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100,000 Domains Sold for $164 Million
miller60 writes "Here's a news item that puts some hard data on the domain typo millionaires post from a couple weeks back. Marchex Inc. just paid $164 million to buy Name Development Ltd., an obscure company that displays pay-per-click keyword ads on 100,000 domains. It's not a stock swap, either, as $155 million of that was in cash. The seller reportedly built the portfolio by scarfing up expiring domains (including hardware-update.com, previously owned by Microsoft and linked from within the Windows 2000 OS) and replacing the content with pay-per-click ads."
when you can buy them for 4.95$ a pop!?
Do a Google search for "web traffic" and look at all the AdWord advertisements. Almost all of them are sites that buy expired domain names or common misspellings of domain names, and for the low-low price of $2 they'll send thousands of people to your web site via such domains.
Also, for anyone that has used the site... www.whatismyip.com was up for an EBay auction that ended at about 11:00 pm EST last night. Last I checked the bidding was $55,000. Not sure what it ultimately sold for.
I'm a big tall mofo.
Visit the wrong domain and never click the ads.
.net, bensbargains.com instead of .net...) but as long as you don't click, there isn't any profit to be had.
Bandwidth costs eat up profit margins.
I've mistyped a few (slickdeals.com instead of
Of course, if you're like my fiancee and have trouble spelling any word... well, I can only hope those sites are limited to advertising only (and not phishing)...
This isn't spam - you request a page, you see an advert, it's not forced into your inbox.
This is seeing an opportunity and using it, and they deserve a bit of success from that. Whether they deserve $164m worth of success is another matter.
Who meta-moderates the meta-moderators?
I'm just astonished that this kind of thing actually works. Does *anyone* ever click on any of the ads when you arrive at one of these hijacked places?
For me, it's ctrl-W or backspace, every time.
-- As long as the answer is right, who cares if the question is wrong?
Just cheked eBay and the final bid ended up at $257,000. Not bad for a site doing 3GB/day of bandwidth.
Hmmm.
I work at an ISP. If all these domains point to the same class C or something I'll just block it at the router if it's purely advertising junk.
Anyone know details? Thanks.
- Cary
--Fairfax Underground: Where Fairfax County comes out to play
I wonder how much this will sell for?
http://slsahdot.org
If it walks and barks like a dog, it's a dog, no matter what you call it.
Have you ever called 1-800-COL-LECT? Have you ever called 1-800-COL-MECT? Same thing. You get a "collect call long distance provider". Just not the one you wanted. Profiting off of other peoples' errors isn't exactly a new idea. This is just a variation on a theme.
On a funny note, I originally heard about this 800 number scheme while reading Jenna Jameson's autobiography, "How to Make Love Like a Porn Star: A Cautionary Tale". Her husband apparentally made quite a bit of money in the mistyped 800 number business.
hi mom!
The fine folks at BuyDomains.com still have the SlashDot.Net for sale, and "The quoted price will be at least $688 and may be over $10,000." Valid business model or what?
(I intentionally left out all AhRefs, if you really want to see it, type away, I don't endorse domain stealers.)
Just
Not to be a bitch to a bitch, but sometimes e-mail addresses go defunct and one doesn't think to update the domain record because one doesn't realise that one needs that particular e-mail address to renew an expired domain. How many people have stopped using the e-mail address on their domain record because it was inundated with spam, or just registered with a temporary address? What happens if your e-mail address goes bad (i.e. a former free web email service decides to start charging, or an ISP goes under, or in a fit of rage you cancel all association with your ISP) and you forget your domain password? There are ways around it, but unless you've had to deal with it before, most people won't know what to do.
Please think.
I was told a story that McDonalds spends millions on strategic restraunt locations, where it would see the most traffic, and the condition of the neighborhood and all kinds of good statistics. what ever it takes to find the perfect store location.
Then burger king builds across the street.
You couldn't pay me to own a bunch of typo. domain names. It sounds like a thousand lawsuits waiting to happen.
You can have tremendous fun with other people's pay-per-click adverts if you have an ADSL connection and spend time not using it every day {like when you're at work, or asleep}. All it takes is a list of open proxies and a list of known PPC adverts. Then you write a little script that goes around "clicking" on PPC adverts via various proxies. Of course, you don't have to do anything useful with the "data" you retrieve.
One day, I might even write a screensaver that does exactly this.
Je fume. Tu fumes. Nous fûmes!
