The humorist Mark Twain wrote in 1897 that the reports of his death had been greatly exaggerated. And indeed they had. Twain was only 62, and he still had many years of humor tucked away in that prolific cranium. Domain parking is not nearly that old, and many commentators are already writing about its death. Is it really dead? And if so, what killed it?
What is Domain Parking?
Domain parking is the practice of registering a domain name and then allowing a third party to place ads on a site located at the registered URL, so that any key-in traffic is captured and converted into revenue as people click on the ads. Some domain name registrars, like GoDaddy, park newly-registered domain names as a matter of course until those names are built out. I like to refer to this type of parking as passive domain parking. The registrant (owner) of the URL does nothing and receives nothing.
The next level of domain parking is what I call “affirmative” domain parking. It occurs when a third party actually takes active steps to create content on the “parked” name. Companies like Sedo, Trafficz, Fabulous, and Skenzo have been doing this, with varying degrees of success, for many years. Included in this level of service are companies that attempt to add content through social marketing and through automated means. They theorize that by generating unique content, they can increase their traffic and get better conversion on ads. The URL owner gets a portion of the proceeds.
In all domain parking, the exclusive ultimate source of revenue is ads.
Why Would Domain Parking Be in Danger?
Ad-sites have traditionally relied on two sources for traffic: search engine referrals and key-in traffic. Both sources of traffic are under attack.
Google and the other search engines have always been suspicious of ad-sites, but in recent history, Google has increasingly devalued (for search engine purposes) any sites that do not give Google patrons exactly what they are looking for on the first click. (If you’ve ever clicked on a search result and experienced the frustration of landing on an ad-site, you know why Google has moved in this direction.) In other words, Google wants its patrons to go from the Google results page directly to a one-stop site that either sells customers the product or gives them the information they want.
For product-specific sites, Google is looking for several things that indicate an actual one-stop site. First, the site must have a lot of content, so that Google can be confident the shopper will find what he or she is seeking. Second, the site has to continually be updated with new content. (In the real world of retail, inventories circulate and change.) Third, the site needs to contain elements that show an actual ability to sell products. In effect, Google is looking to see if there is an active shopping cart and check-out system, terms of service, shipping policy, security certificate, Better Business Bureau seal, and a list of credit cards accepted, along with hundreds of other indicators that the site is actually selling products to customers.
All these factors make it almost impossible for domain parking services to get Google’s respect. Sites parked with parking companies will never accept credit cards; they will never have a Better Business Bureau seal of approval; they will never list an 800 number or offer instant messaging with customer service representatives; in short, they will never do a thousand things that every actual product site does. Consequently, a parked site alone can never achieve great ranking in Google.
To make matters worse, Google has also dealt a severe blow to those parked sites that rely on key-in traffic, like URL’s that are either “keyterm.com” sites or slight variations or misspellings of commonly-searched keyterm URL’s. These sites do not depend on Google’s search engine for traffic (users type the address directly into the address bar), but they do depend on Google and other ad-propagating companies for the ads that are served up to their sites. In mid-2008, Google announced that it would allow advertisers to opt out of ad-sites. Presumably, these sites were directing poor-quality traffic to the advertisers, and they wanted to be able to avoid paying for those clicks, and the result has been devastating to domainers.
How Bad Is It?
Just visit any online forum for domainers, and you will feel a boiling sense of frustration as domainers seek a better return on their names. One almost detects a hint of desperation as some domainers try to find a service that will provide a return anywhere similar to what domainers received in the past. Switching from service to service, they often experience a temporary jump in revenue before dropping off again, leading to even greater frustration. Many are wondering if it’s just their portfolio, or if it’s bad for everybody. And if so, how bad is it?
