Millions of Addresses, Thousands of Sites, One Business

An anonymous reader writes "A New York Times piece looks at a rising power in the 'new internet bubble' that you may not have heard of before. The business, an outfit called NameMedia, has made a concerted effort to quietly purchase vast tracts of 'real estate' on the internet. The ultimate goal is to provide additional advertising and page views for content sites. 'Behind this suddenly active business category -- which includes companies like iREIT in Houston, Marchex in Seattle, and Demand Media in Santa Monica, Calif. -- is the recognition that not all Internet users turn to a search engine when they are confused about where to find something online. Rather, 5 percent to 10 percent of people will simply type in a name that sounds as if it might suit their needs. The so-called direct search or direct navigation approach is seldom fruitful for users, nor has it been particularly profitable for owners of the sites that they visit. An obscure Web address may have four or so visitors a month, and perhaps half will click on an ad.'"

Comments

Uhmm....

[suv4x4]

I think I speak of everyone, when I say: WTF

Click Through Rate

[klingens]

and perhaps half will click on an ad

To which Devil did they sell their soul to get click through rates like that?

Re:Click Through Rate

[suv4x4]

"and perhaps half will click on an ad"

To which Devil did they sell their soul to get click through rates like that?

Google

Re:Click Through Rate

[Anonymous Coward]

You DO realise that these are the same people who navigate their way around the internet by typing the subject in the url bar and putting a www. on one side and .com on the other...

Such an opportunity

[mshurpik]

>An obscure Web address may have four or so visitors a month

Dude, I need to invest in this.

Namespace clutter

[MichaelSmith]

At the end of the day all of us pay for the clutter created by domain names which exist only to capture page views. Presently to put a domain on line you just need to pay for registration and hosting on two DNS servers. The distributed nature of DNS takes care of the rest.

Should a way be found to make domain squatters pay the true cost of their collections?

Re:Namespace clutter

[Killshot]

I really dislike how frequently when searching for information on something I find nothing but pages and pages of google ads.

I think that it may ultimately end up hurting google's business because people will get tired of searching for things and not finding it, and advertisers will get tired of paying for clicks that don't convert.

Someone should make a search engine that does not index pages where most of the content is google ads.

Re:Namespace clutter

[spottedkangaroo]

Report those pages to google. Supposedly, pages that link to pages with only google ads are against the adwords rules.

Re:Namespace clutter

[houghi]

Here is novelty idea. Why not use a searchengine to find those pages and then report them to Google.

Bah, scammers

[tomstdenis]

The only reason you buy thousands of domains is in the hopes that one of them becomes really popular and you can extort^Wscam^Wsell it to someone who will do something with it. I dunno about the rest of you, but when I google for hard to find products and I land on search engine bait websites, I just hit the back button, I don't click on the ads or worse, buy anything from them.

Tom

Re:zlitch content

[suv4x4]

They really show Google ads on these pointless pages?
If I did that my adsense account would be terminated.

Thing is, if you have one domain and host ads like that, it may be terminated. But if you have thousands of domains, Google will offer you Domain Parking services with AdWords on them. Yes, Google will spam the domains themselve.

I suppose the reason don't allow you to use this service if you got 5-10 domains is that it keeps the word of mouth down. It's not something Google wants everyone to talk about.

Nice business model...

[Simon]

...it would be a shame if anything were to happened to it.

--
Simon

ob. Monty Python quote

[name*censored*]

>>vast tracts of real estate

What's not to like about 'er? She has 'uuge.. TRACTS of land!

Re:zlitch content

[QuickFox]

They really show Google ads on these pointless pages?
If I did that my adsense account would be terminated. On the contrary, Google encourages domain squatting.

A bit hopefull

[mcfedr]

and perhaps half will click on an ad. no no no...perhaps none of them will click an ad...not only do i know i have never clicked on an ad, nor have most people i know, i have also tried putting ad's on websites with not many visiters, you never get hits

Niche site, for sure

[PuddleBoy]

NameMedia recently finished building technology where visitors to niche sites -- say, one on 1957 Mustangs -- will be presented with links to other sites with similar images.

