Sedo: “Unintended Consequence” For Traffic Aggregators

A few minutes ago we heard back from Sedo in relation to our story yesterday. As such we are posting their feedback in full below:

“We can confirm that Google is one of Sedo’s advertising partners, but cannot confirm that they are the source of the change.“

When asked about the effect of the decision on traffic aggregators, Sedo responded:

“As an unintended consequence, it might make things a little more complicated for traffic aggregators.  However, with these changes, it’s a great time for customers to re-evaluate things to make sure aggregators add value for them.  Some may opt for a stronger focus on increasing the domain sales portion (alongside their parking revenue).“

So what do you think? Is this a measure to:

1. Shut out aggregators, or at least make things more difficult for them?

2. Get “quality traffic” to their parking pages?

3. Reduce click fraud (thanks to Acro for the comment yesterday).

What are your thoughts on this? Post a comment and let us know!

Sedo Flags Possible Changes In Advertising Provisions

Early this morning I received an email from Sedo regarding possible changes to the way their “primary advertising provider” monetizes Sedo parking pages.

I’m going to take a wild guess here (I could be wrong) and say that “primary advertising provider” is code for Google, although Sedo does not mention the name of their “primary advertising provider” anywhere in the email.

Here is a brief extract:

“Based on current discussions it is possible that our ad provider will cease its provision of advertising to URL-parked pages and in consequence only support DNS parked domains.

This step is considered by the online advertising provider in response to advertiser feedback and would affect all URL-parking customers at all parking companies worldwide that share this advertising provider.

This change could happen in the near future (potentially as early as the fourth quarter of 2010) and we wanted you to have this information in advance to take into account for your internal planning.“

What’s The Issue?

Let me cut through the spin and give you some context:

1. Traffic aggregators such as Park Logic, KeyRPM & Above use URL forwarding (amongst other techniques) to send traffic to multiple parking companies. URL forwarding allows them to quickly point the domain somewhere else, and therefore identify who is paying the most for a particular keyword. This is essentially an arbitrage opportunity. The problem for both the advertisers and parking companies, is that it makes their traffic numbers (and therefore their revenue line) less predictable.

2. There is certainly “no love lost” between parking companies, traffic aggregators and ad companies like Google. Yahoo. All of them take a slice of the parking pie!

What Does This Mean For Me?

Given the current environment, its a bit of a strange strategy for a “primary advertising provider” to undertake. It seems like its a demand, eg: “you are either with us or against us”.

Here is the bottom line, if you use traffic aggregators, you better make sure they support changing DNS (nameservers), so that you can still use parking companies that rely on the Google advertising feed (such as Sedo). For those that use KeyRPM or Park Logic, you are fine (they support changing nameservers) and I confirmed this with both companies today.

For the record, I have tried to contact Sedo for a comment and will update this post if/when I hear back.

Google Loses Domain Arbitration To Canadian Start-Up

Announced today, the National Arbitration Forum has dismissed Google’s complaint that it was entitled to the domain name, Groovle.com.

Young Canadian entrepreneurs Jacob Fuller and Ryan Fitzgibbon, launched the web site in 2007, to provide users the ability to upload photos and customize their Internet start page.

Jacob Fuller stated “Google never had anything to fear from our web site. The arbitrators’ decision that the two domain names are sufficiently different should put Google at ease and we look forward to a renewed positive relationship with Google.”

Google Gets Googblog.com Back From Indian

Another day, another WIPO (World Intellectual Property Org) case. Google vs Harit Shah for the domain name googblog.com. For some strange, unforseen, unknown reason, it was apparently too close to the Google trademark. Who would have thought?

Shah said, “I was in a bad faith that I can legally keep the domain googblog.com. I really did very unfair to Google. I sincerely apologize to Google for infringement by misusing their intellectual property.”

Via: SiliconIndia and TMC.

Why You Should NOT Get Into Bed With Google …. Yet

With the news that Adsense for Domains is now available to all publishers, it may be tempting to think “Screw my parking company – I’m leaving and going direct”.