2008 was especially bad for domainers for two reasons. First, Google’s “opt-out” decision gave advertisers a way to focus their advertising dollars, and many chose to avoid parked pages. Second, the overall economy was just dismal, and everybody is suffering. Summing it up, Michael Mann of WashingtonVC.com noted, “The most significant event for the domain industry in ‘08 is Google changing its relationships with bulk domain parkers so they earn less due to blacklisting, advertiser opt out checkboxes, and lower rev shares all around; secondly the crash of the economy overall has been limiting domainer portfolio valuations and corresponding liquidity options.” Commenting on the difficult year behind us, Ron Jackson of Domain Name Journal added, “The PPC (pay per click) business was the first to run aground, falling by close to 50%, according to most accounts.”
This is a stunning reversal, worse than the stock market crash, although few want to admit it. But the proof is in the proverbial “pudding.” Oversee.net, one of the leading players in the domain parking business, recently announced an 18% workforce reduction to go along with last summer’s 10% reduction. Other players have been acquired or have simply disappeared. Truly, the domaining industry is bad all over.
For many domain owners, revenues have not even justified continued registrations. Monte Cahn of Moniker.com speaking to DNJournal.com about domain portfolio owners in 2008 noted, “For the first time, many began to ‘cherry pick’ through their inventories and allow domains to expire that they normally would have renewed.” In other words, revenues had fallen so far that the costs of registering many of these domains actually exceeded those revenues.
Sedo CEO Tim Schumacher was particularly pointed in his comments to DNJournal.com about declining revenue numbers in 2008 and prospects for 2009: “With the negative trends accelerating towards the end of the year, registries like VeriSign posted lower registration numbers . . . and domain investors as well as domain companies saw their advertising revenues and their domain sales decrease. . . . While we at Sedo truly believe in the value of domain names, advertising numbers will continue to be weaker than expected unless the advertising providers will give the domain channel the dedication, transparency and freedom it deserves. . . . The theory that ‘domain names will always grow in value’ is a myth. Instead, smart buying and smart selling always was and always will be the choice of the successful ones. It’s pretty simple: if someone offers you a 100x (yearly!) multiple on a domain name, because he likes or needs the name, and doesn’t care about the traffic, go for it. A few smart companies have already made this a revenue stream, and more will follow.”
Is there a Cure?
The pervasive opinion in the industry seems to be that domain owners will never realize the full potential of their domain names until they start to develop their properties. Ari Goldberg of ESQwire.com told Domain Name Journal, “A significant trend I see is that domainers seem to universally recognize that in order to reap the super-value of domains they must ‘develop’ them. With domain parking revenues down across the board, the move toward development has become relatively less risky and costly (i.e. less parking revenue to lose). On the other hand, the type of development and a domainer’s capability to develop a domain is an entirely different story.”
He commented further, “There are great opportunities for a domain-less individual with industry-specific experience, technical know-how and connections to link-up with domainers lacking these qualities.”
In other words, for domainers, one great option is to find an individual or company that has the technical expertise, industry experience, and desire to build out domains for the URL owners. The company also needs to be willing to maintain and support the site, since most domainers are not interested in taking on a 24/7 job. To the extent there are any vendor relations or customer service, the company should commit to carry that burden, as well.
Of course, such companies are going to want a large part of the action, and the domainer choosing this path has moved completely away from domain parking to the relatively new field of domain profit sharing (DPS).
Domainers considering DPS should ask themselves, “what is my end goal?” If the end goal is to make money, they should compare the parking revenue to the supported projections advanced by the DPS company. If their agreement with an experienced DPS company ensures they can continue to control their URL’s, guarantees a minimum income stream (at least equal to current ad revenues and with performance benchmarks along the way), and offers a large upside, then domainers should seriously consider making the leap.
The best DPS companies take on the entire cost of building and provisioning a site and pay domainers a percentage of “total sales.” Domainers should avoid companies that offer only a cut of the “profit,” since profit numbers can be manipulated. Domainers should also be able to log in to their account to determine rolling sales numbers.
A DPS company should also have experience in the entire process. It should be experienced building websites, and it should be skilled at marketing those sites through every online channel, including search engine optimization. The company should have a history of working with manufacturers and providing top-level customer service and product support. It is even better if the DPS company has all these functions in one place, preferably state-side and in-house, where the teams can communicate and work together.
