DOJ probing advertising contracts for Yahoo-Microsoft search deal.

Domain Name Wire has learned that Yahoo! advertising partners have received a notice that the company will be providing copies of their advertising contracts to the Department of Justice. The disclosure of this information to the Department of Justice is in conjunction with the DOJ’s review of the Yahoo-Microsoft search deal.

The request by the DOJ is being made pursuant to the Hart-Scott-Rodino Act of 1976, which established the federal pre-merger notification program. Section 7A(h) of the act requires that the documents not be made public except in administrative or judicial actions made by the DOJ or Congress. As such, the contracts will not be made available to Microsoft.

If Yahoo later learns that the DOJ plans to make the documents public, it will notify its advertising partners in advance.

The Yahoo-Microsoft deal could be a boon to domainers, but the effects won’t be seen for at least another year or two.

Parking company says publisher committed fraud by parking domains it didn’t own.

Oversee.net, parent company of domain parking company DomainSponsor, has filed a lawsuit (pdf) against one of its former customers.

The lawsuit alleges that Simple Solutions, LLC, parked domains with DomainSponsor and represented that it owned the domain names. However, Oversee.net alleges that Simple Solutions didn’t actually own the domains, and their ownership was in dispute.

DomainSponsor’s advertising feed provider refused to pay DomainSponsor for clicks on the domains because of the dispute over ownership. The parking company ended up paying over $75,000 to the defendants, but its feed provider didn’t pay DomainSponsor for any of the clicks. (Although not referenced in the lawsuit, DomainSponsor’s main ad feed is Google).

The alleged fraud took place in November and December 2006.

Oversee.net is suing for breach of contract and fraud. It is seeking actual damages, interest, punitive damages, and attorneys fees.

New service from Directi could boost industry.

Every once in a while you see a new product hit the domain name market that you really want to see succeed. DomainAdvertising.com from Directi is one of those.

DomainAdvertising.com has the potential to bring more advertising dollars to the domain traffic market. It is the first service I know of that will evangelize the value of domain traffic to advertisers. We all know that we can’t count on Google and Yahoo to do that.

The company offers a high touch service for advertisers to help them maximize the value they can get from the domain channel. That includes buying parked domain clicks from existing networks and directly from domain owners, leasing domain traffic, and buying domain redirects.

So what does that mean for domainers? I asked Alap Ghosh, VP – Strategy and Business Development, to break it down:

We’re a traffic monetization program for domain owners. They will park their domains with us and we will then use our advertising network relationships to maximize the revenue earned on traffic from the domains. The traffic will be sold in different inventory models and using different media formats, optimized for the traffic that we receive. We will also selectively bring services like domain leasing and domain brokering among others. Our focus is to directly evangelize the domain medium to advertisers and help them buy traffic. We believe that of all the online advertising mediums available today, domains bring the best return on ad investments. Advertisers, in turn, have given us a great response and we already have over 120 networks joined up.

Many claims in Sendori’s patent applications are denied.

Sendori, a domain name advertising service acquired by IAC in January, has hit some major roadblocks on patents it filed.

The U.S. Patent and Trademark Office has sent a final notice of rejection (pdf) on a number of claims in Sendori’s application for “Domain Name Marketplace”, publication number 20080189192. It has also rejected a few of the claims in “Electronic Marketplace Used to Lease Domain Names and Redirect Web Surfers from Leased Domain Names”, publication number 20070260518.

Sendori provides a marketplace where advertisers can bid on redirects from domain names. For example, an advertiser that operates a video game store online could buy redirects from VideoGames.com.

The major issue Sendori is hitting is that the basic concept of its business was the same as a shuttered Advertising.com service called VisitorBid. When Sendori had its coming out party several years ago, I remember asking Sendori founder Ofer Ronen how his service was different from the one Advertising.com shuttered. He explained that it integrated better with domain owners’ portfolios (e.g., offering an API). That was probably the case, but trying to patent all aspects of the service should certainly be met with resistance.

Sendori still has a chance to reply to the final rejection.

New advertising option excludes parked domain names.

The settlement of a class action lawsuit against Yahoo may result in lower pay-per-click revenue for parked domain names.

The lawsuit was brought against Yahoo for allegedly misleading advertisers as to the sites where their ads would appear:

This class action was brought in 2006 by several Yahoo! pay-per-click search advertising customers. They allege that customers contracted for targeted ad placements through two products, “Sponsored Search” and “Content Match” (and predecessor products provided by Overture Services, Inc. and GoTo.com, Inc.) and that Yahoo! breached its contract with its customers by allowing Yahoo! ads to be displayed in spyware, domain name parking sites (also known as bulk registration sites), pop-ups, pop-unders, and typosquatting sites. Plaintiffs brought claims for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.

As part of the settlement, Yahoo must create a new “Premium” ad placement option that will only show ads on Yahoo-owned web sites and other select parts of the content distribution network. This specifically excludes parked domain names:

“Premium Providers” means: (a) all web sites and web pages (including any microsite), software applications and other properties on the Internet that are owned or operated by Yahoo!; and, at Yahoo!’s option, (b) all parts of the Distribution Network other than: (i) domain name parking sites; (ii) bulk registration sites; (iii) “pop-up” or “pop-under” windows; (iv) typosquatting sites; (v) “sliders”; (vi)
“sidebars”; (vii) “injected ads”; or (viii) unsolicited spam email.

(See paragraph 22 of this settlement agreement)

It’s painful to see parked domain names being lumped together with spam emails.

Smart pay-per-click advertisers know how to manage the content network to get a high ROI. But lazy ones — and those that don’t have much knowledge of the network — will likely opt in to only showing their ads on Premium Providers.