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The Lowdown



Dec. 12, 2008 Post

Here's the The Lowdown from DNJournal.com! Updated daily to fill you in on the latest buzz going around the domain name industry!

Compiled by Ron Jackson
(DN Journal Editor/Publisher)
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The big buzz in the domain industry  over the past 24 hours has centered on Google's announcement yesterday that  they have opened up their AdSense for domains program to all North American publishers (domain owners), with other regions soon to follow. That means that 

anyone can now park their domain names directly with Google. In addition to potentially siphoning customers away from parking companies, this, for the first time, opens the PPC door to those who did not have a large enough portfolio, or domains of high enough quality, to get an account with one of the parking companies that have traditionally served as the middlemen between Google and individual domain owners. 

 

Many are declaring the move is a death sentence for Google's parking company partners, like DomainSponsor, Sedo and Fabulous, but it is far too early to determine what impact this will have on PPC providers who offer the Google feed. It will all boil down to one question - can those who go direct to Google make more money than they can make using one of the parking companies? We won't know the answer to that until those who make the switch start reporting on whether their revenues are going up, down or staying the same.

On the surface it looks like a no brainer - if you cut out the middle man and go direct you are bound to collect more money, right? Not necessarily and in this case probably not even likely. I have used AdSense in the past and (like many others I have spoken with) have found the payouts to be underwhelming to say the least. In addition, there are a lot of problems with Google's offering, starting with an archaic system for implementing their parking program.

You can't just change nameservers like you do with the PPC companies - for each domain you have to setup CNAME and A records (and more than a few people will have no idea what that even means). Their landers look like "throwback jerseys" - pages from a time long ago - just a list of links with no graphics and no way to do critical keyword optimization. In another major drawback, those who want to let visitors know the domain is for sale have no way to do that either and that could mean forfeiting the ultimate payoff - sale of the domain itself. 

Below is an example of a Google AdSense for domains landing page.

The ability to optimize pages, add relevant graphics and custom content, utilize cutting age management and reporting features are all value added services the parking companies have provided. Google is going to have to pay individuals a nice premium to get them to forgo all of those things or they are going to have to match those services point by point with something just as good or better. 

Over time maybe they will do that. In the short term maybe they will pony up and pay more to get people to switch now - or maybe they won't. For now they may be content just to pick up some of the stragglers who can't get parking company accounts. Google has never been one to nibble around the edges though - they only think big - so I'm sure they have something more in mind as time goes on. There is no doubt the PPC companies need to accelerate planning (that most already have underway) for a day when Google (and probably Yahoo too) decide to cut them out of the picture all together. 

This episode has featured quite an ironic twist. At the T.R.A.F.F.I.C. conference in Orlando last spring there was a lot of hubbub about rumors Google was going to pull the plug on the entire domain channel (in other words not monetize domain traffic at all). Instead they have just embraced the channel and possibly taken the first step toward pulling the plug on their parking company partners instead. 

T.R.A.F.F.I.C. Co-Founder Rick Schwartz has been a parking company critic in the past. He is currently out of the country on a vacation cruise, but I tracked him down this morning to see what he thought about Google's move. 

"I think the numbers will tell the real story," Schwartz said. "The interface each PPC company uses and how well they filter the traffic (to eliminate junk traffic) will be what determines the future of PPC companies. This may be more complicated than it might appear. 

I think the question really is "What is the motive for Google in this decision?" Was the motivation to cut out the middleman or is their decision based on economics and the economic turbulence we are about to enter or is it a 

Rick Schwartz
T.R.A.F.F.I.C. Co-Founder

future house cleaning to have more control and identify those with trademark and other questionable traffic? It may end up being a mixed bag but for now it seems like a positive development and maybe trying to insure their hold on the space from a serious challenge by Microsoft or others in 2009," Schwartz said.

"Hopefully this will open up new opportunities to maximize the value of our traffic. We'll know in the upcoming months. May be good for some, disaster for others and may have several phases as it plays out. Parking companies may or may not survive as they have been bleeding all year and now this is like a giant blood vessel that just exploded. The weak are going to fold. The strong are going to fight for their very survival, growth is gone," Schwartz concluded.

In times like these, you had 
better have an ace in the hole.

However this plays out my personal opinion is that for real control of their own destiny, domain owners must find an alternative to relying on Google and Yahoo for their primary revenue streams. That is way too much power to give anyone over your life. 

The current best solution I see is to get serious about development. It is true that development cannot be done on the massive scale that parking accommodates, but if you can develop just one site on a subject you are truly passionate about, one appealing enough to attract direct advertiser relationships, that one site could produce more revenue than thousands of parked domains put together. It will also give you a revenue stream that Google and Yahoo have no influence over, so if your parking revenue completely evaporates, you will still have an ace in the hole

The ability to create multiple revenue streams is what makes the domain business such a beautiful thing. You can make money parking, make it selling or leasing domains, or make it by building a business or media property on the domain. Those who are smart do it all. You never want to be dependent on any one of those streams. The path to freedom is there. Don't let a new wrinkle in the parking game distract you from it. Get on that path so that you are the one who has control of your future. 
(Posted
Dec. 12, 2008)


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