Before temptation takes over and you jump into bed with Google, think about what you are doing:

Weakening An Industry – Ending Collective Bargaining

Parking companies negotiate rates with Google. Think of it as collective bargaining in the context of a union. What Google has essentially done, is to commence a breakup of an industry, which in the long run will weaken it. If you look at past behavior, I’d suggest they will:

• Establish their own rules
• Decrease payouts over time once they get a handle on where the traffic is

Landing Pages Not Optimized

• The Google landing pages are not going to convert very well (see the image below). I’d assume they will update them over time but right now you might be better off financially, by not moving.
• Parking companies spend $$$$ on optimising landing pages, getting the right graphics, colours etc.. so the page can convert. Its in the parking companies interest for your portfolio to work. If they make $$, you make $$$.

Customer Support

• If something goes wrong, or if I have a question, I know I can call my Account Manager and get a response within 24 hours. Good luck in getting this from Google.

Long Term Strategy and Intent

So how does Google monopolise Internet traffic increase profits? Google analytics knows about your traffic flows. Adsense and Adwords tracks advertising and what you click on. Google search knows what you search on, GMail knows the contents of your emails. All this information is stored and used by Google. The big unknown for Google is obviously anything outside its network. In this case its direct navigation (type it in traffic).

What happens long term when Google knows where your traffic is coming from and decides to alter search results, payouts and change traffic flows? If your domains depend on links from other sites, why wouldn’t Google cut YOU out, because you are the middleman!

Domains You Can’t Park With Google

In case you didn’t know, Google has restrictions on the keywords found in a domain. “Terms in the URL may not contain or be related to any of the following:

• Pornography, adult, or mature terms. This includes, but is not limited to, any terms that refer to or suggest nudity, partial nudity, sexual imagery/acts, lewd/graphic or profane language.
• Violent or racially intolerant language or any other form of hate speech directed against an individual, group, or organization
• Excessive profanity
• Illicit drugs and drug paraphernalia
• Gambling or casino-related content
• Weapons, such as firearms, ammunition, balisongs, butterfly knives, and brass knuckles
• Beer or hard alcohol
• Tobacco or tobacco-related products
• Prescription drugs
• Promotion of an illegal activity or an activity that infringes on the legal rights of others.
• References to tragedies or other sensitive current events
• Any other terms that are illegal, promote illegal activity, or infringe on the legal rights of others.

Summary

I believe that competition is good. Some of the greedy parking companies will probably reduce their % as people will start to compare going direct with Google vs the parking company. That’s good for the industry.

Right now I wouldn’t do anything. It’s a “wait and see” approach for me. The big question is will Yahoo and MSN follow?

Microsoft Cries – Google & Yahoo Get 90% Of Net Ads

Microsoft senior VP-general counsel Brad Smith told the US Senate and House judiciary committees:

“Never before in the history of advertising has one company been in a position to control prices on up to 90% of advertising in a single medium.  Not in television, not in radio, not in publishing. It should not happen on the Internet.”

Of course Microsoft is spewing that they “missed the Internet” back in the 90′s, failed to grab any substantial advertising market share during the dot com boom and then failed again in 2008 with the Yahoo deal.

So if the US government say no to Google, then why wouldn’t it be anticompetitive for Microsoft to own Yahoo? What’s this mean for domainers? Two players owning the entire advertising market! Can you say collusion kids? Ok – it means lower payout rates and a HUGE barrier to entry for a 3rd force.

What Does Google Benchmarking Mean For Domainers?

That depends on what Google does with the data. Think about this scenario:

“Bob” is a GMail user and uses the Google search engine. Google knows:

1. What Bob is searching on via a cookie on his computer. (if he types a url that doesn’t exist into the Google toolbar, that URL gets sent to Google).
2. What domain names he visits (Search + Analytics).
3. Who owns those domains (Google is an ICANN-accredited registrar).
4. What pages he clicks on (Analytics) .
5. What ads he clicks on (Adsense).
6. The content of emails he receives (unlimited data retention from Gmail).
7. Who is sending Bob emails (via “content extraction”).

Of course, in the recent email from Google describing benchmarking, Google said they want to provide “you with transparency, control, and new services”.  I think this was a typo made by Google, they should replace the word “you” with the word “Google”.