A colleague reminded me that Marchex, the public company roll up of online advertising plays, recently purchased Name Development, a company that owns a couple hundred thousand URLs. (SEW thread here). The price was $165 million.
The business model for Name Development is drop dead simple: they own a bunch of URLs, and when internet users type a word into the address bar (expecting it to resolve to something useful) or misspell a legit URL, often times one of Name Development’s URLs comes up as the resolved address. Name Development then sticks a sh*tload of AdSense or Overture links on the resulting page, and voila, free money!
This is called the “type in” traffic market, and it apparently is much, much bigger than most folks might think. According to folks I’ve spoken to, Name Development gets 17-20 mm uniques on its 200,000 domains, and is a profit machine.
Here’s an example of what one of their sites looks like.
These sites are often confused as clickfraud pages, and in fact, the do look exactly like robot or Indian click farm fodder. I would not be suprised, in fact, if some percentage of same folks who are playing the “type in traffic” game might also be dabbling, perhaps on the side, in some click fraud as well. I’ve seen these kind of honeypots (yes, that’s what they are) used for what clearly is click fraud, and when I asked Google and Yahoo about them, they said they were legit because they were “type in” traffic sites, and the ads actually served a useful, directory like purpose.
Feels slightly shabby to me. Can this model last? Will folks keep navigating by the address bar? Am I being too, well, patrician in my view of this model? What do you guys think?
Update: B2 has a good article on “domainers.”