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There are huge number of factors which affect a free host.. Seraphim is one of the most experienced in this field - every word Seraphim said is from experience.
You can expect a huge number of spam accounts. I had my domain blacklisted and banned by the registrar because I was giving out subdomains using it and some of them were using it for very nasty purposes. It took me some time to get back everything in order.
Now I am providing free subdomain on a different domain name rather than using my main domain for both..
You may need to find alternative sources to get your income..
Some good solid points were stated about administrating a free hosting service. Thank you all for sharing.
@enoughhosting When we started way back when (7-10 years ago under another name) the targeted audience was people we knew, in person and worked with. That worked brilliantly and we capitalized on it. Servers hosting sites for games like cs.1.5/6, library pages of Yahoo VB Packet Flooders/Booters, myspace.... hacks, and so on.
The market now is about apps, fast delivery and almost getting zero latency. Many of us free web host providers have been online for the last x amount of years. We gained trust and respect from our current members and past members. They still advertise for us and some how always return. That networking is hard to come by now because the market is "saturated" as mentioned earlier.
If you are that interested in free web hosting, and something tells me you want "the perfect business answer for a short cut to success" - you will need to come up with a niche that is reasonable and reliable. MySpace, FB, Twitter, Tumblr are perfect examples - for their type of hosting.
There are so many free web hosts online offering everything. But only 15% or so have lasted 2 or more years. Many of us have been online for 12-15 years offering free services. It will take some patience to generate continuous revenue. Multiple websites and squeeze pages for products is a good start.