But 1&1 is not for sale. Business is too good. "I make high profits, and I cant spend it all," gloats Gauger. Whats he going to do with all that money? "Next year I will have more time for hosting world domination," he jokes. 1&1 plans on looking carefully at Eastern Europe and Russia, and perhaps even Asia. "Asia is difficult," Gauger says, pointing to cultural and political issues that may keep him from investing in that region. In Germany, 1&1 is the second biggest DSL provider and the biggest registrar. Nearly half of German households will have DSL in a few years, and the company already has nearly 500,000 users of its VOIP-based telephony service. However, the company will probably not offer high-speed IP access in other countries because the company doesnt have a strong enough brand internationally to overcome a lack of a physical networking plant.In the Web hosting business, the top five players in Germany have nearly a 60 percent share. The United States is still wide open, but Gauger sees that changing fast. "Microsoft and Google will enter the market," Gauger predicts. "The domain registration market has been waiting on Google for a year." When these two giants come in, they will probably "offer some kind of free hosting, with advertising, and will sell domains for free." He also sees them attacking eBay and Amazon as well. But Gaugers not worried about large companies competing with him. "All the competitors are not bigger than I am," he insists. "I have more customers than they do." Gauger also thinks that the domain registration and Web hosting market is just too small to become a strategic business for large companies. Its a $500 million business, he says, "and thats not a big deal for Microsoft." Check out eWEEK.coms for the latest news, reviews and analysis in Web services.
Gauger leaves the door open, though, for a possible MVNO play in Germany and elsewhere. "Maybe well do something in the mobile space," he muses. But WiMax isnt on the radar, again because 1&1 would "still need an infrastructure to put up the senders and receivers."