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May. 23, 2007 at 11:07am Eastern by Greg Sterling
Direct Navigation And Domain Empires
Business 2.0 has a fairly comprehensive (cover) story about domain portfolios and "direct navigation." It starts off with a profile of Vancouver entrepreneur Kevin Ham ("The Man Who Owns the Internet"), who operates a $300 million domain "empire" but goes on to discuss others who have become wealthy from domain speculation, parking and domain portfolio ownership. (The author of the article Paul Sloan has a related post here.). The ads on Ham's domains are served by Yahoo.
There's something vaguely unseemly about profiting off domain ownership and parking, often a kind of "bait and switch" for users who type in a URL thinking they're going to a content site but wind up getting something less than that. However, Marchex, an owner of a large domain portfolio (and mentioned in the article), has been upgrading and enhancing its sites with search functionality and content from its acquisition of travel and local search site OpenList last year.
Here's a 2005 article on the same subject from Paul Sloan for Business 2.0 and two pieces by Danny on the phenomenon: Search Engines Making Millions Off Type-In Traffic From Domains and Google AdSense For Domains Program Overdue For Reform -- And Yahoo & Microsoft Should Also Take Note.
Postscript From Danny: One of the most interesting aspects of the story is how Ham has struck a deal to populate any unregistered domain from the country of Cameroon with ads from Yahoo. Cameroon uses the .cm domain. People might type that by mistake rather than a .com, such as microsoft.cm or oscars.cm. Yahoo and Google both provide ads to domainers, but they say rules do not allow for "typo" domains that are trademarks of others to carry ads. For example, Yahoo would not allow ads to go on a site like microsft.com. The question is, would microsoft.cm be viewed as a typo of a registered trademark of Microsoft. Legally, perhaps not. Businesswise, I can't see the difference. If Yahoo's not going to allow typo domains to carry ads, the principle should apply whether the typo happens before or after the dot.
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By Greg Sterling
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See Related Stories In: Search Ads: Domaining, Yahoo: Business Issues, Yahoo: Partnerships, Yahoo: Search Ads
Bait and switch? Where is the "bait" portion? Domainers typically are not running ppc ads to drive traffic (that whole direct nav bit). Compared to mfa sites this is nothing.