Domain name parking companies are willing to pay $100s per acquired customer.

Ever wonder why so many domain name parking companies are popping up? It’s because this is a very profitable business. In fact, domain parking companies are willing to pay $100s to acquire customers, if these companies’ bid prices on Yahoo (NASDAQ: YHOO) are any indication.

I recently added a campaign for domain name parking in Yahoo! Search Marketing. I added the keywords “domain parking” and “domain name parking” and then let Yahoo tell me what I’d need to bid in order to expect having one of the “top listings” for the search term. The number isn’t for the weak of heart: I need to bid between $6.81 and $116.35 per click! If you consider that parking companies can convert 1 in 10 visitors, that means they’re willing to pay between $68.10 and $1,163.50 per user at these bid prices.

Yahoo considers ad quality in its calculations of necessary bid prices for top positions, so I tried a few different ads using actual parking companies’ URLs and the results were similar.

The bid prices for the term “domain name” were $4.16-$15.04.

Of course, no two domainers’ portfolios are worth the same. Parking companies need to market to the top domainers to get the biggest bang for the buck.

As GoDaddy gears up for its first Signature Auction, Domain Name Wire gets answers to your commonly asked questions.

GoDaddy’s first Signature Auctions will take place November 6, 7, and 8. GoDaddy first announced the auctions in July, but has been mum since then. Last week GoDaddy released the auction list. There will 31 domains in the three day auction.

At first I was a bit skeptical about the auction, and wrote a few suggestions for GoDaddy. Now that GoDaddy has released the list, I’m optimistic they’ll pull this off.

I connected with Nate Curran, Business Manager for Domains at GoDaddy, to answer a few lingering questions.

Curran explains that GoDaddy received several thousand domain submissions for the auction. GoDaddy cut a portion of the names that didn’t qualify. “There was an initial filter that removed names that did not meet our criteria — such as trademark infringements, adult names, etc. — for the auction,” says Curran. He explains that the filtered list was sent to a committee of domain aftermarket experts for review.

One of the curious things about the auction is the qualification process. There’s a brief application form on GoDaddy’s web site. The company wants to make sure only serious bidders participate, so it is qualifying each buyer. The easiest way to qualify is to pre-register with Domain Capital, which is providing financing for domains purchased at the event. “Pre-qualifying at Domain Capital is not required but it helps ensure people who are really interested in bidding are the people signing up,” Curran explains.

Gregg Freeman of Domain Capital says, “Domain Capital is very happy to be working with Go Daddy on this new venture.” Domain Capital provides financing for purchases at major auctions including TRAFFIC/Moniker and Domain Roundtable, as well as for private transactions.

GoDaddy says it takes about 72 hours to get qualified. As the auction nears it will take closer to 48 hours.

GoDaddy refused to provide any goals for the auction. But I have a hunch that the deck is stacked. After all, Bob.com is in the auction. My guess is GoDaddy CEO Bob Parsons bids on that one. For his part, Curran says he doesn’t know if Parsons will be bidding on the domain.

The list of domains in the auction includes a handful of premium .mobi domains as well as many domains from GoDaddy partner BuyDomains (a Name Media company). But there are several individuals with domains in the auction, and a few people have more than one domain up for bid. Furthermore, GoDaddy apparently didn’t consider which registrar the domains are currently with, as most of the domains are not currently registered at GoDaddy.

Below is a list of the .com domains along with the administrative contact and registrar:

VirtualServer.com Barry Brooks Melbourne IT
BestPhone.com Bob Kerstein eNom
BestService.com Bob Kerstein  eNom
Maillist.com Bob Kerstein  eNom
Smoked.com Bob Kerstein  enom
DietAids.com Buy Domains
HowToInvest.com Buy Domains
TravelUpdate.com Buy Domains
BargainBuy.com Buy Domains
RoadWork.com Buy Domains
TopBeaches.com Buy Domains
HDTVShop.com Chih-Chiang Ying Register.com
WhyHybrid.com Domainly.com LLC Godaddy
Campaign2008.com Emery Fore Moniker
SportUtility.com Kendra Cook Godaddy
MobileSecurity.com Kendra Cook Godaddy
YB.com Matt Chapman Network Solutions
Bob.com Privacy protected eNom
ForeignTravel.com Privacy protected Godaddy
1x.com SK Creations, Inc Moniker
BeautyCounter.com Tim Tarango Godaddy
Even.com Warren Weitzman  eNom
Earl.com Warren Weitzman  enom
Grapes.com Worldwide Media, inc Moniker
Six.com Xedoc Holding SA Fabulous

Turntable.com sells for $45k at Sedo auction.

[Editor’s note: the numbers in this article are unofficial and were obtained during the auction. Final numbers may differ slightly.]

Turntable.com was the big winner in this month’s Sedo Great Domains auction, which concluded just minutes ago. The domain sold for $45,000 after meeting its reserve at the last minute. Turntable.com received 16 bids during the auction.

