Money to be made in Free hosting?

I've seen so many free image hosts/media hosts opening up recently, people are buying these things up by the bucket load on other forums. Can the profits made by selling advertisements/google ads seriously outway the large costs of bandwidth/space?

I'm just wondering, because i've considered setting up a simple image host with a few more advanced features to seperate myself from everyone else. I can imagine a large amount of resources would need to be available to cope with the demand though.

My friend has one of these a few months ago - server costs were really stacking up so he sold it - but for a tidy sum. Its all about the adverts and stuff really but you need a fair bit of money for hosting costs to get going but like everything this market is getting saturated by the day so if your going to get into it you need to have a unique twist to stand out i reckon.

I used to help out with a free host about 3 years ago but they shut down. . . they were making pretty good money. I dont think google AD's would make that much to be honest but if could set up a good banner system it would surely real in the $$ - And ofcourse what starts out as free hosting can soon become paid hosting if you offer upgrades and features aswell as normal paid packages. . . . i've always seen free hosting as a good way to attract in potential customers and make money at the same time although as the saying, if your planning to be big it takes atleast 6months to break even in hosting so you would need some fundage to begin with

I can't see where the money is being made with sites like www.imageshack.us, there is hardly any ads at all.

Originally Posted by techo I can't see where the money is being made with sites like www.imageshack.us, there is hardly any ads at all.

From paid extra features by users.

The only way I can see this working, is if you can afford to buy your own dedicated box for the site. I know that imageshack is making money from the high payout ads, as well as the users signing up for more features.

The cost of bandwidth is dropping quite quickly, so I can see why so many of these sites are popping up.

got a friend who runs a couple of those sites and is doing well. the main money maker is a free forum hosting service. he said that really took off after a couple months from the start ... not bad

elkjar got it. I have my own server and is costs me no more then regular internet fees. So if I was to set up free hosting I wouldn't be looseing money but insted I would set up a free hosting to attract visitors and then add paid packages and other things to actually begin making money off the site once you have the visitors coming.
Also if your providing great service for little or no pay, people might be more inclined to donate to help keep the great service going.
Thats how I would see it working quite well.

The money on imageshack.us is coming from the google ads that are placed in a very good position and probably recieve a thousand clicks a day or more. They're obviously making more than enough to keep the site afloat.

I'm not sure they are google ads. I believe they have their own ad system set up.

Anyway I think getting into this is a gamble, but so are most other ventures.