Web hosting and the oil industry…
What does web hosting and the oil industry have in common? Nothing? Maybe, but let me try to articulate my thoughts into a coherent argument that binds the two together.
The hosting industry is an extremely competitive market with notoriously low margins. Those hosts that struggle and eventually sell out or die usually do so because of lack of profits. Companies that make oodles of money
don’t usually up and go out of business, right Before these companies go the way of the dodo their service suffers first, their product suffers, and their investment in the future of the company suffers. This is what happens
when a company that you do business with doesn’t make a healthy profit. You WANT companies you do business with to make money. This is what makes your long term relationship with a company mutually beneficial.
Oil companies are the same. Big oil companies average between a 6-9% margin on their oil. 6-9%?? That isn’t that great of a return for a company. Would I run bluehost for a 6% margin? Absolutely not. I work too hard
for my money to get a 6% return. Why are we begrudging oil companies the same thing that all businesses strive for? I don’t care if Exxon made 89 billion dollars or 89 trillion dollars, 9% is still only 9%.
Let me tell you EXACTLY what will happen if a windfall tax is passed against oil companies. The price of gas will temporarily go down (less than 6 months is my guess). Future investment in exploration and drilling will diminish as these are completely profit driven, and the inevitable will happen: MUCH higher gas prices.
In 1981 we had over 300 refineries in the US. Today we have 142. Restrictions forced upon the oil industry have stifled our ability to be self sufficient. It doesn’t help that environment concerns (which are totally valid) have gone off the deep end in many aspects. We have dug this hold that we have to live in.
I guess what I am saying is that profit drives innovation. Innovation drives technological advances. Technological advances drives the price down through efficiency and increased supply. Interrupt the profit and you WILL interrupt this cycle. I sure wish there were a few politicians in DC that had actually run a legit business, instead of just taxing them to death. Maybe they would have an idea of how things REALLY work from a valid
business perspective. Anyone want to vote for me for Senator?
If you totally disagree, remember that I actually AM a nice guy, and yes you
should renew your bluehost hosting account
Matt Heaton / President Bluehost.com