Before you start to provide free hosting services, it is important to realize you have enough fund to pay your servers, your employees and yourself. Usually, it may take up to 3-6 months for you to get substantial revenues; so be prepared for the hard time for the first few months.

To generate income from your free hosting services, you have several options:

1. Sell you own ad space directly. This could be very difficult for beginners as you do not have enough traffic. The advantage of this option is that you have full control of ads to be shown on your sites and you can set your price based on CPM (cost per 1000 impressions) or CPC (cost per click). The main disadvantage is that it is hard to sell……

   You need install some software to track your ad campaigns. PhpAdsNew is an excellent ad server package. It is free, it is powerful and it is well documented. The shortcoming is that you may spend some time to integrate it with a shopping cart.

   RevSense has a relative long history in the market for webmasters. The price (currently, $149) is reasonable as I was told by a few webmasters that the quality of code is quite good.

2. Earn money through “upgrades”. This is more suitable for big players with large user bases. It may be difficult to attract enough upgrades to cover the cost if the number of active users is less than 2000. Geo-distribution of your users may also play an important role: if you have a lot of users from Europe or North American, you are very likely get more paid upgrades.
3. Use 3-party ad services. This is used by most providers nowadays. It is important to understand that the quality of these services varies sharply and you may have little control of the ads to be shown on your sites. Although some providers allow you to exclude certain ads; it is usually not very useful. You should also understand most providers pay you on net-30 or net-60 days; it means you have to wait 30—90 days to receive your payment.

   There are a lot of such service providers. In part II, I will introduce you some providers that are friendly to free hosting providers.