Close behind that was MemoryCard.com, which sold for EUR 29,000 despite receiving only 5 bids. Silkscreen.com sold for $32,500, Fold.com took in $25,000, Wwi.com sold for $22,500, and Offset.com went for $20,500. PersonalAssistant.com sold for $12,500. I had my eye on that one, but couldn’t quite pull the trigger. I think it was one of the better deals in the auction.

A number of high dollar domains failed to hit their reserves:

Equity.com $150,000
Door.com $65,000
Fact.com EUR 50,000
Printer.com $43,000
Knee.com $38,000
Introduction.com $33,333
Lonely.com $35,000
RestlessLeg.com $36,000
VacuumCleaner.com $25,000
Equipment.com $25,000
noSpam.com $25,000
Shipper.com $23,000
Haul $25,207
Astronaut.com $20,000
Hotdogs.com $20,000

Sedo published the reserve range for domains, so some domains were not bid up if people felt the reserves were too high. Popular reserve ranges were $5,000-$20,000 and $50,000-$100,000. Introduction.com surprised me and makes me regret selling Introduced.com for only $1,900 back in December (even though that was a quick profit for me).

Sedo’s Great Domains auctions are held monthly and include a collection of premium domain names.

Bad web 2.0 names abound, but this case is particularly bad.

New companies get creative with naming, often times to save a thousand bucks on domain names. For example, Flickr.com dropped the ‘e’ from Flicker.com. Some would call Flickr.com a success story, but by choosing this domain they likely left money on the table. Flicker.com gets 150,000 type-in visitors a month from people looking for the popular photo sharing site. Perhaps it would have sold for more money had it captured all of the traffic. Yes, most people realize their error and go to the correct site, but many don’t.

I just read a particularly distressing story about bad company/product naming. John Cook of Seattle Post-Intelligencer writes about Whrll.com and Whirrl.com, two products with really bad names. Imagine one of them telling you their name. You’d probably remember it as “Whirl”. What makes this case even worse is that both of these products are very similar.

Co-founder of one of the companies, Darren Erik Vengroff told Cook:

“We went out and got as many domains as we could get our hands on that were variant spellings. That’s obviously one that was taken and we weren’t able to get. But if you mix up the R’s or L’s or put too many of one or the other, we are able to redirect you to our site.”

Here’s the problem, Darren. Your company name itself is a misspelling. How can you expect people to properly spell a misspelling?

The real winner her is Whirl.com, which is suddenly getting a lot more traffic.

What is a click-through on a mobile phone worth?

In November 2006, Sedo announced that it would serve parked pages on .mobi domains. The parked pages are simple, text-based lists of ad links. One of the .mobi parked pages I reviewed showed ads for a credit card. If you clicked the link from your mobile phone, it took you to a credit card application that could not be viewed on most mobile phones and wouldn’t work without SSL security. In other words, the clicks were worthless to the advertiser.

Google (NASDAQ: GOOG) recently started serving mobile converted ads in its network. The ads you currently have running are now syndicated to mobile phone ads. You can opt out, but otherwise you’ll start being charged for the clicks in late November.

Two of my affiliate ads have received mobile phone traffic so far. One is for 1-800-Pet-Meds. The other is for the Rhapsody music service. Google hasn’t charged me for the click-throughs, and that’s a good thing. Because these ads simply don’t convert.

I don’t know many people who are so desperate for flea medicine that they need to buy it from their mobile phone. And if someone clicks on my ad for the Rhapsody service, they won’t be able to complete the sign-up process nor download the application on their mobile phone.

There are ads that make sense on mobile phones, but most do not.

At the TRAFFIC auction in New York City this past June, I sat next to a couple big buyers. One of them had already purchased about a million dollars worth of domains by the time Mortgages.mobi came up for auction. He and several others chuckled about the name. They jokingly filled out a mortgage application on their cell phones. Their point was that it’s not very plausible to “convert” a user on a cell phone. One of the buyers runs an affiliate network, and understands what conversions are all about. (Mortgages.mobi sold for $25,000).

Pay-per-click doesn’t have much value on cell phones because it’s very difficult to convert into an action, at least with today’s technology. But there is an advertising medium that makes sense on mobile devices — click to call. More example, I may be in my bank’s office looking at mortgage options. Their current rates are 6% on a 30 year fixed. I grab my Treo and navigate to Mortgages.mobi and see a list of competing rates. Each rate has a “click to call” button that links me directly to the mortgage company so I can get more details. This scenario adds value to the advertiser and me.

This isn’t to say that future technology won’t make mobile click ads more valuable. Already, the iPhone is a step in the right direction to making mobile phone browsing less clunky. And this isn’t a knock on .mobi domains — this is the one new domain extension that makes sense. But advertising networks need to adjust their models to make mobile advertising profitable in the long run.