A domainer should especially make sure the DPS company has a history doing business online and that it can perform its promises. The total percentage payment should not be the sole governing factor. Remember that ten percent of $5,000 in sales is much less than 3% of $200,000 in sales.
There is No Cure
Mark Twain lived for 13 years after newspapers first reported his death. Unfortunately for many domainers, it seems that the prognosticators may indeed be correct this time. Domain Parking may truly be dead. However, for individuals with great domains like product.com names, domain parking will not be missed, as such domainers will partner with DPS companies to convert those great names into truly productive properties.
Doug Marks writes for ClickShops.com, which operates dozens of product-specific websites and offers Domain Profit Sharing services to its clients at DomainProfitSharing.com.
Author: Doug Marks
Article Source: EzineArticles.com
Provided by: Digital Camera News
Domains names are more than just a useful address for storing and showing business or personal information on the internet, they can bee the difference between a successful and non successful business.
Selecting the right domain name, hosting provider and website design, plus website development is not a small job.
The domain name market
A study of internet businesses showed that most of them spend less than 2 hours choosing their domain name, web hosting providers or doing a detailed plan of their website requirements. This can only lead to problem later on in the website development process and could cost you a lot of money.
The report also said that 45% of those businesses thought that they had chosen the wrong domain name and could increase sale with a better name. No surprise there when they are putting less time into the decision than they do deciding on the venue for the office xmas party. Using domain names that are complex and too long for your customers to remember and you will miss out on traffic and valuable business emails.
Although there is much controversy around the whole domain name business one thing is for sure…can you really afford to let someone else capitalize on your company domain name or names. The number of domain names is increasing with most of them linked to geographical locations such as .nl for Holland, .de for Germany and .FR for France.
These local TLD’s or Top Level Domains help to categories the internet and help the customer find a supplier in their own country.
Every country in the world has been supplied with a Top Level Domain and so you can imagine the choice of TLD’s is vast. There are also continental TLD’s that are now available such as .eu and .asia, again this allows you to have a presence in a specific area of the globe.
There are other TLD’s that are Global such as .com and .net and these tend to bee used by people or businesses who require a global presence. Of course this will also make them very sort after and extremely valuable.
There are constantly new TLD’s coming online all the time for example we now have .mobi domain that are primarily for mobile devices .xxx for the adult industry.
Many other domain names are in the pipeline and I’m sure will eventually cover most categories from .clothes to .cars. This idea is generally to help make addresses more relevant.
How Domain Names Work
Domain names are a shortcut to a designated Internet address. The internet works by giving every device that is connected to it a unique identification number called an IP address and packets of data sent to and from that device are marked with that ip address.
IP addresses are not the most friendly of address to remember and can bee up to 12 digits long so the number is converted into something we all understand, “domain names” They are used as direct links to web and e-mail servers. If you Type 216.109.112.135 into your browser you will find that this takes you to yahoo.com as a good example.
The domain names and IP Addresses that are relevant to your searches are stored in a domain name server or (DNS). So when you type the URL you want to find into your web browser, your computer sends a request to the DNS at your Internet service provider in order to find the IP address of the web server.
Once it has the correct address it can talk directly to the web server and you can search the site for as requested. I quick way to find the ip address of any web site is to use the ping command. Go to Start – Run and type, for example ping yahoo.com into the box.
A small window will appear with the IP address of the web server. There are also many great domains that supply this service and more, try ip-adress.com and see what I mean. Knowing this can help you understand why you will get delays when you register a new domain name and web site or any changes you make to an existing web sites dns settings.
The DNS information need to propagate correctly and this can take up to 24 hours for all the DNS servers globally to update and list your new domain setting that hold your website.
Who Controls Domain Names?
Domain Names are controlled by an organization called the Internet Corporation for Assigned Names and Numbers or ICANN. They are responsible for deciding how the internet TLD structure should look and what TLD’s should be used.
ICANN is a non-profit organization acting under the authority of the US Government, Department of Commerce.
