S*** happens. Some are big s***, however, a few are bigger!

DremaHost made a huge blunder this week, when they overbilled their customers up to $7.5 million of hosting fee, and it turns out to be a PEBKAC issue as well, where its co-founder Josh Jones accidentally ran its billing software at the wrong dates. Digg reports it, and it is also on TechCrunch. In fact it is all over the news.

As a DreamHost customer, I too was hit with around $380 of charges. However fortunately it was covered (just) by the referral credit I have in my account (which I wasn’t sure how I accumulated so much) so I did not even realise I was wrongly billed until I saw their story on other web hosting related forums. Although it did no harm to me at all, I can image the losses from both DreamHost and their customers.

It is also interesting how other hosts react. Lunarpages has already blogged about their competitor’s billing fiasco, and offered a special coupon code for DreamHost refugees, possibly in response to DreamHost’s blog post with the same title. Search result for “dreamhost” on Google is still populated with $97 off discount (which is no longer valid). However don’t be surprised to see Sponsored Links filled with competitors’ ads trying to gain at DreamHost’s downfall.

Well. A simple catch on the future dates would have prevent the PEBKAC that we have here. An automated backup + a few warnings before wiping out the database would have prevent the PEBKAC that my account executive had as well.

/me back to do some more coding.

However it appears SmartyHost might be a bit nervous with MD Web Hosting. Or may just want to make some quick bucks at someone’s downfall.

First of all, MD Web Hosting had some availability issue with their US-based servers over the past few days. So I searched mdwebhosting on Google Australia. Sure, they came out first in SERP. But interestingly who has placed the highest bid on Google AdWords for this keyword.

SmartyHost paid the most for the top spot, posing a question “Is your website down?” and offering web hosting in an Aussie data centre. Perth-based Ilisys also asked “Need a new web host?”, offering site migration for free.

Is that the usual practise in the web hosting industry, gaining at your competitor’s downfall?

Updates

Apparently this “phenomenon” does not just apply to MD Web Hosting. Provoking your competitors on AdWords is common place in web hosting industry, excuse my naiveness. For example,

• Search for “Jumba“, we get Unlimited-Space.com.au’s ad ‘Sick of Jumba-Hosting? You’re not the only one… We’re the “Jumba Alternative”‘.
• Search for “SmartyHost“, and we get MD Web Hosting strikes back with ‘Paying too much? Get genuine local Australian…‘.
• Let’s go international. Search for “DreamHost“, and phpwebhosting.com asks ‘dreamhost outage?‘

Put in any major web hosting company’s name, and you are pretty much guaranteed to get competitors’ ads trying to “help you out”. Oh boy.