Another note on “Sedo begging for a new market entrant”, there are over a dozen players in the domain parking space. The begging was done a long time ago

I\’m surprised that you\’re saying Afternic\’s new two-click designs will result in lower CTRs. Many studies have shown that two-click designs actually increase overall revenue. Yes, the CTR goes down, but overall revenue is the only thing that matters. ActiveAudience (Afternic\’s new parking service) is a big player and knows what it\’s doing. Likewise, BuyDomains directs most of the domains it owns through two-click pages. They wouldn\’t do that if it didn\’t maximize long term revenue.

Additionally, Afternic\’s \”old\” parking service allowed you to choose amongst other parking services. Afternic basically threw in the towel on competing with services like DomainSponsor and actually integrated DS into its service.

DIY site creation tools have existed for years. Yes, they are getting easier, but they still require significant work in order to develop an individual site. I\’m a big promponent of creating mini-sites for your domains, such as my site at http://www.nutritionist.info, but let\’s face it — I can\’t do that for everyone of my domains.

1. Is Escrow.com a competitor to Sedo?

2. How do we define price listing caps?

3. Traffic monetization issues at Afternic

4. The challenges facing Afternic’s new owners

Is Escrow.com a competitor to Afternic and Sedo? I would argue yes, on the basis of observing how large portfolio owners frequently sidestep the 10% fees of those two marketplaces by taking transactions through Escrow.com. This contributes to three quarters of domain sales going unreported on news services such as Doman Name Journal.

I believe Afternic and Sedo are performing a valuable service and would discourage such circumvention. They deserve customer loyalty because of their listing services, statistical tools and traffic monetization.

On the issue of a Sedo price cap, the eCommerce Times report stated: “Sedo sets a price cap of 10,000 currency units (dollars, euros, or pounds) on standard listings on its site.”

This is not to say that prices do not or cannot exceed that listings cap, only that Sedo is seeking to reduce the prevalence of unrealistic prices. At the same time, I believe we need a fuller discussion of valuation methods that do not stick purely to traffic data. If you look at the prices for names reported on DNJournal.com, there is often a negative correlation between price and traffic.

Branding and uniqueness often matters more than traffic rates in determining prices.

The eCommerce Times article discussed statistical reporting tools at Sedo and Afternic and was critical of both marketplaces. In the 36 hours since the eCommerce Times article appeared, there has apparently been load testing occurring on Afternic, which has corrupted the limited traffic data that Afternic reports. Load testing is good. Not turning off customers’ traffic counters during load testing is bad.

The real competitors to Afternic, Sedo and to a lesser extent Moniker are not the Escrow.coms of the world. They are the potential for self-development of websites using new wiki style DIY services. One problem these DIY services have had in the past is that they fail at revenue sharing from traffic monetization. A second problem is that they are not built to easily enable search engines to identify and index their content. Trees are falling in the forests and no one hears them.

What percentage of traffic monetization revenues are the major domain marketplaces retaining for themselves? Let’s not be greedy here, but in the case of Sedo’s revenue retention, it could be argued that they are begging for a new market entrant to compete against them on the basis of transparency and revenue sharing. None of the DIY firms like WetPaint are making the right noises yet in this regard.

On the issue of NameMedia’s placeholder pages taking over from Afternic’s old system, those two-step formats (known in information science as a classified catalog system) may have some statistically significant impact on CTRs, but the revenue boost is not going to be enough to keep domain owners from drifting over to Sedo and other services that are actually able to push relevant, targeted ads onto landing pages in a high-RTM format.

Personally, I’m a big fan of Afternic, but I believe that they are in trouble on revenue-per-thousand-view rates and on being able to maintain statistics and statistical tools that can support valuations and ad keyword optimizations. They are not able to convert viewers to ad clickers like Sedo can.

How quickly NameMedia is able to correct those deficiencies will effect the entire competitive marketplace for monetizing traffic from direct search. Even people who are not Afternic customers have an interest in seeing NameMedia succeed simply to maintain a competitive climate throughout the industry.

Here is another article on business models for direct navigation that addresses the competition issue:

Direct Search Warms Up With Afternic Sale – But Competition Looms from Emerging DIY Site Creation Firms, by Anthony Mitchell
http://alwayson.goingon.com/permalink/post/7778

Anthony Mitchell
InternationalStaff.net