online presence becomes more and more important for the acquisition of new customers, small business owners are still unaware of the true cost of Web hosting.  They overestimate the necessary business investments for being online and underestimate how simple and affordable it is to source a website."

Of those SMBs already online, 83 percent report that their website was essential to their company's success. So, how could so many go without? Cost is a critical factor. The average respondent without an online presence guessed that a business website would cost a whopping $67 per month. 91 percent of those same respondents thought it would cost more than $10 per month, which is the average cost for a professional Web hosting package from Web hosts like 1and1.com – and that includes a domain name and email. 

Cost was found to be a major factor even for SMBs with an existing online presence. The average SMB spends $45 per month for Web hosting. 84 percent said they spend over $10 per month. Cost has become such an issue that when choosing a Web host 64 percent agreed that an inexpensive monthly fee is important, actually outranking service by 33 percent and quality and reliability by 25 percent.

Mauss added, "Given that an online presence is a key to a business' success, the Web hosting industry could be doing a better job at communicating the real price and value of being online. The industry must put a stronger emphasis on the fact that additional revenues generated from having a business website can far exceed the cost of owning one. Especially by implementing a do-it-yourself solution, businesses can keep costs low as they watch their profits soar. "

SMBs can significantly lower Web hosting costs by creating and updating their own website. Easy, DIY website packages are a great way for SMBs to create and maintain an online presence. Currently, 28 percent of SMB owners create their own website themselves and 37 percent hire a professional Web designer from outside the company.

Once the initial website is created, future work is completed in-house. 44 percent of SMB owners cut costs by updating the site themselves; only 22 percent still employ an external professional. This shift in responsibility suggests that the professional design may often be template driven so that little or no programming skills are required to make updates. Since a template driven website does not require professional programming skills, the data suggests that 15 percent of SMBs may have been paying for a service they could have easily done in-house.

"There are now solutions that are designed for all levels of Web expertise," Mauss continued. "At 1&1, for example, the 1&1 MyBusiness Site is the ideal DIY site builder for every SMB owner – even those with less Web experience. When prepared with knowledge and ambition for success, every business can have a fully functional website without exceeding their budget."

Since 2003, 1&1 Internet Inc. has been at the forefront of encouraging US small businesses to adopt the Web. 1&1 is the one-stop-shop for Web solutions, providing a high quality service with the security of our state-of-the-art data centers and 24/7 technical support. The company currently holds over 8 million customer contracts worldwide and manages over 10 million domain names. 

For more information on 1&1 Internet Inc. visit the website at http://www.1and1.com. 

[1] Survey of 1,838 US enterprises with 1 to 50 employees in December 2008 via online survey.

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About 1&1 Internet Inc: 

1&1 Internet Inc. is a subsidiary of United Internet, a profitable public company with a market cap of $2 billion. 1&1 was founded in 1988 and hosts more than 10 million domain names, while more than 65,000 servers run on the company's five state-of-the-art data centers. 1&1's global community is over 8 million customer contracts strong. The company's U.S. headquarters is located in Chesterbrook, PA. For more information, please contact the company at www.1and1.com or 1-877-461-2631.

For 1&1 Internet, Inc.:

Christine Skiffington

US Public Relations

701 Lee Road, Suite 300

Chesterbrook, PA 19087

TEL: (610) 560-1546

FAX: (610) 560-1511

press@1and1.com