Startup pries domain name loose from software giant.

When your startup wants to upgrade its domain name, it’s never a good sign when the domain you want is owned by one of the biggest companies in the world.

That’s what happened recently with “social discovery engine” The Hotlist. The company uses TheHotlist.com as its main domain name. As any domain investor will tell you, this means a lot of people tried to find the site at Hotlist.com. (Remember how Facebook was once TheFacebook.com?)

The problem: Microsoft owned Hotlist.com.

But on Friday the startup managed to finally close on a transaction to buy the domain name from Microsoft. A company representative declined to disclose the purchase price, but said the company has been talking to Microsoft for a couple years about acquiring the domain name.

Congrats to TheHotlist.com. Or should I say Hotlist.com?

Data.com to highlight upcoming live domain name auction in Barcelona, Spain.

[Update: Salesforce.com bought the domain name ahead of the auction.]

Publicly traded media company UBM plc has added its Data.com domain name to Moniker’s upcoming live domain name auction in Barcelona. The reserve price is between $1 million and $5 million.

This is a fantastic domain name, especially with the “Big Data” trend in enterprise business.

Although the domain names are only loosely related, another domain with “data” in it is one of the most expensive ever sold: DataRecovery.com, which sold for $1.7 million in 2008.

The live auction will take place at the Pullman Barcelona Skipper Hotel’s Grand Ballroom at 4 p.m. Barcelona time during DOMAINfest Barcelona.

The auction features about 60 domain names, with reserve ranges from “no reserve” to over $5 million. Some of the key domain names include Social.com, Airports.com, and HorseRacing.com.

Pre-bidding for the auction has already started on the SnapNames platform.

There’s a reason each parking company performs differently.

Alright, it’s time for me to jump in.

Yesterday Elliot Silver wrote about parking companies and what they bring to the industry. Then today Michael Berkens wrote a post (rebuttal?) as well.

The discussion is stoked by Frank Schilling’s new parking company.

A few things up front:

1. I think it’s great that Frank is opening up his platform to others.

2. This article isn’t meant as disrespect to anyone, I just want to show the variables at play in domain parking. It’s important that people understand why parking revenue differs.

3. Yes, I now work with a parking company. The knowledge I’m sharing below is knowledge I had before working with them.

OK, let’s get started.

In Michael’s article today he writes:

Now IF Frank’s parking venture proves by in large to pay out more money to the domain holder’s than the domain holders received at the parking companies for the same domains and same traffic, then there will be only one conclusion, that parking companies are paying a smaller percent of the the revenue they agreed to pay them.

The notion is that a parking company lied to its clients about payout percentages if Frank’s parking company ends up paying significantly more.

Anyone who has tried multiple parking companies knows that your revenue is very different across platforms. Sure, payout percentage may be part of that, but there are many other factors at play.

So lets review the variables.

1. Upstream ad provider. This is usually Google or Yahoo/Bing. These each perform differently for various types of traffic, e.g. US vs. rest of world, foreign language, sensitive terms, etc.

2. Percentage the upstream ad provider pays the parking company. This is one of the biggest factors in why the percentage your parking company pays you isn’t as relevant as you might think. Let’s take an extreme example to illustrate. Let’s say parking company A and company B each agree to pay you 80%. But company A is paid only 50% from its upstream provider while company B is paid 100%. In this case, company A clients are only paid 40% of the upstream provider’s take while company B clients are paid 80%.

The percentage the upstream ad provider pays is largely related to the amount of traffic the parking company aggregates. This is one big value proposition parking companies provide to you: by aggregating your traffic with others, it can negotiate for a higher payout percentage. If you really think your parking company is trying to screw you, Google has a self-service parking solution for you. Try it out and see how it works.

3. Percentage your parking company pays you. See #2.

4. Alternative feeds. Regardless of which parking company you use, there’s a good chance that some of your traffic can’t be monetized on the primary upstream ad provider. In some cases a large chunk of traffic will be sent to so-called “Tier 2″ providers. The quality of these providers — and which traffic the tier one provider won’t monetize — at each parking company can make a difference in your payouts.

5. Optimization. This is a big one. Google and Yahoo/Bing have an ad feed, but what each parking company does with it is different. Some use one click implementations, some use two. Some optimize keywords for you manually. Some have automated algorithms to do this, or a combination of both. You might suggest keywords that are better/worse than the defaults. All of this has a major effect on how much money you earn with each parking company, even if the other variables are identical.

As you can see, there are many variables at play. IF you hold all of the others constant, then Michael’s statement that one parking company paying more than another holds true.

There are also issues with your traffic. Michael did note that he’s suggesting you send the same domains and traffic. But I think that’s not as easy to discern as most people think. Perhaps which domains get traffic fluctuates throughout the year. So if you park with one company through November and then switch to another before Christmas, you aren’t comparing apples to apples.

Your traffic quality might change from time to time as well as certain domains get more or less traffic.

Which brings up another point. Yes, all traffic is not the same. But for the most part parking companies separate traffic by quality, so your pure type-in traffic is not being lumped together with crap. (And just because your traffic is pure type-in doesn’t mean it’s high quality.)

To summarize, I don’t think differences of even 20% or so mean someone is up to shenanigans, even if both are paying out the same percentage. In a follow up comment Michael writes:

…But what if the numbers are 50% higher?

What will that tell us about the numbers we have been getting for years?

I’ll tell you this. If the numbers at Frank’s parking company are that much higher than all the other parking companies you’ve tried, then Frank is either a master negotiator or the millions of dollars parking companies have invested in optimization over the years has all gone awry.

But it would certainly be great news for the industry.

Domain owners can pick template for domains on self-serve system.

Google Adsense for Domains’ self-service system now allows users to select a template for their domain names.

The service has been auto testing alternative templates with various pictures for many months, but users didn’t have control over which templates were selected.

There are generic templates (such as “Daisy”) and category templates such as banking, legal, education, and business.

A text-only lander is still available, and Google recommends users let the system select which version works best for their domain names.

Domain owners can also place a “for sale” notice on their domain names.

Although the customization features are certainly welcome, the number of templates and graphics still pales in comparison to what most Google Adsense for Domains partners (e.g. Sedo) offer to clients.

Schilling’s company named in lawsuit over four letter domain name.

Florida VirtualSchool, which runs an online education service at FLVS.net, has sued Frank Schilling’s Name Administration, Inc. over his FLVS.com domain name.

The suit (pdf) also names K12, Inc. Florida VirtualSchool says K12, Inc. is a competitor and was receiving clicks from the FLVS.com domain name, which is parked.

Florida VirtualSchool has registered trademarks for Florida VirtualSchool and FLVS for “education services”. Both trademarks were only registered in 2010, but with claimed first use dates of 2002.

It appears any links on FLVS.com that may have led to K12, Inc. no longer exist. The site now links to baking and cooking sites under the idea that “FLVS” is short for flavors.

Florida VirtualSchool is suing for service mark infringement, unfair competition, and common law trademark infringement. The case was filed in U.S. District Court, Middle District of Florida, Orlando Division.