Shared hosting, sometimes called shared services or virtual hosting, is simply when multiple web sites share the same server, thus reducing the cost for everyone.
With a shared hosting account, your site will usually be on a server with tens of other web sites. That may sound like a lot, but it usually works out extremely well because most sites don`t generate enough traffic or use enough resources for it to become a problem.
Share hosting is suitable for personal sites, small businesses, and even medium sized businesses if their hosting needs fit within the parameters of a small business.
Most shared hosting providers offer substantially more disk space, data transfer, and email accounts than most people or businesses need. If every site used their quota, shared hosting would not work. But since few do, it actually works out quite nicely.