Linux Web Hosting is one of the most common and popular method of web hosting. One advantage is that the OS is free and it comes with a good system LAMP which stands for Linux Apache MySQL and PHP. Apache is server software running native in Linux although it can run in Windows as well, MySQL is a major competitor of Microsoft MS SQL.
The main advantage lies in the fact that Linux OS is mostly free unless you take Red Hat Enterprise which you do not have to as they are a lot of Enterprise Edition of Linux, the most popular ones are for eg Centos. There are also other favors, Debian which is more popular in the Europe side, Red Hat Fedora (the development version of Red Hat Enterprise), Centos are more popular in the USA and in Asia. There are others such as Ubuntu which makes it a breeze to install a server and FreeBSD which is more of a UNIX system. Most of these are well supported by cheap and effective controlpanels such as Cpanel, Directadmin which makes it easy for a startup company to setup a server with not much of a learning curve.
We do see that Microsoft Windows are catching up, but those offering Microsoft Windows tends to be companies as you will need to have licensing agreement with Microsoft such as the SPLA in order to use Windows for hosting clients.
Reseller packages are common for both of the OS, so that we can see a new hosting company formed even without the need of a server. And unlike in earlier times, they do not have the headache of setting up manually, control panels now do the work. Even if a start up could not afford the price of the control panels, there are always good free alternatives available easily on the market for Linux.
Linux advantage was right from the start, it had been a very stable platform together with Apache. Windows NT 4 is quite a nightmare to run. Windows 2000 server is ok, but Windows 2003 onwards is looking to be an aggressive threat to Linux and Apache.
Linux used to be harder to install but nowadays it can be as easy as Windows, except for the problem of drivers. Windows have no problem with drivers, but with Linux some drivers need to be compiled from source as it is not readily available from the hardware vendor. A particular big headache is Raid drivers, you more or less needs to recompile the raid driver everytime you change the linux kernel.