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I'd suggest staying clear of AdWords in your position. It is not very effective if you are new - especially in a competetive market like web hosting.
Check out AdBrite.com - that might be of some interest.
Also, I'd first put most of my efforts in free promotion - not does it help get some traffic, but it helps you figure out what works and might help you determine what is the best way to spend your money and what is the best campaign message...
G'luck.
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