Is there a .co.uk "Marchex"?

[afx]

The games has changed since Google and the parking companies decided to steal a much greater cut of the pie (blaming the recession, which we all know is total bulls**t) than they were previously. Yahoo feeds to the likes of Frank Schilling and Parked etc. took the same hit. Partly out of greed and partly to stay alive and make their company worth it to any MS deal.

Google's 1.7 billion dollar profit (27% increase) in one quarter came entirely from Adwords spend, so to to blame the recession / lack of advertiser spend is laughable. Google keeps an extra 27% of advertiser money, agreggators then keep 27% to make up for what they lost at the publishers expense, and there you have it in IMO; the reason for the 54% decline in PPC. A figure (roughly) most would agree is about how much PPC has plummeted by.

There would be plenty of City money available for portfolio buyouts if the assets whilst maturing earned via PPC on the way. These companies take the 30+ year view and if the numbers added up it's a no brainer, but they dont anymore, largely due to the above and search becoming the dominant method of finding sites. Users are also getting more savvy and IE8 is doing it's best to take users away from your site if configured with default settings, which it will be for most users which also doesn't help.

The smart Chinese fella, bought everything at the right time and sold everything at the right time. It's well known Marchex have big time buyer remorse. Every method they've tried to monetise that portfolio to the extent they will see ROI in not too many decades has failed miserably. I doubt there will be another one of these types of buy outs until the upstream advertisers and aggregators stop offering such shitty price per click to the publisher. Especially when we know for a fact the adevrtiser is often paying 10 to 15 times for these terms than what you get paid as a publisher. (eg. 3 cents of a Euro for a loan name click via Sedo or ND)

So now wee see the big players, Name Admin Inc. Marchex, Kevin Ham, Nokta etc. for the first time having to sell names as renewals costs are now a serious threat to remaining in business.

Looking at what went on recently at Snapnames, I think this clearly demonstrates the need for this industry to be regulated with full transparency. The PPC game is totally rigged, the agreggators and the upstream providers see all the cards, you as a publisher get to know nothing and are ripe for exploitation and when Google can make Billions operating this way and aren't breaking and laws, this will continue to happen.

 

[Edwin]

I wonder if there's an opportunity for a larger company to focus exclusively on domain sales as its primary business model. Marchex for instance has gone down the parking route, then the "mass development" route.

But I wonder what would happen if they (or any other company with the resources) had invested in setting up a (say) 5-person salesteam who did nothing but prospect for end-user buyers for generic domains in their portfolio all day, every day.

I wonder how much sales volume such a full time team could actually generate via fax, email, phone and snail-mail? The costs per domain (excluding wages) need not be very high, even if you end up emailing 10 parties, faxing a dozen more, playing a few rounds of email tag or even snail-mailing a lightly customised sales packet to the most likely prospects.

And what would the lead-gen to sales ratio need to be to make such an enterprise profitable? If the team were generating sales in the 2-5K price bracket (which seems to be one sweet spot as far as end users are concerned, from my limited experience - the sale I mentioned above fell in the middle of the range, for instance) then how many companies would they need to approach, in how much time, and for how much up front expense, in order to make one sale?

It may be that they go about this kind of thing quietly behind the scenes, but while there are many examples of companies using a "domain parking+" model to monetise their portfolios, I haven't seen much discussion of any using a sales strategy as THE model.

And yet, if they could crack the above process, they'd have access to a huge supply of domains since they'd be able to sell at "real" prices what domainers are selling to each other at rock-bottom prices (separating the wheat from the chaff at the buying stage, of course) so it shouldn't be very hard for them to continually replenish - or indeed even rapidly grow - their portfolio of names waiting to be sold.

Surely the above isn't that different from a b2b company which has to go out to find each new client for its equipment, instrumentation, software, whatever. The commodity in this case is a domain name, but the same principles of lead prospecting and closing should apply...

 

[stender]

Do you see any potential risks sitting on high value domains? I personally feel nervous holding high worth names for long periods. Call me paranoid but I always have something in the back of my minds saying sell. I know theres been plemty of new extension come and gone but
Can you envisage nominet or the government doing anything to damage the value of .co.uk domains that you hold?

 

[James]

Stender, yes I think there is absolutely a risk in putting all your eggs in one basket (not you specifically by the way, just in general)

 

[Nigel]

I think the recession combined with the huge drop in pay per click income stopped big portfolio buyers entering the .uk market. If you hunt around you might find someone willing to buy small portfolios i.e. under £100k but there doesn't seem to be anyone in the market for the bigger deals. I suppose if you were looking to exit the market you could break up a portfolio and sell it in bits, but the buyers would want a good deal and you might regret the decision.

