Marchex hints that it is considering other domain monetization partners.

Domain name company Marchex (NASDAQ: MCHX) generated $15.1M in revenue from its proprietary web sites last quarter. Much of that was generated from Yahoo (NASDAQ: YHOO) advertising links. But in the company’s quarterly conference call it hinted that it may look to other advertising partners in the future.

Marchex chairman and CEO Russell Horowitz:

Yahoo! is our primary partner. That existing relationship goes through late this year but we’ve got a variety of relationships with them that are ongoing. You know this is an area that we are certainly thinking about having a discussion…We are always in talks with a variety of players given the position in the landscape of having thousands of advertisers that were delivering to all the relevant distributions points. So whether it’s shopping engines, premium websites, or search engines, we are always looking a way to beat the relationships with any distribution source that can be viewed as a value proposition to our advertisers.

A couple big domain companies (including that of Frank Schilling) use Yahoo as their primary partner. It’s been a wild ride this year as Yahoo released its much anticipated (and delayed) Panama platform. Marchex says that the net effect of the switch to Panama has been higher click through rates but lower per-click revenue. Marchex says that Yahoo is unveiling new features throughout the year that may affect revenue.

It makes sense for Marchex to shop its advertising relationship. If nothing else they may be able to negotiate a better revenue sharing deal with Yahoo. At the end of the day, Marchex hopes to rely less on third party networks like Yahoo and Google (NASDAQ: GOOG) and more on its own advertising network. Legendary domain buyer Frank Schilling frequently says that if you’re serious in this business you need to own your own registrar. Perhaps the same can be said for owning your own advertising network. Google and Yahoo have a lot of power concentrated in few hands. Large domain portfolio owners must consider alternative monetization strategies to reduce risk.

Matt Bentley has a good article about buying domains to augment paid search campaigns.

People in the domain circle have been talking about the value of domains names as opposed to paid search campaigns for years, but the internet community is starting to pick up on this concept. E-Commerce Times just published an article by Matt Bentley about why companies should buy domain names to augment their paid search campaigns.

Domain prices are soaring as companies figure out the value of this free form of traffic. Why pay $5 per click to Google (NASDAQ: GOOG) for eternity when you can get free traffic for life for one upfront payment? Bentley points to examples such as School.com and OfficeSupplies.com (both Office Depot); Gift.com (JCPenney); Investor.com (MSN Money); and StudentLoan.com (Citibank).

Bentley makes a couple statements that are dead on:

Online consumers are turning to these “parked” Web sites — pages populated mostly by relevant keyword ads — because they can sometimes produce better, quicker results that avoid the manipulated listings that increasingly clog search engine results for highly commercial keyword terms.

It’s ironic but true. When I’m looking to buy something I don’t bother with Google’s organic listings. I turn straight to its paid listings. After all, humans are often times better determinants of search results than a computer. If a company is willing to shell out money for a search term, the landing page I go to will be very relevant to my search.

Bentley suggests companies acquire the keyword domains that perform best for them on their search campaigns. I recently sold one of these domains to a software company. Another benefit that Bentley doesn’t mention is that these domains can improve ROI on your paid campaigns as well.

Bentley continues:

As a marketer, investing in direct navigation generally pays for itself within a year or two, dependent of course on the quality of the domain and how well you can convert the traffic into sales. However, instead of being an expense as with purchasing clicks from a search engine, acquiring a domain (or portfolio of domains) for direct navigation purposes becomes an asset that retains its value (possibly even increasing in value) and can even be resold again in the future should your marketing objectives change…Only a few very savvy firms have already discovered that in this click-hungry era where many companies blow tens of thousands of dollars each month on PPC advertising, that purchasing targeted generic domain names delivers the same type of high quality targeted visitors at a much, much lower cost.”

Yes, only a few savvy firms have figured this out. But as companies spend thousands of dollars a month on pay-per-click, they’ll soon figure out that paying $25,000 or more for a domain name is a great deal.