Don’t get complacent; all is not well in the domain name industry.
What keeps you up at night? As a business owner, I have lots of worries. If you are sleeping comfortably at night, assuming everything in the domain industry is swell, you might be in for a rough 2008.
There are two main issues that keep me up at night.
First, I’m becoming more and more concerned about hucksters and deep-pocketed corporations coming after average joe domainer. There are a lot of criminals in this industry, and other people that take shortcuts, which unfortunately casts a negative view on everyone. Enforcement doesn’t just hurt the bad guys, it can also hurt the good guys.
There’s a little something we can all do to help alleviate this concern. Our main (only?) voice as an industry is the Internet Commerce Association. If it weren’t for ICA, we wouldn’t have a voice at the current ICANN meetings in India. I know I can’t afford to fly to all ICANN meetings, but together we can send representatives. Join as a member. It’s only $295 for a basic membership, and the return on this is phenomenal. I chipped in last week, you should too.
Second, nearly all of the ad revenue in this industry is concentrated with two companies: Google (GOOG) and Yahoo (YHOO). This means they get all of the control and there’s little to keep them honest. One change in policy at these companies could have devastating and far reaching effects on the industry. I’ve experienced this before when I saw income at Google Adsense drop from $1,000 per day to a couple hundred a day, and now worse. There’s no recourse and no viable competitor lining up to work with you.
This is one of the reasons I don’t like the Yahoo-Microsoft (MSFT) acquisition. Microsoft will (or should) enter the domain space soon, creating a third player in the space. The combination of the two companies would keep it at just two key competitors.
Do you think what’s in the best interest of domainers is in the best interest of Yahoo and Google? These two companies don’t necessarily think so. They care about long term profits and “user experience”. These companies can whether a short term storm. What would you do if your parking revenue took a major hit for two years? It would likely wipe you out. But it wouldn’t wipe these companies out.
Already we’ve seen one shoe drop. Domain Name Wire has learned through multiple sources that Ask.com’s Google feed will no longer be syndicated to parking companies as of March 1. A number of parking companies use this feed to augment other search results. I know that Parked.com uses it for traffic to some foreign companies, and apparently HitFarm and Skenzo use this feed as well. There are likely others. (Ask has not returned my calls for comment.)
Are other changes on the horizon? You bet. Buckle up.
Martin Edic says
Perhaps this just means that domainers have to start working harder by building real web sites with relevant content- why wouldn’t Google protect the quality of its results? It’s their core business.
I think a lot of domain investors have had a free ride and that those days are over. The upside is that a lot of money will enter the domain market when it appears to be getting more ‘legit’, i.e. dumping tasting, marginalizing parked sites with no content, etc.
Its been the Wild West but now the farmers and families will be moving in and settling the place…
@Martin you’re right, the people who can rest easier at night are those that have a plan beyond parking.
I agree. You know something is up when most of the top domainers are frantically trying to diversify their net worth.
Reminds me of the dot com bust all over again where VC dollars were your only source of revenue. This time the VC is Google and Yahoo giving domain owners a false sense security and value. Why doesn’t the domain industry come together and build its own advertising network so they can diversify revenue? ($1B industry) I have yet to meet a parking company who doesn’t think their customer is the domain owner and realizes their customer is the advertiser. Why? Because the industry is too lazy to go out and sell advertising direct!
Sammy Ashouri says
I’m already trying to get things together and see where my domains are going to be forwarded. No idea what happened with Parking panel starting February 2nd, but things went WAY WAY down hill since then.
@sammy – I think Parking Panel is on the Ask feed as well, but not sure why they would have lost it already
Sammy Ashouri says
And that’s what gets me wondering. If it’s doomed for them at the end of the month, why is Parking Panel taking a nose dive right now?
Been talking to at least 15 other people through MSN and they have seen the same trends. Posted on Namepros and got some PMs from people saying the same things.
I sent an e-mail to Diana and Britt of Parking Panel. Hoping to get things cleared up! This is major news… wondering why no one else is reporting on the issue.
@Sammy – I believe all of the parking companies with an Ask feed are scrambling to line up new feeds. Ask will still offer its own feed, but it will be nowhere as good as Google’s sub feed.
Sammy Ashouri says
Just received word from Parking Panel that it’s BS. Waiting on a follow up letter and will see what’s going going on.
Stephen Douglas says
This is why when I buy a domain, I don’t necessarily consider the immediate “PPC” earnings on it, but the value of the domain to an end user at some point. I’ve continually preached the need for the domain industry to focus on bringing in Fortune 1000 companies to start seeing the value of traffic from domains, and to buy them or rent/lease the traffic directly.
I don’t see Leasethis.com or Sendori hurting from google or yahoo shenanigans, this only legitimizes their goals even more.
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Sammy, all I know is that Ask.com’s Google subfeed is going away. I don’t know if that has anything to do with ParkingPanel, but if they do use the feed then it will affect them.
It’s dangerous for any business to be wholly reliant on one or two customers. Any domainer’s long term plan must include development. And as Stephen said, there’s a lot of money to be made in re-selling domains but you have to own the right domains (What Elliot calls a liquid portfolio).
David J Castello says
Every serious domainer should join the ICA.
On Feb 27th, my brother Michael, Josh Metnick (Chicago.com), Patrick Carleton(AssociatedCities.com) and I are flying to Washington DC to have a strategic dinner with ICA’s Phil Corwin the night before we all attend the ICANN/JPA meeting at the Commerce Department on the 28th. Believe me, there are many “creative” people out there formulating ways to try and separate you from your domains and we all need to start circling the wagons.
I am posting this comment since Skenzo’s name has been explicitly mentioned in the above article. Kindly note that Skenzo’s customer’s are NOT impacted by this change AT ALL.
@SkenzoRep – are you saying that you don’t use Ask’s Google feed?
@SkenzoRep – we have a domain portfolio with very strong traffic, up to 2 Millions Visitors a month. How we can get in contact?
Stephen Douglas says
Great article. My followup, with kudos and a linkback to you, can be seen at this little-known blog, http://www.successclick.com.
My comments may be a little disturbing for the “peaceful” types, those who might want to do a sit-in, or write a letter/email or two in protest. However, my response to your article is for domainers who have habanero in their blood.
I say it’s war.