To finish on a positive note, affiliate marketing has blossomed as pay per click has declined, and this has led to all types of product related domains being in demand as are any financial/service domains that can be easily developed with affiliate ads. So perhaps affiliate marketing networks might start looking at nice domain portfolios in the future.

 

[accelerator]

Do you see any potential risks sitting on high value domains? I personally feel nervous holding high worth names for long periods. Call me paranoid but I always have something in the back of my minds saying sell. I know theres been plemty of new extension come and gone but
Can you envisage nominet or the government doing anything to damage the value of .co.uk domains that you hold?

It's not beyond the realms of possibility. The other concern that I would have would be any new technology that changes the way people find information, which could affect the benefits good domains currently bring in terms of search engine position.

Rgds

 

[Nigel]

Do you see this changing as more and more people/companies move from parking to affiliate marketing? I deal with a company that sell tickets and while the business development manager welcomed affiliates he said that many people within the company saw them as somewhere between parasites and a necessary evil.

Parking is very inclusive but can you see it where merchants start to get choosy about which affiliates they deal with and squeeze the small players out of the market?

I think Frank and some of the other affiliate specialists might be better qualified to answer this. It looks to us that more and more companies are opening up their products and services to affiliates. Maybe some of them don't like having to do this, but it appears that this area is expanding and not contracting and domains that fit the bill should be in demand.

 

[retired_member12]

It's not beyond the realms of possibility. The other concern that I would have would be any new technology that changes the way people find information, which could affect the benefits good domains currently bring in terms of search engine position.

Rgds

For all its size and current positioning, Google's business model is a primative brute force method. Out go the bots, they bring back any old crap, it's indexed, and then it's stitched to their advertising model. Close those doors to Google, and their well dries up.
I don't think its fantasy to imagine a time when people & companies actually start to block Google from thier sites. The descriptive/product/services related domain names can then take on a more significant position as portals in their own right. It's a matter of where you see your sites, you may think you need Google today, but tomorrow it might be the other way around. If Murdoch has his way, that's exactly what will happen, which has all the appearances of being a good thing!

 

[aZooZa]

For all its size and current positioning, Google's business model is a primative brute force method. Out go the bots, they bring back any old crap, it's indexed, and then it's stitched to their advertising model. Close those doors to Google, and their well dries up.
I don't think its fantasy to imagine a time when people & companies actually start to block Google from thier sites. The descriptive/product/services related domain names can then take on a more significant position as portals in their own right. It's a matter of where you see your sites, you may think you need Google today, but tomorrow it might be the other way around. If Murdoch has his way, that's exactly what will happen, which has all the appearances of being a good thing!

I agree. Search is a model that has a a great deal of maturing ahead. Wolfram has an idea but it's currently way off course on a commercial basis. One- and two-word generics will rule long-term, but development is the key. Conversely, if you have the generic(s) and they're not developed, you may be ultimately penalised. PPC is not now a viable model IMHO. Any successful SE model has to be based upon development. Have some foresight: Google is not necessarily the yardstick of the future.

 

[crabfoot]

I am reminded of the man that invented the B&D Workmate - everybody he tried to sell the idea to turned him down, because they couldn't see the advantages.

The successful domainers are "Domain Detectors" - they can see worth in a name when most of the world cannot.

For some time, they have been making money by merely pointing out those advantages to people, then selling them a domain or two.

That sort of opportunity is now harder to exploit, because a lot of the easy to exploit domain names are used. Those people catching expired domains have merely found a way to extend the viability of the concept, but the days of "finding and selling" are numbered.

Future generic domains will have to be sniffed out very quickly, if one is to stay in front of the rest of the domainers, then exploited is some way to demonstrate the advantage of the name.

I can see a situation where buying a name and "proving it" will be the norm - domainers using SEO to drive traffic to the website of a prospective purchaser, who will pay commission for the traffic, and (hopefully) eventually purchase the domain.

There are still a couple of stages to go through until we get to that situation, but for monetisation PPC is losing out to aff sales at the moment. When aff sales start to die, that is when it comes to direct satellite site sales, to coin a phrase (if I have coined a phrase).

The Prophet Crabfoot has spoken - no liability is accepted if the spoke comes loose and the wheel falls off!