Although ICANN make the big decisions on what TLDs are available, each TLD or country has its own domain registry.
Nominet for instants looks after all .uk domains and decides on the structure and release of the UK’s second level domains. Second level domains can be useful for a country and can include many variables such as .co.uk, .sch.uk and .me.uk.
Registering A Domain Name?
To register a domain name, there a few thing you need to know. First need to check that the domain name you want is still available.
The easiest way to do this is to just go to the top of this page and use the domain name search box supplied. Anyone can register a domain name within the framework of allowed suffixes provided it isn’t already taken.
There are some restrictions on TLD’s such as .eu, .us and .Asia requiring to registrar to reside within a specific geographical location. But be careful in your choice of domain name, although there a few restriction on registering a domain name this does now mean that someone may not consider they hold title of the name.
This could result in a person or company taking action against you through the disputes tribuneral in order to protect their names and trademarks or worse still take over your domain name. This is known as cyber squatting – where an individual as registered a domain name purely in the hope they can sell it on or cause disruption or brand damage to the rightful owner.
Domain Auctions
If the domain name you want is not available it’s still possible you may bee able to buy it. If the domain name does not have a web site you can find out who owns it and contact them about the possibility of purchasing the name from them. There is nothing stopping you doing this and it is perfectly legal to do so as long as both parties are in agreement.
To find out who owns a domain name you can do a search on websites like whois.net A search with Whois will show you details on who registered that domain, their name, address and contact details. Once you have decided on your domain name or names you need to contact a domain registrar. Domain registrars are approved companies that can register domains on your behalf.
It pays to shop around when choosing your domain registrar and often several are needed depending on amount and type of TLD’s you wish to purchase. Prices can vary widely due to the global nature of the web. It doesn’t really matter where the domain company is based and big saving can be found by selecting a registrar based overseas.
Once you have successfully acquired your domain name you will want to setup your web site, before you can do this you need to research web hosting providers. They will supply you with a web hosting and email hosting package. This basically means that you have hired web space on that companies web servers.
The beauty of owning your own domain and setting up a web hosting account is that it will give you full control of how you want you domain structure and control over the email for that web site and domain name.
Web hosting providers and the services they supply could be a whole article in itself but I will not go into to much detail here. Basic web hosting packages supply you with about 50MB of space and usually there will bee bandwidth restriction on the amount of data you can downloaded per month.
You need to spend a little time working out exactly what your site will be doing and what kind of services you require. It’s no use paying $100 a month for a dedicated server just to run a word blog that’s updated once a month.
New category-based TLDs are coming online all the time and available for the general public to register. When a new TLD becomes available, there is a period of time where businesses get the chance to apply for domains to register that they consider as their trademarks ahead of the general public.
The .asia TLD is going through this process now. During this ‘Sunrise’ period, companies and individuals have the chance to apply for specific names or trademarks before the general public. The sunrise period lasts for four months and names that are not allocated in this period are opened up to the general public on a first come first serve basis.
There is now an entire industry setup to help you get your name from these situation and it is called the pre-registration scheme. For an extra fee you can be top of that companies attempt to secure your name. Depending on the name and amount of interest this process can be a good way of ensuring your domain name or names.
Some companies use a slightly different approach and start a pre or post auction on the domain name they manage to acquire. Great business when you think of it, if they manage to register hosting.eu or hosting.asia for $15 then auction it to the highest bidder they can make themselves a lot of money for very little work.
This in itself is a very contentious issue but until the different governing bodies get their act together you have little choice to play the game. If you do find a company that will pre-register your domain name for a fee make sure they ensure a full refund of all fees if they are not successful in registering your chosen name.
The pre-registration service is not officially recognized by the domain registration organizations and so you have no rights to that name until it is fully registered.
Brian Harrison is a writer for Bee Ltd a domain acquisition and development company that has many years experience in the domain name and internet market. You will find many useful articles and advice on all manner of subjects associated with domains names, SEO and web development at our site: Bee.eu
Author: Brian Harrison
Article Source: EzineArticles.com
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