Two Press Releases in a row:

Major Acquisitions Establish Internet REIT as a New Force in Online Advertising

Internet REIT (iREIT) [...] today announced its acquisition of the Netster.com web portal and major portions of the Netster domain name portfolio. Netster is the latest in a series of strategic acquisitions for iREIT, which has acquired over 50 portfolios of Internet traffic in the past fifteen months, including such high-value domains as Bands.com, OfficeSupply.com and AfricanAmericans.com. The addition of the Netster portfolio gives iREIT more than 400,000 domain properties under management and brings the company’s total portfolio of traffic up to 50 million visitors per month.

[...]

Direct navigation comprises more than six percent of the US and UK search advertising markets and could exceed $1.2 billion in ad revenue by 2007, according to Susquehanna Financial and RBC Capital Markets.

Top Investors, Industry Talent Rally Behind Internet REIT

Internet REIT (iREIT)[...] today announced that it has raised a new round of equity and debt financing led by Maveron LLC, the venture firm co-founded by Dan Levitan and Starbucks Chairman Howard Schultz. The round of funding also includes significant investments by existing investor Jacobson Family Investments (JFI), as well as Perot Investments, the investment firm founded by H. Ross Perot. With this round of funding, Dan Levitan, Managing Partner, Maveron LLC and Steve Blasnik, President, Perot Investments join the Board of Directors.

GoDaddy’s Bob Parson even invents a new term for traffic testing: Domain Kiting. Here’s a brief summary of the coverage:

• Bob Parsons: 35 million names registered in April. 32 million were part of a kiting scheme. A serious problem gets worse.
• In Bad Taste by John Levine
• How Kiters and Snappers Suck the Air Out of ICANN (email battles)

The main focus of the public concern is linking traffic testing to the price increase proposed in the settlement agreement between ICANN and Verisign.

Bob Parsons: 

Here’s why I chose to call it domain kiting. All of us are familiar with the illegal practice of check kiting. Quite simply check kiting involves taking advantage of timing and the banking system to generate cash that simply isn’t there. In many ways that is what domain kiting does. Domain kiting takes advantage of timing and the domain name system in an abusive and improper way to generate cash. 

There is one difference. The registrars that participate in this testing do have to float the amount of money needed to cover the registrations at the registry. While they do receive a refund for the names that are deleted within the 5 day grace period, the money is under the registry’s control. (He does mention this in this article, but I would like to underline the point that the money is under the registry’s control at this point.)
Bob Parsons

After a domain name is registered, a registrar has five days to cancel a domain name registration – i.e. drop the name – and get their money back. Domain kiting registrars abuse this rule and cancel the lion’s share of the names they register just before the five day period expires – so they get their money back. But then something unexpected happens. After names are cancelled or dropped, the domain kiting registrar goes out and immediately registers the same names again. The domain kiting registrar will then put the same simple Web site back up for each domain name, wait another five days and then cancel all the names again — just in time to get a full refund.

By doing this, the registrars do in a way put the money on the line, since it is held by the registry. Obviously this is more than the usual everyday traffic testing.

I imagine that this debate has not yet ended.

Let’s end this with a quote from Karl Auerbach:

As we see from the numbers, the actual cost (ed. per domain name registration) to Verisign is about $0.02 or less.  That does not seem to warrant the $7, or 35000% profit, that ICANN is allowing Verisign to charge.

How much is my domain name worth? Leapfish.com has created an automated free domain appraisal tool that evaluates the value of your domain according to TLD, search engine and archive listings, dictionary words in the the name, unwanted characters and domain length. Leapfish estimates the value of DomainEditorial.com to be $10,584.00. Of course that is way too little.

Apparently Marc didn’t like the results either.

[via Lifehacker.com]

Apparently someone at the Canadian Government has paid attention. On top of registering census2006.ca for the survey of the Canadian population which takes place every 5 years, they also secured some of the domains for future surveys. They even thought of registering some of the available counterparts in other TLDs (some of them with an invalid phone number, by the way). The budget apparently also included the purchase of some PPC ads.
Let’s count the score (I am looking for all domains matching the pattern “census2???” in some TLDs and included some additional variations (there are more)):

(more…)

USA Today featured an article on domainers and domaining yesterday: Domain names become premium Web real estate

The article features Amy Schrier’s private sale of blue.com in March 2006 for $500,000, which she originally purchased for $65,000 in 2002. She intends to market her formula for getting the most value out of domain names.

