In 2009, Resolve to Protect Your Digital Assets

Posted on Saturday, December 13th, 2008

I just finished reading Matt McGee’s post titled In 2009, Resolve to Own Your Digital Assets. Like that title? Note the similarity to mine? Well, his post got me to thinking about the doom and gloom recession we are in, and still to get deeper into, and what that may mean for website owners who do own their digital assets.

This recession is not simply about GM being a bloated dinosaur of a company long due for a complete overhaul, or sub-prime mortgages bringing real estate values back down to the long term mean, or even big banks in need of massive bailout packages. None of those are causes, they are merely symptoms of the bigger bubble that is bursting. The credit bubble. But I digress a bit, but only a bit, you’ll see.

So on to protecting your digital assets. Like Matt said, you should own your own domain name and not be using free hosting services. Domain names are cheap, only $10 per year. And for most small local businesses web hosting is cheap too. In the range of $5 to $30 per month.

Here is where you need to protect yourself. DON’T HOST YOUR WEBSITE WITH THE SAME COMPANY YOU REGISTERED YOUR DOMAIN NAME.

What Happens if Your Web Host or Domain Registrar Goes Bankrupt?

Some of the faster growing domain registrars and web hosing companies did not get that big that fast on organic growth. They did it on credit. Some of whom may rely on lines of credit to operate their massive data centers. Here is where some risk lies in today’s current credit crunch environment. As this recession goes deeper we may hear of some web hosting companies and/or domain registrars going bankrupt.

According to Google Insights, both ‘web hosting’ and ‘ domain name’ as search keywords show a steady decline for the past 4 years. Just last month Lycos Europe reported it is liquidating portions of it’s business, including it’s web hosting arm, in response to a 20% decline in revenues.

If you have both your domain and hosting at the same place you could be screwed for quite some time. Loosing traffic, search rankings, and trust with the search engines. Ouch!

If a web host goes under you can possibly loose all your data (page files and databases). Obviously you should have backups of your data on your home or office machine, not on the server. If your domain was registered with a separate company you could move hosts in a matter of hours, or at most 24 hours, if you really had to. Just set up the new hosting account, upload your data, and reset your DNS ( domain name server) settings to point the domain to its new host.

When a domain registrar goes out of business the domains under their control may eventually get handed over to another accredited registrar. At least that’s the theory. In the case of RegisterFly.com being striped of its accreditation due to fraud there was a lot of confusion and it took some time before a big chunk of the 2 million domains under their control were transferred to GoDaddy. Some people did loose domains though.

Domain registrars are required to carry $70,000 in liquid cash as well as comply to various standards set out by ICANN. So the risk of one going under is likely a lot lower than a hosting company. But, if a registrar were to go bust your domain will, for the the meantime, continue to point your traffic to the hosting server as your DNS settings remain intact until the domain gets transferred to another registrar.

Diversity is the keyword here. Spread the risk around between your host and registrar. Just in case.

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