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.