Nobody on The Road… Nobody on The Beach…

Written by Frank Schilling

There is something about the end of summer that feels so very similar every year. The end of summer, of fun and frivolity always comes at the same time and echoes, like the lyrics from a Don Henley song. Aptly named “Labor Day” is like a starter’s pistol at a collective social race that has been programmed to begin through years of grade-school, college and university. Everyone around the world does it. Fighting the urge to be productive in September is like swimming against an unstoppable tide of human behavior.

A different more fearful tide of behavior continues to play out before us. People have come to the realization that the economies of the World are poised to get worse before they get better. Apparently printing more money to paper-over problems doesn’t work! I certainly believe that to be the case. Much of our economy today is powered by the Ponzi-scheme of government dollars recycled to the private sector, then recycled back to government. We have America, Greece, Portugal, Spain and others on food stamps. There are 20 million people in the US working for the Government, basically paying no tax. A government employee’s tax bill is just a return of cash back to those productive members of society who gave it to them in the first place. We have millions more on government social security and Medicare – all draining the system – taking more than they contribute. This is playing out in Europe, in America… everywhere.

I believe the US is facing difficulties, orders of magnitude greater than its recent financial downgrade. I noticed it in Malibu of all places, where for the first time I saw not only a dead-head sticker on a Cadillac, but also men, holding signs, begging for cash, at Cross-Creek and PCH (a celebrity studded shopping district North of LA)! There were many more regular-looking people and even women standing on corners throughout Los Angeles (not just the usual corners) with “need-help” signs in hand. The usual corners near freeway ramps had many more people standing on them, begging. Storefronts were closed and some stores had downsized even on Rodeo Drive.

here is a strange inflation and parallel deflation occurring. Certain people are charging more for goods and services and chalking it up to inflation, while earnings fall or disappear for the industry in which they participate. Millions of people like you and I have not come to terms with the difficulty ahead, wrongly thinking things will soon get better. There is a great re-organization upon us where whole industries are going away. Cash is being printed by governments to prop up unsustainable routines which just shouldn’t exist anymore. The no-confidence vote of the world’s productive members of society is reflected in the price of gold which has soared since I suggested you buy some back in 2004. Those who followed my lead nearly quintupled their money.

Gold will be 3500 – 6000 an ounce in a few years – either that or it will stay at 2000 and the DOW will fall to 5000. You can diarize that remark as you did my last. Gold of course is just another human behavior which men fight at their peril. Just a shiny metal without an intrinsic use… just like the tide of back to school, back to work mindset… and just like the rush for .com names which work just as well as .nets .info’s and .whateveryouwant. To return things to a domain context, no amount of new TLD’s are going to diminish the value of the human behavior gold standard – .com .. used.cars will not knock 20k in value off usedcars.com. It will increase the value of usedcars.com and set a permanent floor to its value. Make those words as you did my gold remarks in 2004, fight them at your peril.

Millions will be made and lost in the New TLD casino, on both sides of the table. We are creating a machine to enrich strangers, with a nebulous and unknown outcome for the participant. Most at the table agree it’s better to have tried and lost than to never have tried at all. I am not 100% sure I have the right answer for you, but it could be that the biggest winners at the new TLD table are those who buy the best SLD’s in each space. One recurring theme of all namespaces is that a TLD is only as good as the best SLD’s in it. If you buy the best second level names in each space you can do better than the registry itself. The .COM space is a good example. The top 10 million generic domain names in .com are worth more than Verisign. Only 5-10% of all the names registered in .COM are generic or meaningful in any way whatsoever.

Newer spaces such as .INFO have seen even fewer good names with perhaps 1% of the .INFO space being worthwhile to anyone whatsoever. I could see just a few thousand good names per string in almost all new TLDs – a collective few million worth anything whatsoever to anyone.. and the demand fall-off being almost TOTAL after that.. Unlike .com which has “some” low dollar demand for $250 multiword strings, there will be ZERO demand for longer strings in new extensions. Better to be the registrant of the best SLDs than to embrace the clerical misery and competitive marketing-hell of running the registry itself. Only the deepest pocketed and most brave should walk down this college fraternity hazing gauntlet or roll the dice at this table of monsterous uncertainty.

The Internet Traffic business is at its annual low as I write these words. People are gone fishing and the economy’s ad dollars sit on the shelf in-wait, soon to be applied to dormant adwords accounts. The back to school rush will see millions of new, refurbished and toolbar-free laptops fire up in unison. Type-in traffic will spike. Ad dollars will spike. We will build to a crest through January, propelled higher by the Black-Friday shopping season. It all kicks off with Labor Day and we will be there soon enough.

My hope is that the upstream ad-marketplaces (Yahoo and Google) will redistribute those returning dollars, pari-pasu, to the “partners” in the syndication engine-room, who are helping to move the ship forward. If they decide to skim off the top to “make their quarter” at the expense of those assisting below, I see genuine discord for the ad-marketplaces and difficulty keeping traffic next year. Like an abused spouse, Tina is two blows from stepping out of the limo and walking away from Ike once and for all. If the upstreams reap all the returning autumn gains at the syndication channel’s expense, I see platform abandonment ahead. I’ve heard it from too many partners and in too many quarters for this not to be the case.

