Domain Name Wire » domainsponsor

DomainSponsor Sues Publisher for Parking Domains It Didn’t Own

Andrew Allemann — Wed, 11 Nov 2009 14:32:39 +0000

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.

Review and rate domain name parking companies at Parking Judge.

Zappos CEO to Keynote DOMAINfest Global

Andrew Allemann — Wed, 23 Sep 2009 14:34:06 +0000

Keynote speaker announced for DOMAINfest Global.

Tony Hsieh, CEO and Co-Founder of Zappos.com, will be the keynote speaker for DOMAINfest Global 2010. The event will take place January 26-28, 2010 in Santa Monica, California.

This is a good choice for the show, given Hsieh’s background in internet marketing and domain names. Hsieh founded the popular banner exchange network LinkExchange, which he sold to Microsoft for $265 million. He also understands the value of a category killer domain name, as Zappos.com paid $4.9 million for Clothes.com. Zappos entered into an agreement to be acquired by Amazon.com for $850 million earlier this year.

If you plan to attend the event, early bird registration rates are available through the end of September for $895. Prices increase $200 on October 1.

Last year, more than 600 people from 26 countries attended the event, making it the largest domain name conference of the year.

Review and rate domain name parking companies at Parking Judge.

Typo FAIL

Andrew Allemann — Sun, 22 Mar 2009 18:47:28 +0000

An unwise typo domain purchase.

This domain name auction, which concluded earlier today, begs two questions:

1. Do domain parkers click on ads when they accidentally stumble across a parked page?

2. Who would be stupid enough to shell out $2,250 on a domain that they’ll lose through arbitration?

Update 3/23: I received a note from Sedo today that the transaction was canceled. With regards to the comments below about allowing sales like this to happen, my experience with Sedo is they’ll take these auctions down in a heartbeat if you notify them. They also monitor auctions, but occasionally miss some.]

Review and rate domain name parking companies at Parking Judge.

Critiquing DOMAINfest Global 2009

Andrew Allemann — Mon, 02 Feb 2009 17:18:08 +0000

As the curtain comes down, here’s a look back at last week’s conference in Los Angeles.

Oversee.net’s DOMAINfest Global 2009 was an excellent conference. Now that I’ve had time to relax and reflect on last week, I’d say the conference deserves five stars. Of course, there’s always room for improvement.

The Good
-Attendance was very strong at over 600 people. DomainSponsor handed out fewer “rebates” and free passes this year, so I suspect paid attendance was in line with 2008. That’s a heck of a feat given the economy.

-Google and Yahoo domain parking teams at the same show? Very cool. The session with Google’s Hal Bailey was OK, but the best part was meeting with the companies during Thursday afternoon’s networking session. Google brought down about 10 people from the Adsense for Domains and analytics groups. Yahoo’s team made the drive over from Burbank, where the domain parking team is located. The networking session with domain lawyers was excellent, too.

-DFG set the bar for professionalism at a conference. Sessions started on time and the moderators were well prepared. There were no blank stares waiting for the audience to ask questions.

-The entertainment was phenomenal. Although most people will talk about the party at the Playboy Mansion, I had a blast at Universal Studios. Imagine showing up to a theme park and having no lines, an open bar every twenty feet, and the cashier at the restaurants not charging you. I shared a few screams with the Domain Capital guys and Dark Blue Sea CEO Richard Moore on the Mummy ride.

-The exhibit hall was big and had plenty of meeting space. There were a number of exhibitors I’ve never seen before, so it was not just the same-old sponsors. With lots of couches and tables, many people held meetings inside the hall.

Suggestion Box
Nothing was “bad”, but here are some ways Oversee.net can improve the next conference.

-The legal session on the first day was too good to not be held during the regular conference (it was on the bootcamp day). Instead of the usual smattering of legal questions, the moderator walked the lawyers through an unfortunately common scenario that a domainer might face, including buying a stolen domain, receiving a cease & desist letter, UDRP, etc.

-With 600 people there, I didn’t get a chance to run into many people that I would have liked to. I found out on the last day some of the people who were there that I would have liked to connect with. DOMAINfest Connect was a good idea, but most people didn’t use it. I recommend sending an registration list to attendees a week before the show. It would only contain names and companies, and attendees could opt-out. This would allow me to set up meetings in advance without sending out a hundred “are you going to DOMAINfest?” e-mails.

-Dinner was held at the parties, which meant you didn’t get a chance to eat until after 8 pm. That’s late if you flew in from a later time zone.

Overall, this conference deserves the positive press it’s receiving. Now, all eyes are on New Orleans.

Review and rate domain name parking companies at Parking Judge.

DNW’s Practical Guide to DOMAINfest 2009

Andrew Allemann — Mon, 26 Jan 2009 15:36:02 +0000

What to wear and what to see.

DOMAINfest 2009 kicks off tomorrow evening in Hollywood, California. The lineup is solid and this looks to be a great event. Here’s my “practical” guide to attending the show.

