Google’s Adsense for Domains partners question Google’s moves.
In business lingo it’s called a channel conflict.
Imagine times were still good in auto sales and you wanted to start a Cadillac dealership. You paid Cadillac a hefty franchise fee, spent several million dollars building a showroom, and then bought a couple hundred cars as inventory.
Then one day Cadillac contacted you and said, “Thanks for all of your help. We’ve decided we’ll begin selling cars directly to the public, too. You’ll have to compete with us.”
Most contracts forbid these types of channel conflicts. And they certainly tread on ethical lines.
So it was rather surprising when last week Google announced it was creating a channel conflict with domain parking companies by offering domain parking directly to domain owners, which are currently customers of these parking companies.
Over the past several days I’ve had conversations with numerous Google (NASDAQ: GOOG) partners and sources close to Google Adsense for Domains to discuss the Google move. What I’ve heard is disturbing.
First, Google’s partners were mostly given a day or two of notice that this fundamental change would be made. Although that may be shocking, one partner quipped “that’s more notice than we would have received a year ago.”
Second, Google has been asking its partners for more customer data over the past year. It asked for account level information and said it was for purposes of controlling fraud. When parking companies were hesitant to hand over the data, Google assured them it had no interest in offering domain parking directly to domain owners, the partners told me.
With this in mind, some domain parking companies are wondering if Google has been reducing click revenue in the parking channel over the past couple months to artificially inflate its own results when it introduced the system. It may seem far-fetched, but when a company tells you it won’t compete directly and then does an about face, it’s natural to question its actions.
Some parking companies are looking at the situation as a glass half full. They say Google’s move legitimizes the domain parking channel. One company pointed out that domainers will finally realize that some of the things they blame parking companies for aren’t their fault after all.
I suspect there’s another side to the story. Maybe Google wasn’t happy with how parking companies were performing. But Google spokesperson Daniel Rubin would not respond to any specific questions from Domain Name Wire, only commenting “We think this will raise awareness of the space and benefit users, advertisers, and all domain owners.” (Note the clear omission from the list of those that will benefit.)
If what the partners are saying is true, you have to question Google’s “Do No Evil” motto. The company seems to be adopting business practices that landed Microsoft in hot water.
Steven says
I feel there is a deeper reason for them wanting the traffic directly. The “spread” was not the reason. I do not feel they wanted to cut out the middle man. Google has received lots of flack regarding the domain channel in the past. I think this is way for them to get more information and make better decisions regarding the domain channel.
I think they will be working on fine tuning click fraud and TM’s as things develop.
How have early trials been with their new program?
Rob Sequin says
Andrew, Thanks for digging into this for us. It is a big story.
I would be pretty pissed off at Google if I was one of their “partners”. Then I would be scared for my business. Where are the Google parking companies going to go? To Yahoo? Right.
Google knows what’s going on in the space. They will probably net payout the same directly to the domainers and keep their former middleman’s profit.
——
“Some parking companies are looking at the situation as a glass half full. They say Google’s move legitimizes the domain parking channel. One company pointed out that domainers will finally realize that some of the things they blame parking companies for aren’t their fault after all.”
This is as positive a spin as the parking companies can put on this?
1. The move legitimizes the parking channel. Yes but how is that good for the parking company?
2. “See? It’s not our fault”. That’s the other positive spin?
Yikes. This article reaffirms my thoughts that there will be 0 Google fed parking companies in the future. One month? Three months? Six months max.
Our only real solution is to develop our domains and get direct advertisers or sell our domains to end users.
Parking and adsense revenue AND Adsense For Domains is not the future.
RKB says
I am confused by your article: so google is hurting domainers with this move or just wanted to hurt parking companies or what?
I mean what exactly is the motive?
Is it a bad move and should domainers oppose it?
WQ says
>>”some domain parking companies are wondering if Google has been reducing click revenue in the parking channel over the past couple months to artificially inflate its own results”<<
Interesting angle.
I use Yahoo directly and have not seen anywhere near the drop in revenue everyone else speaks of.
So theres a chance this conspiracy theory can be right.
jp says
I wouldn’t really consider anything “far-fetched”
It seemed a bit “far-fetched” about a week ago, the idea that google would ever open up adsense for domains to everyone.
One thing is for sure, this will change something. Some people’s wealth is going to increase, and some will decrease. Exactly who and how, we can only speculate.
Andrew says
RKB – no one knows for sure. Domainers should have some concern that Google may try to push out the parking companies, and then because we don’t have any sort of bargaining power lower our payout percentages.