I had the impression that the buy-a-domain-to-be-rich story was over, not only due to NASDAQ, but also because of google! I can't imagine anyone who wants to update its hardware typing www.hardware-update.com, instead of googling "hardware update" (and at least in the first 20 pages of results that I checked, hardware-update.com does not appear!). Personally I even type "apple" in the google bar sometimes, its easier than www.apple.com).
Apparently domain sales prove me wrong.
What a lot of the "this isn't fair, this is criminal, this is predatory" posts seem to be predicated around is the mistaken belief that life is fair and that the stupid should have the same good life as the intelligent.
This is not a life insurance-selling shill forcing his way into some poor ignorant grandma's house, putting pressure tactics on her to buy into scam xyz. Much like people caught up in ponzi scams, Tom Vu seminars, what have you, it is entirely up to the user what he sees. Remember that truism about lotteries being a tax on people who're bad at math? Well there you go.
Nor are these guys pushing (for the most part) spyware, trojans, credit card theft, viruses, what-have-you, on unsuspecting PC users who've taken all reasonable precautions. I understand that your post is facetious (at least I hope it is) but referring to what I wrote above, the stupid, ignorant and lazy have exactly the same chances as everyone else. What they make of them is entirely up to them, including learning how to spell slsahdot.
Cole's Law: Thinly sliced cabbage
...yet another hotfix from Microsoft to remove the coded BSOD link to www.hardware-update.com since it contains ads, possible spyware, and not to mention Marchex Inc. might start charging Microsoft just for using their name in the OS they sell for $249.99 (US)?
-- Game Developers: Stop porting badly-textured games from crappy console systems!
But I suppose when one is googling, the easiest thing to do to find good results is to NOT click on .com links, instead go for the .org links which usually contain actual information.
Hey, since we're on the topic of domain sales, I own customalbum.com and it's for sale. Never did anything with it. Anyone have ideas for what I could do with this domain (other than try to sell it)?
Meh.
Well, the number is actually spelled "googol" and not google (which was an accidental misspelling of googol) or googil. Googil is actually closer to the real spelling.
Same thing happened to my old domain, but luckily I was able to snag one close enough not to matter. Still, you have to wonder about all the asshats holding on to "DorothyLSmith.com" or whatever. I guess they're in it for the long haul. In a way, it's like Old West stakeholders -- just stake your claim and you get the property rights forever and ever, providing you keep paying your taxes (registration). Forget to make a payment, and all the jackals come out of the woodwork.
They must be running some kind of automated system that spiders URLs, puts them in a database, then looks up the registration expiration date, puts that in the database. Then you just have a script running all the time. Sort the data in reverse chronological order by expiration date, then when the time comes, run a "register" script that attempts to automatically register the domain.
Thing is, this has to be extremely expensive. I guess the profit margins on people trying to buy back their domains is high enough to offset the loss of all the useless domains you purchase. You could mitigate the cost by going through the database and flagging URLs that don't look like they'd generate any profit.
This is basically your textbook definition of bottom-feeding.
I was going to suggest you get definately.com but it's been taken as well.
You'd be an internet hero.
About Warren Buffet: Buffett believes that much of the problem with the economies of the United States and other industrialized countries in recent years results from the proliferation of persons and organizations who produce nothing directly but are compensated based on the volume of business which they transact. He feels that most stock trades are recommended and made primarily to benefit the brokers rather than the investors and has stated that he feels that the world would benefit if each person had a lifetime maximum of twenty stock trades. He steadfastly refuses to split Berkshire Hathaway stock because the purpose of this would be to facilitate trading, which he has no desire to do. -Wikipedia entry on Warren Buffett Read that passage, then read it again..and when you're done reading it, read it one more time. Then you'll understand why some knucklehead will pay 160 million clams for absolutely nothing of real hard value.
I don't mind if I happen to type in the wrong page and see a bunch of useless ads. What irks me is when I am trying to do a search and all it returns are links to those ad pages.
If I may say so, life is a game, and there's so much to do and so few turns.
-Reiner Knizia
- I want to go read my localnewspaper.tld
- clickety clickety localnewspapper.tld
- Oh, this is obviously not the newspaper site
- This strange gentleman is offering me a mortgage! Come to think of it, my pocketbook has been feeling heavy lately. I'll bite!
I just don't understand how people think, I guess. Neither do they probably. But I guess this is what American style "impulse buying" is all about. The marketing psychologists have trained society so well that all you have to do is show advertising, even out of context, and people bite.A lot depends on how they use they typo page.
If they are clearly the wrong page then I see no harm in it. If they try to look like the typo page then that is wrong.