When to Arrive
If you’re new to domaining, or even intermediate, you should try to arrive Tuesday at noon. Tuesday is “bootcamp” day, and includes several excellent sessions. I’ll be speaking at 1:30.

Everyone else should arrive by Tuesday evening at 7:00. That’s when Moniker’s low and no reserve auction starts. Afterward is a welcome cocktail party.

If you fly into Burbank you will have a short trip to the conference. If you fly into LAX it may take a while. A taxi will cost you $50-$100. Town cars cost about the same. A cheaper alternative is a multi-drop point shuttle service or public transportation.

What to Wear
High temperatures should be in the high 60s to low 70s and lows in the 40s (Fahrenheit). Dress at the actual conference will range from jeans and t-shirts to business casual. You might see a handful of people in suits.

Wednesday evening’s entertainment is outside at Universal Studios, so you should bring a sweater or jacket.

For Thursday night’s party at the Playboy Mansion, suggested attire is what you would wear to a nice club or dinner. Suits/ties are not necessary.

What to See
I think the best session will be Session 5 on Thursday and the structured networking later that afternoon. Google’s Hal Bailey will be at both, and he agreed to participate before Google announced it was going to start competing with DomainSponsor and other domain parking companies. It should be interesting to get his perspective — if he is willing to talk about it.

Thursday Night’s Party
Thursday’s party is a benefit at the Playboy Mansion. There are a few things you should know about the party.

First, be sure to remind your spouse that the only reason you’re going is because this is a benefit for AutismSpeaks.

Second, see “what to wear” above.

Third, DOMAINfest attendees won’t be the only ones there. DomainSponsor is the lead sponsor, but other organizations are involved.

Fourth, there will be a number of celebrities there including Brady Anderson (Cleveland Indians), Kenny Lofton (Cleveland Indians), Jose Canseco (not a typo), Clyde Drexler (NBA star), Sugar Shane Mosley (boxer), Bernard Hopkins (boxer), Brian Bosworth (NFL), Orlando Jones (actor and comedian), and a few others.

Review and rate domain name parking companies at Parking Judge.

[UPDATED] Oversee.net Lays Off 18% of Staff

Andrew Allemann — Thu, 15 Jan 2009 20:43:38 +0000

Company lays off 18% of staff in preparation for “very difficult economic environment in 2009″.

Domain Name Wire has confirmed that Los Angeles-based domain juggernaut Oversee.net is laying off employees today. ~~From what we’ve been told it’s in the DomainSponsor division, but the layoffs may be more widespread. We are waiting on comment from the company regarding the number of effected employees.~~ [See Update] The layoffs come just two weeks before the company’s DOMAINfest conference in Los Angeles.

Mason Cole, Oversee.net VP of Communications, released the following statement to Domain Name Wire:

Oversee is reorganizing its businesses because it expects a very difficult economic environment in 2009. As part of the reorganization, we have had an 18% reduction in force, including some managers.

Oversee will focus over the next year in the areas where it has a leadership position. Going forward, areas of focus include: Domain name monetization, Domain name aftermarket, Registrar, and Travel.

Accordingly, we’ve discontinued activity or investment in areas that aren’t as promising (mortgage, for example). The reduction is a result of the refocusing on key areas.

In August Oversee.net laid off 10% of its employees across its divisions including DomainSponsor, Snapnames, and Moniker.

Since then the domain parking business has continued to deteriorate. Current revenue from domain parking cannot justify previous staffing levels at many domain parking companies. Other divisions of the company are also likely hurting, including NameKing. The previous layoffs occurred under the former company president Lawrence Ng. This is the first round of layoffs under new president Jeff Kupietzky.

Oversee.net is not the only domain name company cutting employees. NameMedia trimmed its workforce near the end of last year, and domain registrar Tucows cut 15% of its staff in November.

Review and rate domain name parking companies at Parking Judge.

The Google Squeeze: How Google’s Black Box Affects Partners’ Revenue

Andrew Allemann — Thu, 15 Jan 2009 15:29:30 +0000

Google’s black box of ad pricing makes it impossible to understand if partners are getting a fair share.

When Google (NASDAQ: GOOG) offered a “direct to consumer” domain parking option last month, many cheered. “Finally, we can cut out the middleman!” they exclaimed. But others worried about potential downsides. Specifically, domain owners realized that they have little bargaining power with Google compared to parking companies that aggregate significant traffic.

Google’s Domain Parking Agreements

To better understand how Google can squeeze its partners, it’s important to understand the deals Google has in place with partners such as DomainSponsor, NameMedia, and Sedo.

These contracts are confidential. But thanks to NameMedia’s (since aborted) attempt to go public, we can peek inside a Google Adsense contract. Here are some things to note:

1. There are three types of feeds: Adsense for Content, Adsense for Domains, and Adsense for Search. Adsense for Search is the search feed from Google. This ad feed can be called anytime someone types a search query into a box on a parked page. It is also called if someone clicks on a link on a parked page labeled “Related Searches”. I’m still unclear as to the difference in ads shown on Content and Domains, but these ads can be shown on the landing page of a parked page or on additional pages. If you have a one-click lander with Google, all of the ads on the home page are from the content or domains feed.