Also featured Ron Jackson of DNJournal, Lawrence Fischer of SmartName.com, Zetetic, Yesdirect/Buydomains, Rick Schwartz with his 3 hour domain name auction at TRAFFIC, which yielded 2.1 Mio Dollars, Ken Carey of Flint, the sex.com story and Benoit Deschenes of Montreal.

The sidebar of the article has five tips from Internet REIT on how to maximize your domain revenue.

• It is the week of the ever growing Targeted TRAFFIC conference in Las Vegas, so it appears that the industry is getting some of their news in a bundled fashion this week.
• LiveDoor, the company that had a lot of negative news due to possibly shade accounting practices issued an announcement from their Innovation Interactive subsidiary: They have release SiteParker, a domain parking system. It apparently is built based on the experience of serving advertising for their own 20,000 domains.
• Marchex purchased some assets of AreaConnect.com for $16 Million of cash and stock. While I am still not sure what exactly AreaConnect is (apparently it has 1 Million page views per month) it sounds to me like it would fit right into Marchex’ local strategy. The company also appears to have partner ships with yellow and white pages directories across the US and Canada, which could provide additional local content and targeted traffic for Marchex. (Press Release) While we are talking about Marchex, I should also mention that they did launch new page layouts recently (I like them) and actually announced them with a press release.
• WhyPark.com launched a new service that says that it’s not parking, but asks you to host your sites with them. You point your domain to their servers and set up the domains and corresponding keywords. A sample site is PCviruses.net. They charge almost $100 to get you going. I am not quite sure if this is a one-time fee, or an annual fee. Judging from the sample site the content originates from free article websites. Apparently they provide you with “hundreds” or “thousands” of pages of “fresh content“. There is a limit of 100 domains per account – they charge $99.95 in order for you to sign up for their service. You provide your own Adsense/YPN/AdBrite code. (Press Release)
• Bulkregister re-discovers their market niche and give it a name with this press release: Domainers. They have introduced “Magic Folders”, which allow you to sort your names in different folders and connect those folders with specific attributes, such as different nameservers, whois information or the like.
• Meanwhile Ben Edelman who told us how Spyware generates fake clicks shows us a possible use for his research in being the lawyer for a law suit against Yahoo!. (PDF of the suit)
• With all of these news we are all looking for a new forum to discuss all of this. And along comes DN Fish. Well, as long as it’s not DN Phishing, hehe. (By the way, dnphishing.com is still available.) Hardly any posts on there so far, though. (Press Release)
• Oh and yes, there are rumours about a cooperation between Yahoo! and MSN.

[via OnlineMediaDaily, ClickZ, SearchEngineWatch, Forbes, Peter Ejtel and others]

Hidden in a Wall Street Journal article on the value of domains and the space in general and “flashgames.com” in specific is the following line:

To provide the technology for offering upgraded content, Demand has also purchased eNom Inc., a large domain name registrar based in Bellevue, Wash.

“These domain names are really the raw land of the Internet,” says Fred Harman, managing director of Oak Investment Partners, one of Mr. Rosenblatt’s backers. “Richard is a real-estate developer, taking the raw land and developing it … We’re trying to liberate these domains from the cybersquatters and actually put them to good use.”

The venture has already acquired 150,000 domain names — including flashgames.com — and plans to aggressively acquire more.

Apparently this re-inforces the current trend to ‘develop’ parked domains by marrying actual content with the advertising.

Meanwhile Demand Media’s website is still rather sparse. So far (aside from a Flash intro) they have added a link to the scanned version of the article in the Wall Street Journal.

More details are found in eNom’s Press Release:

eNom, Inc., one of the world’s largest Internet domain name registrars, announced that it has been acquired by Demand Media, Inc., a new company headed by former MySpace.com chairman, and former CEO of Intermix Media, Richard Rosenblatt. Los Angeles-based Demand Media will broaden eNom’s offerings by developing proprietary content tools and technologies, as well as new online advertising opportunities for eNom’s clients.

With the acquisition, Paul Stahura, eNom founder and CEO, becomes president and chief operating officer of Demand Media. Terms of the private sale were not disclosed.

