I see a lot of webhosts overselling now adays, Recently dreamhost increased the webspace to 200GB even on lowly plans. These are some tips on how to use that extra webspace.
1. Share with Friends - Share the webhosting with your friends and people who want to make a website but don’t have webspace. You can offer them a subdomain and provide them with their own FTP user to manage their website and files. In return you can ask them to include a link to your website.
2. Offer Free Image Hosting - There are plenty of scripts for websites to provide free image hosting. Most of these scripts are paid but you can grab them for as low as $20-$30 or there are some free ones also. You can generate revenue from the image hosting website by using ads.
3. Offer Wordpress Blogs - WordPress MU is multi-user version of the famous WordPress blogging application. It is ideal for people wanting to offer a hosted version of WordPress, Install Multi-User version of wordpress and offer free blog hosting to your friends or even strangers. Using WordPress Multi-user edition you will be able to people be able to sign up for a new blog and have them securely manage their templates and settings without affecting any other users.
4. Donate - Some guy told me that he donated the webspace to Kings Quest remakes by AGDInteractive. I recommend you find some great fan project and donate to them.
5. Free Stuff Websites - People are hungry for files. Start a website to offer downloads of eBooks, Hacking Tools, Cellphone Applications or whatever. You will surely get traffic to these kind of websites.
If you have any other idea please feel free to share. 
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