I’ve always been marginally fascinated by the domain marketplace (key companies include Oversee.net, Name Media, Demand Media), it’s not an area I’ve studied closely, but clearly, it’s booming. I’d like to get to know it better, in particular as I prepare to give a talk to a massive gathering of folks in this industry later this month. So in the spirit of “my readers are smarter than I am” I’m asking for your help – where can I get good information on this market? I’d like to know its size, growth, issues, etc. I am already doing research on it, but figured if anyone knows, you all do…
A few things I’d love to know with some authority:
– Overall size of the market
– What percentage of traffic is “type in”?
– How do majors figure in the business – do they endorse, ignore, partner (I know Google partners…)
– How much of the domaining business revenue is Google Adsense?
Try http://www.domaining.com- it aggregates content from a lot of domaining blogs (including ours)
Check the business model of Mainstream Advertising based in Canoga Park.
No doubt you’ve read this article previously but if not follow the scent from here and you’ll find a ton of interesting material.
http://money.cnn.com/magazines/business2/business2_archive/2007/06/01/100050989/index.htm
John, We did a large study in this space about 6 months ago with the folks on the Yahoo! Publisher Network team. I’m sure we can dig up some stats to share with you or even refresh some of the data. Drop me a quick email and we can connect some time next week.
Not Sure about detailed numbers myself, but there’s likely folks who can help you here:
dnforum.com and dnjournal.com
Some hard core domain folks there. Of course, if you can get Monte Cahn to talk to you, he’d likely be able to give you any answer you’d want.
And some domain companies beyond what you listed above should have some stats: fabulous.com, sedo.com, parked.com, trafficz.com, domainspa.com are a handful of the more popular ones.
I’m not sure aggregate averages are all that interesting though. That is, there’s traffic from common misspellings of popular sites, parked common words, then everything else. The type in traffic, likely defined mostly by that which comes in with no referrer, is likely different for these differing categories.
I saw this referenced on http://www.SubliminalMessages.Com and just wanted to put in my $0.02.
Domains have outperformed gold, silver, the S&P, soybean futures, oil, and yes, even Google stock.
Some companies get it. Others don’t and will be forever reliant on Adwords, billboards and spam to get them new visitors.
Good luck with your speech; and, let the facts do your talking.
As a guy who spent 4 years in the SEM space, I think one of the things that has always amazed me is the extent to which the major domain companies finagled their way into the search engines’ search – and not content – distribution networks. Domain traffic is *not* search traffic, yet by my rough estimate no less than 25% of Yahoo’s search distribution network traffic is, in fact, domain traffic. Yahoo appears to be taking steps to address this an remove – or at least discount – this traffic, but it’s like a whack-a-mole game with more popping up than you can stomp out.
Also, I think it speaks volumes that the domainers have traditionally been such large buyers of paid search traffic from Google; I’ve talked to 15-20 medium to large domain firms over the past 2-3 years who each spend $100K-$2M/mo on search. Why, one has to ask, do these firms rely so heavily on paid search if there’s so much type-in traffic out there? My own hunch is that in many cases their domain portfolios are really just a vehicle for Google-to-Yahoo search arbitrage.
Lastly, I’ve always found the domain industry to be governed by a code of silence of sorts, whereby everyone in the industry is required to say that domain traffic converts well for advertisers, when the data says it doesn’t. When I was in the SEM space my firm erroneously (IMO) endorsed a Google-sponsored study extolling the virtues of domain traffic, and because it was virtually the only ROI-positive domain ‘study’, the domainers were always asking us for copies of the article, which made me very suspicious of their motives. Frankly, it feels like the Bay Area real estate cabal, where not a single real estate agent will dare say what we all know – that the market’s entering a horrible period – for fear of being black-balled.
Other than that, though, the domain industry is great!…
Check out my blog at http://www.goodURLbadURL.com. It won’t give you the stats you’re looking for but it’s a fun look at domains and I have links to some good resources like Inside Domaining and Domain Name International.
Interesting questions! 🙂
The “overall” size of the market is max. ca. 1×10^100 domains per TLD.
However, just because it is possible to jumble 26 characters of the roman alphabet in an astronomical number of combinations does not mean that anyone would actually do this.
So it should be expected that the vast majority of the overall market will never be developed.
🙂 nmw
Chris has it sooooo right. The word is finally out. The engines let this myth perpetuate because “parked” domain traffic violates their terms of service and their advertisers trust. My prediction: there’s some sort of class-action lawsuit brought against yahoo, google, etc. based on fraudulent traffic that comes from parked domains. The plaintiffs will argue that it’s NOT search and therefore NOT allowed under theirs terms of service, while the engines argue the opposite. Won’t be pretty.
Another question to add to your list…
-How much of the traffic/revenue is from typosquatting on trademarks (e.g. boomingdales.com, antaylor.com, officemx.com, etc.)
some links regarding domain/internet stats
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http://www.registrarstats.com/Public/ZoneFileSurvey.aspx
http://www.registrarstats.com
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http://www.denic.de/en/domains/statistiken/domainvergleich_tlds/index.html
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http://internetworldstats.com/stats.htm
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http://www.verisign.com/static/043194.pdf
http://www.verisign.com/Resources/Naming_Services_Resources/Domain_Name_Industry_Brief/index.html
and this link about online-advertising/PPC
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http://www.verisign.com/static/042167.pdf
and these links about 2007 domain sales
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http://www.dnjournal.com/ytd-sales-charts.htm
(also has links to previous years)
You might want to check out Mobile O/X – http://MobileOX.com – which allows people to create their very own “Personalize Domain” for free.