Demand Media, Inc’s Chairman and CEO Richard Rosenblatt, described by the Wall Street Journal as a “serial Internet entrepreneur,” ran MySpace.com’s parent company, Intermix Media Inc., and negotiated its sale to News Corp. for more than $650 million last year. Richard was also the founding investor and vice-chairman of Great Domains, as well as Chairman and CEO of iMALL, Inc. In addition to eNom, Inc., Demand Media, Inc. also purchased San Francisco-based eHow Inc., which provides niche content for websites.

Tomorrow’s Washington Post (I guess they publish their articles on early on their website) features an article on Domainers and the money they make. While the article does not distinguish enough between actual type-in traffic (for generic domains) and typos, the author appears to have done his research: He picked up on a current trend to make more out of those parked pages and also covers other trends from the industry, such as traffic testing and the growing trend to invest in valuable domains.
The Web’s Million-Dollar Typos

Some interesting quotes:

Industry analysts estimate that roughly 15 percent of all Web traffic originates this way.

Google won’t disclose how much revenue it is earning from ads on these types of sites, but chief executive Eric Schmidt said in an interview last week, “It’s a lot of money.”

Starting from an old article (dated July 21st, 2005) published at Computer Business Review, (and following a more recent entry on GoDaddy’s Bob Parson’s blog) I would like to touch a bit more on the topic of ‘traffic testing’ or ‘traffic tasting’ of domains. This topic has been discussed at ICANN meetings since last year and is also referred to by the name of ‘add/delete’ or ‘add/drop’ storms.

Pay-per-click speculation market soaring – Computer Business Review

(July 21st, 2005): There are close to a quarter of a million domain names a week being registered for just a few days, while people “test” the traffic potential of those names before discarding them, chief executive Stratton Sclavos (VeriSign) told analysts yesterday.

(more…)

Microsoft fights domain parking with their new Typo-Patrol, which is part of their Strider project. In other news: Microsoft uses domain parking to up their web server count and gains on Apache and Bruce Perens launches OpenSourceParking in order to add to the Apache webserver count.

In a preview page posted by Microsoft Research, they show some information about their new Strider Typo-Patrol. Their examples show parked domains (parked on Google’s Adsense for domains / Oingo, Domainsponsor and Sedo). In their examples they start off by mentioning a concern for adult ads under typos of family-type domain names, such as disnryland.com, which now appears to have been changed to a child friendly parking page. To protect users from “typo-squatters”, they have released their “Strider URL tracer” in order to protect your privacy. They will even protect you from traffic counting tools like Hitbox, Google Analytics and Webtrendslive.

Thinking about the history of Microsoft, their end user agreements and similar items, it seems quite surprising to me that they are now interested in protecting my privacy. Well, at least they want to protect me from their competitors. If you look at the detailed targeting available to advertisers in their new Adcenter, you know that they also like to hold data about you on their servers.

While Microsoft’s project is drawing a lot of attention they fail to mention how many of parked domains are actually hosted on their IIS server. As shown in the April web server survey by Netcraft, the domain Registrar GoDaddy has just moved 3.5 million hostnames from Linux to Windows. Since GoDaddy is one of the cheaper registrars, I would imagine that they also hold many parked domains – especially since GoDaddy parks all new registrations by default. Ah, and yes, not to forget: If you use their DNS, they take the free to park any sub-domain that you have not created a DNS entry for – basically they add “free” Wildcard DNS to your domain and point it to their own parking service.

And more related news: Bruce Perens announced that he has launched “OpenSourceParking.com“, a service designed to boost domain parking on open source software.

The project is a response to a large gain by Microsoft in the April Netcraft survey, with Windows’ share jumping 5 percent as domain registrar Go Daddy moved 4.5 million parked domains from Linux to Windows Server 2003.

So in order to correct the domain parking stats in the favour of the OpenSource webserver Apache, Perens is suggesting for everyone to park their unused domains on his new service, OpenSourceParking.com.

The first use of funds will be for operation of the parking facility: dedicated servers, bandwidth, 24/7 system administration. These are not large expenses. Programming and web design are donated. Funds in excess of that will be used to help create an effective PAC (political action committee) for Open Source / Free Software. Because it will be supporting a PAC, this project will not be eligible for IRS 501(c)3 non-profit status. A not-for-profit corporation will be organized when there are sufficient funds.

[via Netcraft, ZDNet and OSDir.com]