free html hit counter What Percentage of Yahoo's (and Google's) Revenue Comes from Domainers? | John Battelle's Search Blog

What Percentage of Yahoo's (and Google's) Revenue Comes from Domainers?

By - January 19, 2008

I’m digging into the domain space for this talk next week. It’s a fascinating, frustrating industry. I posted a general query last week, and got a ton of wonderful advice. But I did not get an answer to the question above.

Does anyone know?

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  • stone

    a scandalous amount…the real question aside from the actual amount. Does that type of revenue violate yahoo’s TOS? What about that class action lawsuit? This is a possible scandal coming at some point because I believe that Yahoo’s stance is that a domain visit is akin to a search query.

  • yinst

    For Yahoo it’s 10%.

  • jwc

    a lot more than you think.

  • MM

    I estimate the “direct nav” or domain space generates ~$750MM in gross ad revenue. If assume Yahoo and Google together represent 75% of the market, which would put their combined gross revs from this sector at $525MM or about 2% of their combined gross revenue.

  • Didier DURAND

    Hi John,

    Listen to this podcast from a Supernova 2007 panel:

    http://itc.conversationsnetwork.org/shows/detail3359.html

    It talks a lot about domaining an, if I remember corectly, mentions the number you are looking for at some point (I think – from memory – the head of Tucows says 15% at some point 15% but pls check it again)
    didier

  • about-advertising.info

    The question is difficult to answer. I guess in “reality” the revenues come from:

    1. the people who pay to have their ads appear on pages that include google adsense (or similar “automatic” advertising) links

    2. the people who click on those links

    3. the people who decide to put such links on their websites

    IMHO, that far more interesting question is why do people do that? (rather than trying to figure out how much it is — even though I do not doubt that it’s a chunk [but I guess "only the shadow knows"]) I am still totally unconvinced that it produces any “positive” results (except, of course, for Google shareholders).

    But who knows — maybe the market will catch on after all?!?

    ;D nmw

    ps: if/when the market does catch on, then you can expect keyword domain valuations to become far more “reasonable” — and I also expect that might finally dispell the worn-out myth that the .COM TLD is “better” than other TLDs (and if people begin to acknowledge that, then we may actually see the first “dot com bust” [I refer to the 2001 bust as the "dot bust" -- since it really didn't have much to do with the valuation of the .COM TLD])

  • Richard Ball

    Isn’t it interesting that both Yahoo and Google try to hide domain advertising and bundle it with existing search advertising and contextual advertising traffic? It’s neither search nor contextual. It’s unique and should stand on its own. Some domains will perform well for advertisers. Others will not. By hiding it, though, this makes advertisers uncomfortable. The lack of transparency makes it look like the PPC networks have something to hide. In some cases, they do.

    If you look at this from the advertisers’ point of view, domain ads should actually perform better than even search ads. Why? There are no organic search results to compete with. That’s the theory, anyway. In practice, too many of the parked domains participating in the Yahoo and Google ad distribution networks are not equivalent to searches. They’re garbage.

    John, you’ve used AdWords before, right? Don’t you find it particularly ironic that Google, whose mission is to organize the world’s information, chooses to hide domain ads information from its advertisers? If Google chooses to lack transparency, that’s a signal that there is something to hide.

    Again, though, that shouldn’t be the case. Advertisers need a domain network, discrete from the existing search and content networks. Doesn’t that just make sense? For domainers with high quality domains (domains equivalent to keyword searches), they’d benefit because advertisers would set higher bids for the higher CTRs that should exist.

    Getting back to your original question, though, only Google and Yahoo know the revenue mix. It’s not in their financial reports. Now, isn’t *that* peculiar? ;-)

  • most-searched.info

    Good points, Richard — but there is one point that is, I feel, unclear:

    “If you look at this from the advertisers’ point of view, domain ads should actually perform better than even search ads. Why? There are no organic search results to compete with. That’s the theory, anyway.”

    The way this is phrased makes it sound as if domains might not rank well. Instead, domains actually rank very well (perhaps the most straightforward example of this is the simple fact that a search for “Amazon” will return a bookstore as the top result, not a river — or try “hotels”, “cars, “credit cards”, … even for “books” B&N [owner of books.COM] comes out in front of amazon.COM [but I have no idea why google.COM is the top result for a search on "books" when using the google.COM search engine ;]).

    So perhaps the best way to “come out on top” for keyword searches is to “get listed” directly on appropriate keyword domains. Strangely, Google seems to be saying that it will penalize “sponsored links” — unless they’re sponsored links from Google! ;D Then again Google’s left hand is still trying to figure out how to separate apples from oranges, while it’s right hand is pouring mixed up confusion into the shopping cart.

    I guess Google is basically cooking up some very “sophisticated” broth. What will work in the long run?

    1. plain and simple
    or
    2. a pie in the sky?

    :) nmw

    ps: the link posted above by Didier DURAND provides a very informative overview — even though some of the speakers on the panel apparently sought to propagate the popular notion that there might be something “wrong” with using cars.COM to find a car.

  • Desire Athow

    John, this article from DomainTools.com gives you more insight on the relationship between Microsoft and the domain name industry :

    A confidential informant says Google will stop monetizing all domains if they are less then five days old. This potential new policy change by Google could stop all Domain Tasting in its tracks. The Add Grace Period (AGP) is a time period when registrars can delete a domain at no cost, but in this time frame a registrant could register millions of these temporary domains and place Google Adsense for Domains on them. The result is the ability to produce millions of temporary websites that literally generate millions of dollars in income per week for Google.

    Sorry, but I can’t post URLs for some reasons.