Examples of a “Personalized Domains” would include:
David.LovesBaseball.com
Jill.WritesPoetry.com
Jordan.GetsAir.com
Mobile O/X offers over 5000 choices.
In short, Mobile O/X is trying to make it possible for for people to get a really cool domain, since so many domains are taken by squatters.
I hope this helps your research / adds a new twist – or insight – into the domain name industry (Mobile O/X alone acquired over 5000 domains to make their service possible. If someone wanted to duplicate Mobile O/X’s business model, they too would need to acquire ~5000 domains to be competitive.)
Both Demand Media and Marchex have access to Google and Yahoo ad feeds, but use Yahoo. Which means Yahoo must pay better …
Also, Click Forensics reports that over 60% of clicks on parked domains and other “made for ads” sites is fraudulent. Link at http://kickstand.typepad.com/metamuse/2007/10/click-fraud-rat.html
The interesting thing about this industry is where do they go from here to grow revenue per site, when your biggest competition is the back button? It’s not like increasing ad frequency is going to help them. And increasing the quality of content might increase page views per user but perhaps at the expense of revenue per user.
there is no such thing as a fraudulent click — “click fraud” is a farce. a click is a click — it can be automated or whatever. advertisers who think that a click means that a transaction will happen are just plain naive.
Most of the larger parking companies don’t seem to allow obvious trademark infringements on their systems.
John,
My name is Justin Jilg and I run Business Development for Go Daddy. Being the largest domain name registrar in the world provides an interesting perspective. I would very much like to share our POV.
Please feel free to reach out if there is any interest.
Thanks,
Justin
Thanks for all the input so far, folks. It’s clear that this business is garnering mixed reviews, at best. Keep it coming, and I plan to post on this once I grok all the input…
I am speaking at said conference as well.
IMHO the domain “market” is comprised of 2 distinct parts: revenue from domain sales and revenue from domain parking. The sales channel is hard to pin down as many sales are conducted privately or not reported because of NDAs.
Here’s a 2006 report on the public sales in the UK market from sedo http://www.sedo.com/presse/marketstatistics2006.pdf
Sedo claims they have a transaction volume of more than $3m and 1,500 domains sold per month at this link : http://www.sedo.com/about/index.php3
NameMedia S1 filings over at this link should provide you with good info on one of the major domain sales companies who also develops sites and parks/monetizes their assets
http://www.sec.gov/Archives/edgar/data/1391323/000095013507006671/b64222nisv1.htm
Check Finance.yahoo.com.au and look up DBX and read through some of the annual reports for Dark Blue Sea (parent compay of Fabulous.com) to get more background on their sales efforts and domain parking as well. Dan Warner and crew have some interesting insights that might help you. Some of it can be found here: http://www.aftermarketdomains.com/summary-value.htm
Marchex filings and annual reports should round it all out.
Lastly, contrary to what others pass off as fact, all “domainers” are not involved in the activities described. As a domain investor I can say that I earn a nice living off of my investments and I have never participated in buying traffic (arbitrage) or click fraud. I know many in this business with the same business models. If you would like to speak to me further about the business please let me know.
I’d echo Adams comments and franky had a good chuckle at ChrisZ’s and Stone’s — Swallow hard SEM/SEO haters.. domain traffic converts far better than search when targeted correctly, although I’m not entirely sure why. Also, trademark traffic (cybersquatting) while forbidden fruit, converts into sales far better than generic intent traffic. In June 2007 Jupiter Research wrote that “Domain Navigation search traffic is the largest untapped opportunity for advertisers and agencies…” Subscribe to Jupiter Research and search by keyword for the full report. I’m cognizant that I won’t change deep seeded opinions, but suffice it to say that domain name type in traffic is not some new unseemly development that suddenly reared it’s head.. it has been going on in the exactly same fashion since the dawn of the commercial Internet and has been a covetted secret because of the very low barrier to entry and extreme profitability for participants. Not all domain traffic converts equally and targeting is everything, but you can bet grandma’s silver that this time 5 years from now people will still be buying and selling domain name search traffic, and for more money. Nothing fundamental has changed in the 14years years of the net– everything begins with a domain name. The dotcom bust didn’t change domains or navigation, and today businesses need paid-search traffic more than ever before.
the following is a good site around the subject John…
http://www.domainnews.com
Best, AD
What a business. Huh….
I tried getting some professional (/media co.) investors in on this in the UK, I couldn’t get a single one to bite despite the clear basic business -5 years later, man from myspace reads article and creates a company with lower cost, and the potential to match cnet!!!! :rolleyes:
It is a Great business. that’s why so many of the largest players have been quite annonymous from the wider tech-crowd for so long.
Kind regards,
Shaklir razak
Why are there so many ‘good’ keyword names still for sale then? Sometimes it doesn’t seem like anyone, but domainers are buying from one another.
@Bob because advertisers advertise on them (or sign up with Google to advertise on them) — and that is actually quite effective (except that Google keeps the lions share, and actually posts more/less random ads — just look at the Google ads on this site ;).
What’s really amazing is that advertisers still haven’t caught on that Google (as an ad agency) is perhaps just a little overpriced (but the recent comments here [and elsewhere] seem to indicate that they’re beginning to catch on).
Also, many people do not realize that 99% of the domain names registered are more/less worthless (“long tail”) and only a few are very valuable (e.g. “Live”, “Shopping”, “Gifts”, “Hotels”, “Movies”, “Baby” etc. — go check out those sites [and you might be interested to learn that FM writers are also involved at baby.com — i.e. babycenter ;])…