Yes, I'd have to say that the number of people who want to talk about 1957 Mustangs constitute a "niche".

You are wrong

[Shohat]

You are wrong in your first assumption - the domains are bought from an already popular niche. This isn't gambling or cybersquatting
And regarding clicking - you probably assume that others do as you do - But this isn't true - these sites enjoy around a 15% CTR, and actually it creates a win-win situation. The users, instead of getting a name error (useless), click an advertisement which is often relevant to their initial request, the target site gets a visitor (which is targeted due to the initial related type-in), and the owner of the site gets some money from google. Nobody is scammed, everyone are happy and get exactly what they want. The user- a relevant site, google and publisher get paid, and the target site gets a well targeted visitor.

What about "The Man Who Owns the Internet"?

[1u3hr]

From this TFA:

What weve wanted to do, quietly, is amass the largest real estate position on the Internet, which we feel we have, Mr. Conlin said.

A week ago we had the story of a similar scumbag, Kevin Ham. from that FA at CNN Money:

The man at the top of this little-known hierarchy is Kevin Ham -- one of a handful of major-league "domainers" in the world and arguably the shrewdest and most ambitious of the lot.

So they're both the biggest. Journalisic exaggeration aside, it's disturbing that these parasites are celebrated by respectable financial reporters. These assholes are filling up the web with automatically generated pseudo-content, polluting search results to the point of uselessness. They're web-spammers with the same line of justification that email spammers used to use, they're "offering products that people might be interested in". A pest on both of them.

Financial details of a domain farmer

[Animats]

If you want to see the details of that business model, read the 10-K filing of Marchex, the publicly traded domain farmer.

Some highlights:

• "Our proprietary network is comprised of more than 200,000 Web sites."
• We deliver pay-per-click advertising listings that are reflective of our merchant advertisers' products and services to online users in response to their keyword search queries, and in response to their typing of specific Web Sites into their browser (direct navigation). These pay-per-click listings are generally ordered in the search results based on the amount our merchant advertisers choose to pay for a targeted placement."
• "We optimize key attributes of merchant advertiser Web sites to ensure the greatest opportunity for proper indexing, listing and inclusion in the editorial results of algorithmic search engines."
• "We believe we are among the leaders in the direct navigation market due to our proprietary ownership of online user traffic, which totaled more than 31 million unique visitors in the month of December 2006."
• "Online users can navigate the Web sites through a number of ways. For example, an online user who is specifically interested in traveling to Beijing may enter www.beijing.com directly into the Web address or URL box of their Internet browser. Once the user has arrived at the Web site they will find listings and information related to Beijing. As the user finds relevant information and clicks on a particular listing, we receive a pay-per-click fee."
• "We expect new laws and regulations directly applicable to our business practices to be adopted in the near future. "
• "We have largely incurred net losses since our inception, and we may incur net losses in the foreseeable future."
• "A significant amount of revenue attributed to our domain name assets comes through our agreement with Yahoo! and its subsidiaries."
• "Name Development acquired previously-owned Internet domain names that had expired and had been offered for sale by Internet domain name registrars following the period of permitted reclamation by their prior owners."
• "The Federal Trade Commission, or FTC, has recently reviewed the way in which search engines disclose paid placements or paid inclusion practices to Internet users. In 2002, the FTC issued guidance recommending that all search engine companies ensure that all paid search results are clearly distinguished from non-paid results, that the use of paid inclusion is clearly and conspicuously explained and disclosed and that other disclosures are made to avoid misleading users about the possible effects of paid placement or paid inclusion listings on search results. Such disclosures if ultimately mandated by the FTC or voluntarily made by us may reduce the desirability of our paid placement and paid inclusion services. We believe that some users will conclude that paid search results are not subject to the same relevancy requirements as non-paid search results, and will view paid search results less favorably. If such FTC disclosure reduces the desirability of our paid placement and paid inclusion services, and "click-throughs" of our paid search results decrease, our business could be adversely affected."

It's not a very profitable business. You'd think that, given how little they actually do, they'd be making sizable amounts of money, but they're not. They have substantial revenue ($127 million), but their operating costs and compensation eat up almost all of that.