The best of them even put up a link to the correct page.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
That's my opinion anyway. I think its wrong. Buying a domain and selling it on at a huge profit however is not the same thing, and I have no problem with this provided the domain wasn't used for the above purpose in between..
Users misspell domain names, causing actions they do not want...
.check, where the second-level-domain has to be a checksum for the rest?
.com in their domains.
so, what technical solutions could we use for this problem?
We could of course leave it as it is, a la survival of the fittest. Or we could try educating users not to mispell (fat chance). But are there other options?
Credit card companies and banks have been dealing with somewhat similar probems, their solution usually involves checksum digits included in each number
Could we apply a simmilar system to domain names?
i.e advertise a www address as
httX:/Y/zzz.com
where httX tells the browser that the next character is a checksum, and Y is the one-digit checksum for "zzz.com"?
users of older browsers would still be able to visit such a domain by leaving out the checksum
Or, make a new top level domain,
http://zzz.Y.check
this would require no changes in current software, but would require companies to use something else but
Any other ideas? What do you think?
Happend to me too. I decided not to renew my domain name (thinking it was too obscure, and noone would buy it off me). I hadn't updated in a long time and was quite bored with it, and especially having it hanging over my head. I did have really good traffic for a while.
Long story short: A day or two after I let it expire it became a porn portal, then a redirect to a different porn portal. Then about 2 years later, a "search engine". Now it's that same porn portal again. 4 years and counting.
What I want to know is who the hell was giving out my traffic information and who the hell let these ***holes know that I hadn't renewed it?
What do they do? Search google for URLs randomly all day? Or randomly type in names into networksolutions to see if they're available??
I'm not pissed someone took it, that's fine. What I am pissed about is that now people think I turned my site into some junk spam porno crap. They even kept my folder names!
Back in the mid-nineties I worked at APple Technical Support here in Austin. We'd frequently get people on the phone who would say, "Did you know that if you dial 1-800-SOS-APPL with a zero in SOS you get a porn line?" I would usually tell people that was a service provided by Apple for people without internet connections.
$5 / month hosted VPS on linux = awesome!
Don't tell me about losing domains. In 1994, I registered several very good domains:
snell.org (Me of course)
cjs.com (Me again)
eleet.com (I thought I was...)
grateful.com (I was into the Grateful Dead)
bikeworld.com (for my dad's co.)
When NSI took over registrar duties for
Biggest. Mistake. Ever.
Here's a little snippet from the WHOIS record for grateful.com:
Administrative Contact:
Reflex Publishing Inc.
Internet Admin (not for sale) (admin@reflex.com)
+1.8133544500
Fax: +1.8133544500
1971 W. Lumsden Rd. #110
Brandon, FL 33511
US
"not for sale"
I get sick to my stomach every time I think about this.
With the revenue from this, they bought a collection of domain names of marginal value. It looks like they actually paid out only only $24.6 million on cash upfront for Name Development. And even that goes into escrow for 18 months. Name Development's income for 2004 was $4.6 million.
Name Development seems to be one guy operating out of the Virgin Islands who sold click-throughs to Yahoo:
Marchex is the target of spyware/adware litigation:
I don't see how this adds up to a company with a market cap of $761 million. This looks more like a dud dot-com.
Internet domain names are a lot like commercial real estate. The value is based on traffic count much like the number of cars that pass by a retail shopping center. Real estate investors also use solid investment analysis when considering the purchase of properties which makes the sale of these domains interesting.
It was noted on NetCraft that these domains get about 17 million unique visitors a month and at a $5.00 CPM (which is quite generous) that would be $85,000 a month ($1.02 million a year) in revenue. Consequently, the ROI (Return on Investment) would be 0.622% which is a very poor rate to receive.
In order to get a decent ROI, the new owners are going to have to increase traffic, create better content for higher paying ads, or provide some upsell item with a high profit margin and conversion rate. If this were a real estate property, this rate of return would definately make this property a "don't wanter".
Browse the Information Directory
You're right! It's not spam, but to actually credit dirt bags like this for scrafing up domain names as "intellegent" or "opportunits", I think is just wrong.
I totally hate how expiring domain names are up for grabs the minute they expire, because it creates the very market for nasty tactics like snagging someones domain. Yeah it's legal, but the morality is just wrong.
I think there should be a waiting period after a domain name expires. Say a company goes out of buisness, decides not to renew, whatever the reason, that domain name should become void for a period of a year. After that point, then it becomes availible for purchase.
I just think that's the responsible thing to do with respect to the end consumer.