David J Castello says
Less than 2% of our revenue comes from Google Adsense and the majority of it is from our undeveloped sites. My brother and I have been saying the same thing over and over again for years. Develop your sites and deal directly with your own advertisers. Yes, it’s a lot of work, but anything is better than living with the fear that someone can pull the rug from under your feet at anytime.
Jonathan says
“If what the partners are saying is true, you have to question Google’s “Do No Evil” motto. The company seems to be adopting business practices that landed Microsoft in hot water.”
Can you say…
History repeats itself!
Again, can you say…
Absolute power absolutely corrupts!
And Google is all mighty atm 🙁
M. Menius says
The collective leverage of the parking companies seems to be the very thing that Google aim to rip apart. If domainers jump ship to Google and parking companies go under, then Google will be so much closer to a true monopoly on traffic (and advertisers). I suspect domainer revenue share, via Google, would steadily decrease if parking companies disappeared completely.
@Castello – “Develop your sites and deal directly with your own advertisers.”
This is my plan, David. And obviously a proven path demonstrated by PalmSprings.com as well as other geo sites, Skip, etc. I assume a significant investment of time in calling and local relationship building would be an early step toward making this happen. I need a few polished salesmen and saleswomen, or maybe just one really industrious one. 😉
WQ says
Its easy to shout “Develop!” but its not easy and not always profitable.
Many domainers have tried to develop and ended up going back to PPC.
And despite what many may say, PPC is here to stay.
Ricardo says
@WQ –
I believe you stated that you have a direct Yahoo feed and you haven’t seen any decrease in revenue.
Therefore, you don’t see the need to develop.
I know if I was solely depending on revenue from a Yahoo feed, I would be concerned about the future of Yahoo.
Personally, I hope Microsoft enters the category.
WQ says
>>I believe you stated that you have a direct Yahoo feed and you haven’t seen any decrease in revenue>>
I didnt say that…
>>Therefore, you don’t see the need to develop>>
I didnt say that either.
>>I know if I was solely depending on revenue from a Yahoo feed, I would be concerned about the future of Yahoo.>>
I never said I was solely depending on revenue from Yahoo.
And…its not just Yahoo…its the whole economy. You need to be concerned with everyone that you depend on for income.
Developed or not.
>>Personally, I hope Microsoft enters the category.>>
Me too.
Web76 says
@WQ – how does one get accepted into the same type of program to “use Yahoo directly”? Is it still possible, or is it closed to new applicants? Invitation only? Got in years ago through Overture perhaps?
Anyone think Yahoo may make a similar move and allow YPN publishers to do the same?
Stephen Douglas says
Hi Andy,
I hope your readers have seen the movie “Tommy Boy”.
There is a scene (well, about a 300 scenes) that hilariously sums up the American mood at some of the unbelievably predatory and unethical practices used by “big name” companies we’ve all come to use, enjoy, and believe in.
For more information and amazing dialogue that dials in with the current domain industry situation, your readers are welcome to come to my blog, you know, the one you don’t want me to keep repeating every time I post. 😉
But here’s a freebie for your readers, compliments of “Tommy Boy”:
This scene is where Tommy is frustrated at his inability to make a sale. It occurs in front of his partner, Richard (David Spade), and a valuable distributor. Tommy and Richard had just hit a deer with their car on the way over, and decided to put it in the backseat to take to the vet even though they think it’s dead. They’ve been failing miserably with trying to sell a newly designed brake pad, and they’re under massive stress to succeed because their company will go bankrupt if they don’t make some sales. (Trust me, there are fifteen other classic quotes that lead up to this one):
The scene:
TOMMY (pulling at his hair and pacing the client’s office): Forget it! I quit! I can’t do this anymore, man. My head’s about to explode! My whole life sucks! I don’t know what I’m doing, I don’t know where I’m going. My dad just died, we just killed Bambi. I’m out here getting my ass kicked, and every time I drive down the road, I want to turn the wheel into a god—dam —- bridge abutment!
Suffice to say, Tommy doesn’t close that deal. Could Tommy be a domainer today?
How many domainers across our industry feel this way for one reason or another?
Tim Davids says
this is similar to walmart selling it own brand items next to “real” brands…when this first happened I’d have loved to be a fly on the wall of p&g.
My hope is goog gets too many irons in the fire and crumbles from its own weight
EM @ KING.NET says
I am one of the small business owners. It is a challenge for us to get the direct feed from Google for our domain portfolio. When they announce the Adsense for Domains news, this is no question an amazing news for me.
Of course, we are continuously developing our portfolio to generate revenue outside Adsense. Just like the proven approach of the Castello brothers. It will take time…
I hope the domain parking company have some backup plan in place.