Problem with gethostbyname - can't find any!

I have the following visual c++ code. It's taken from Beej's guide to
network programming, and modified a little foruse with winsock. But
gethostbyname just doesn't work, not for localhost nor any other ala
http://google.com
CODE:

#include "stdafx.h"
#include <winsock.h>
#include <iostream>
#define BACKLOG 1
#define MYPORT 18999
#define PORT 18999 // the port client will be connecting to
#define MAXDATASIZE 100 // max number of bytes we can get at once

class WSAInitializer // Winsock Initializer
{
public:
    WSAInitializer() {
        if (WSAStartup(0x101,&m_wsadata))
        {
            exit(-1);
        }
    }
    ~WSAInitializer() {
        WSACleanup();
    }
private:
    WSADATA m_wsadata;
};

int _tmain(int argc, _TCHAR* argv[])
{
    WSAInitializer* WSAINIT=new WSAInitializer;
    SOCKET sockfd, numbytes;
    char buf[MAXDATASIZE];
    struct hostent *he;
    struct sockaddr_in their_addr; // connector's address information

    if (argc != 2) {
        fprintf(stderr,"usage: client hostname\n");
        exit(1);
    }

    if ((he=gethostbyname((char*)argv[1])) == NULL) { // get the host
info
        std::cout<<WSAGetLastError();
        perror("gethostbyname");
        exit(1);
    }

    if ((sockfd = socket(PF_INET, SOCK_STREAM, 0)) == -1) {
        perror("socket");
        exit(1);
    }

    their_addr.sin_family = AF_INET; // host byte order
    their_addr.sin_port = htons(PORT); // short, network byte order
    their_addr.sin_addr = *((struct in_addr *)he->h_addr);
    memset(their_addr.sin_zero, '\0', sizeof their_addr.sin_zero);

    if (connect(sockfd, (struct sockaddr *)&their_addr, sizeof
their_addr) == -1) {
        perror("connect");
        exit(1);
    }

    if ((numbytes=recv(sockfd, buf, MAXDATASIZE-1, 0)) == -1) {
        perror("recv");
        exit(1);
    }

    buf[numbytes] = '\0';

    printf("Received: %s",buf);

    closesocket(sockfd);

    return 0;

}

Do you see any problems with the above code? I'm nearly 100% sure the
error isn't caused by my local machine.

When running it like client.exe localhost it gives the Winsock error
code 11001 aka host not found.

Any suggestions?