2. Parking companies get a higher revenue share if they send more traffic. The NameMedia agreement has three tiers, which presumably pays a higher percentage of revenue to NameMedia if it sends a greater amount of revenue to Google. (Note that it is based on revenue amount, not traffic amount.)

You may be thinking “Great! The parking companies have negotiated certain revenue share percentages with Google that cannot be changed. We’re locked in.” Well, sort of.

First, this is one of the main concerns with going direct to Google parking and cutting out the middle man. You won’t have a guaranteed percentage, so Google can squeeze you whenever it needs to boost earnings.

Second, just because the percentage payout to the parking companies can’t change during the contract period doesn’t mean the actual amount paid out can’t change, as I’ll explain below.

An Elusive Revenue Share

Let’s consider how percentages mean very little in these agreements, and why Google may have an incentive to collect less per click on the parking pages even if it means Google in turn earns less per click.

In order to understand this you need to consider Google Adwords, the program that supplies ads to Google Adsense. Google Adwords Advertisers generally bid a maximum amount per keyword. But they also set a budget. For example, I may say “Bid $1 per click for these keywords, but I don’t want to spend more than $1,000 a day”.

At first it seems Google will want clicks on all pages — whether part of the Google.com or Adsense sites — to be close to the maximum price. But Google’s margin is much higher on Google.com because it doesn’t have to pay partners. So it has an incentive to have more of the ad budget spent on Google.com than at partners.

For example, assume an advertiser has a $1,000 budget and it is maxed out every day. Google could send half of the traffic from Google.com and half from the AdSense network at $1 a click. Here’s how much Google will make, assuming the partner has a 75% revenue share:

500 clicks on Adsense x $1/click x 25% = $125
500 clicks on Google.com x $1/click = $500
Total = $625 profit

Now, what if Google discounts the clicks on Adsense 50%, arguing they aren’t worth as much as those on Google.com? The advertiser still wants to spend $1,000 a day. So the rest of the traffic goes to Google.

500 clicks on Adsense x $.50/click x 25% = $62.50
750 clicks on Google.com x $1/click = $750
Total = $812.50 profit

As you can see, Google needs to merely shift the budget toward its own properties to earn more money. The advertiser gets more clicks, too. Google can pay the same percentage to parking companies but pay less per click, while at the same time making more money for itself.

Note that this is against Google’s stated goal of offering the best deal to the advertiser. If both Google.com and Adsense convert at the same rate, the second option gives the advertiser more conversions. But a third option of all Adsense traffic would be the best for the advertiser, but the worst for Google: it would only earn $250.

Is Google squeezing us already?

A lot of people cite Google’s Traffic Acquisition Costs (TAC) metric to show that advertisers are getting less. But the metric says very little about partner payouts. Here’s a graph of TAC updated in Q3 2008:

Above: a graphic that means a lot to investors but little to partners.

The blue line represents Google’s expense for traffic as a percentage of advertising revenue. The green bars primarily represent the amount paid out to traffic partners.

Many people point to this falling percentage — 37.2% in Q1′05 and 27.9% in Q3′08 — to show that Google is paying its partners less. But this number means very little, because we don’t know what percentage of traffic is generated on Google.com versus Adsense sites. In fact, you can see that Google is actually paying more to partners now than before. But again, without knowing the actual traffic amount we know very little.

Indeed, revenue on Google.com and other Google properties increased 34% in Q3′08 compared to one year earlier. Revenue on Adsense increased only 15%. But this is revenue, not traffic, so we still don’t have much insight into if Google is paying more or less to its partners. It’s a black box, and only Google knows what’s inside.

A Ticking Time Bomb
There’s one other thing that could drop parking partners’ shares of revenue overnight faster than a gradual squeeze.

In the NameMedia agreement (and I’m told the same goes for other agreements) Google retains the right to eliminate the search ad feed. Search ads generally pay more than content ads. So overnight, domain owners could see a massive drop in revenue. Google is required to provide a replacement feed to NameMedia if it removes the search feed. If the replacement feed doesn’t perform within x% of the search feed, NameMedia has one recourse: cancel its agreement with Google.

Canceling the agreement doesn’t seem like a good alternative.

Should we bite the hand that feeds us?

For all of the complaining about Google, keep in mind that without Google the domain industry would be a shadow of what it currently is. Google’s ad network has propelled the parking industry to where it is today. Should we not complain about Google’s market power? Should we be thankful for what it has given us and not question its motives?

It’s a tough question. We know our parking revenue is dropping, but is it because Google is squeezing us? Because it’s a black box, partners’ relationships with Google are based on trust. And Google has been losing a lot of trust. Notifying parking partners of a drastic change in competitive strategy just a day or two in advance doesn’t build trust.

It’s good to question authority. Which is why we shouldn’t all run out and thank goodness that Google is cutting out the middleman.

Review and rate domain name parking companies at Parking Judge.