The concept essentially involves providing multiple Class C IP addresses. This means that a single customer can get multiple IP addresses from his hosting provider. The customer's primary site can be hosted on one IP address. Other IP addresses can be used to host secondary sites, all of which contain backlinks to the primary site. Search engine bots, being the rule-driven animals they are, interpret these backlinks as coming in from different sites and automatically assign a higher page ranking to the primary site. So, there you have it - mission accomplished and the customer's primary site fares well in natural search results.
The pricing model derives from the technical work-around. The more IP addresses you want, the more you pay. Literally every provider follows this model as depicted here. I am not sure though what the market size for SEO Hosting is; nor am I aware of the margins. Will post an update in case I find out later.
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