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?

Michael Gilmour Talks Risk – Traffic DownUnder 2008

Michael had a fantastic speech and covered off a variety of metrics and calculations. Keep your eye out on Whizzbangsblog for the presentation. In the meantime here are some key points:

Risks vs Business Models

• Risks depend upon the business model being adopted.

• Each business model has its own risk profile that will or will not suit the domain owner. For example: stock items, high value sales, traffic and development.

Risks To The Domain Name Industry

• Advertising aggregators (Google / Yahoo)
• Traffic Aggregators (Parking)
• Domain Sales Models
• Regulatory and Legal

Regulatory and Legal Risk

• Every domainer needs to evaluate their portfolio from a legal risk perspective.
• Asset protection is crucial to long-term success.
• ICANN & Registries will change the rules.
• Get rid of those domains that are unprofitable and with legal risk

Revenue Share

• Google is paying less for traffic
• Based on calculations looking at the mean (curve) the average cost of traffic is 27.9% (what Google pays network partners) and the domain Industry gets 17.6%

Rules For Dealing With Advertisers

• Quality: Google and Yahoo will smart price your whole portfolio up and down.
• Watch out for fraudulent behavior.
• Do not put high paying non-performing keywords on high volume low CTR traffic.
• Match advertisers to traffic.
• Its no longer good enough to set a keyword and never touch the domain again.
• Think about how our behavior effects the advertiser.

Measuring Performance

Parking companies use different metrics. For example, how is an IP address measured?

• 18 Hours – Parking Company 1
• 24 Hours  – Parking Company 2

Letting Go Of Your Domains

I had to make a few hard decisions this weekend, both of them philosophical in nature when it comes to domain name investment.

I backordered two domains (com and net) last year that were closely linked together by topic. Both of them were parked at a well known parking company. While both domains got a bit of traffic, they just werent converting. To be honest, I probably could have sold them on DNF for $XX, but I just don’t have the time.

Another domain name I won at auction many years ago has been declining in both traffic and consequently revenue. In 12 months to date its made US$4.50 on a very popular topic. In my book, that’s not enough, so I decided not to renew any of them!

The domain names are now gone, expired, thrown back into the drop. Some domainers that I know would have a heart attack and say “But you could build a site around X and use Adsense and blah blah blah”. But do you *REALLY* have the time to do this? Are you *REALLY* going to do it anyway?

What are your thoughts on this? When do you draw the line and say, enough is enough?

Exclusive: TDNAM Explains 7-Day Grace Period

Ever purchased a domain name using Godaddys TDNAM auction site, only to wait 7 days until it was transferred to you?

This happened again to me last week. I won an auction for a .us domain name. Now, I wouldn’t normally buy a .us domain. This is in fact my first, however it was a single English word AND was also being used as the name of a product line. How could I not buy it? So what happened?

Date Won:      9/8/2008 12:28:00 PM
Yours On:      *9/16/2008 12:00:00 AM

The domain name I won was parked at Godaddy when I purchased it. I must admit, I was quite irritated by the fact that I have to wait 7 days while the parking revenue, from a domain that I purchased, went to Godaddy. As I type this; 6 days later its still parked at Godaddy.

The 7-day grace period has been discussed in many forums, but without an explanation from Godaddy. As such, I asked Godaddy for an official view on this particular issue. While I’m not going to name specific individuals, Godaddy was both highly professional and very responsive.

Here is their unedited view, in full:

“When a domain name expires, the original registrant has a 42 day grace period to renew or redeem the domain.

If the customer has not renewed the domain name 26 days after expiration, the domain is sent to auction through TDNAM.  The auction for the domain runs from the 26th day to the 36th day of the domain’s expiration.

As the original domain registrant has 42 days to renew or redeem the domain, there is a 7 day grace period from the end of the auction (day 36) to the day the domain is no longer available to the original registrant.  While there is a chance for the domain to be renewed by the original registrant, many auctioned domains bid upon are awarded through TDNAM.

When a TDNAM bidder enters an auction for an expired domain, TDNAM states on the bid page (as part of the terms and conditions) the original registrant still has the opportunity to redeem the domain name.”

There you go. It’s pretty self explanatory. If I was to summarize it, I’d say that buy the time a domain expires, Godaddy has a buyer and cash in the bank from a) parking revenue and b) the auction process.

While it might irritate people having to wait 7 days, when you take the time to understand it, it makes good business sense. That’s Bob Parsons for you – which is why I have his 16 Rules for Success poster on my wall.

Network Solutions, Backorders & Parking Revenue

A couple of hours ago I won another NameJet auction – nothing new there. However, the domain was registered at Network Solutions. Alongside the NameJet auction email was another one from Network Solutions telling me that I’d won the name and that it was renewed and transferred to my account – good.

Like a kid in a candy store, I quickly visit the Network Solutions website to check that everything is ok – but I can’t – their web site isn’t accessible. Grrr… Unfortuantely I can’t make any DNS changes to park the domain name. But then again, should I even have to? If you use Snapnames, you can go into your settings and nominate default DNS servers. Not in this case – I won using NameJet! Network Solutions has my beautiful domain name, parked with their ads! Noooooooo!

Lets look at their cashflow model:

1. Sally buys name at Network Solutions = $$$
2. Sally doesn’t renew her name
3. Network Solutions provides NameJet with the ability to auction the domain name = $$$ ?
4. John wins the auction and pays NameJet = $$$
5. The domain name is parked at Network Solutions until the owner changes the DNS = parking $$$
6. The domain name is renewed by the new owner = $$$

How the role of a domain name registrar has changed!

What The Future Holds For Domainers

The domaining industry is still in its infancy. With that, comes a variety of issues that impact upon private domainers, domaining companies and those that feed from the industry. Some of the issues that come to mind include:

• Lack of understanding of the industry amongst the media and the general public.
• Introduction of legislation by governments.
• Trademark and copyright issues.
• Lack of active industry associations.
• A few bad eggs….

Over the next few weeks I’ll be discussing these issues at length and what we can do as individuals and as a group, to combat these threats.