More than in previous years, this is a season to be the squirrel – to gather nuts for the cold winter ahead. It’s a great autumn to “take the deal” and build a cash cushion to see you through in case this winter and the economy are colder than in previous years. I am advocating that all our partners save more of their earnings and build as big a cushion as they can muster. Higher renewal fees for .com names in January will bring discontentment in February as registrant margins get squeezed. Upstream partners will need to recalibrate their payouts to those partners doing the lifting downstream to compensate for the name renewal price increases, or risk losing their partners to alternative and unorthodox monetization implementations promising more revenues.

I expect that “pressure to pay more” on upstream ad markets will intensify because of the new TLD process. That process will put negative pressure on existing SLD name sales, which have been a crutch for low PPC rates over the past 2 years. Early next year, name buyers will wrongly question the value of existing .com/.net names against a barrage of press extolling the virtues and vices of new TLDs. The trifecta of a more difficult economy, lower traffic revenues from the Verisign price increase and lower name-sales due to the sideshow of the new-tld process will cause pressure on re-sales. It would be an Orwellian Animal-Farm moment to see Google and Yahoo crushing the numbers this February as the domain-industry plays the role of the horse in the engine room, turning the wheel for less and less revenue. I just don’t see that working any longer. So the takeaway for you all is to sell more of everything NOW and save it, then have that cushion so you can buy some courage to change partners or try unorthodox methods if you need to next March.

Despite that gloomy prognostication of what could come I remain hopeful that we have seen the collective low for traffic payments in 2011. The market and fixed expense reality simply dictates that type-in-traffic is worth more, and it is not equitable that any middleman takes a majority of a product which is produced. There are flat-rate shops buying traffic at higher levels. Walmart is a buyer. Target is buying traffic directly during the Black-Friday period. It’s a short curve of logic for those monster retailers to buy that traffic all year long. Walmart buys everything from Sundried Cranberry snacks and Garden hose directly through their buying center in Bentonville. I have been there and have seen that process in-action when I sold Walmart video game joysticks and gamepads 15 years ago. It is illogical that domainers wouldn’t eventually line-up at this same location with blocks of tens or hundreds of millions of unique monthly visits, if the existing paid-search marketplaces get so greedy that the model of selling to those marketplaces becomes unsustainable.

In the end, the method which we use to implement domain name type-in traffic is not under our control. Upstream traffic marketplaces need to decide how much volatility they want to tolerate in their keyword marketplaces and how much value they ascribe to it. A healthy channel simply dictates that those who generate the traffic, need to ride along in the success, otherwise the market becomes volatile and ultimately, undone.

Traffic/Revenue Doesn’t Matter in High Value Sales

A question we have always wondered about is why at Flippa.com it seems buyers place great value on website traffic and revenue stats, with little if any intrinsic value for the domain-name itself?

However, with the just announced big sale by Rick Schwartz (DomainKing) for 4 million dollars plus stock for the two domains property.com and properties.com, their traffic and income was in all likelihood not a factor in the sale.

In fact, that issue was probably not even discussed, let alone a real consideration with the offer and purchase. Obviously, properties.com and property.com traffic/income was insignificant vs the very high sale price.

20k visits but revenue so low can’t buy a Starbucks!

Since the start of the major decline in parking page revenue over the past 4 years or so there have been several examples of poor performance from some major players. However, the current performance of a relatively obscure provider with a big company behind them is almost impossible to believe the stats could be true!

For example, look at the stats in the screenshot below, keeping in mind the incredibly bad stats are coming from several high quality websites, with more than 70% direct navigation (typeins), from mostly US traffic. The traffic was from ads placed on several high value websites, including a few health and wellness sites with very valuable well targeted domains, plus a popular social media site which gets substantial typein traffic.

With substantial and nicely targeted quality traffic of almost 20,000 visitors over the past 6-days the ads on those websites did not even earn enough money to buy a single cup of Starbucks coffee. Isn’t that amazing! Needless to say, of course the ads have now all been removed.

Yahoo: All .US Country Code Names Poor Quality!

A very interesting subject on the-web is that ALL .US extension domains are banned by the Yahoo feed under the title of Quality Block. Several pay-per-click parking firms who use the Yahoo PPC feed have confirmed that to be correct, and said yes, Yahoo thinks every single .us domain must be poor quality and thus are banned. Isn’t that an incredible wide-ranging assumption to make!

It’s been an issue for at least 2 or 3 years from what we understand. It appears both Yahoo and some of the parking firms who have been given our .us domains to monetize using the Yahoo feed in-effect keep it a secret and allegedly simply assumed we would not notice the fact we always get zero income from our dot-us country code domains.

It’s amazing there has been basically no discussion we have seen about this serious issue. It would seem like a major internet player like Yahoo allegedly hating its own country-code domain extension to such a degree as to ban them all from pay-per-click revenue should be major news and discussed at length in the media. Instead, it appears to be stonewalled with nothing but silence from most everyone, including the media, other domain blogs and the forums.

Eric Borgos Interview by Michael Cyger

We can highly recommend this interesting and educational interview with Eric Borgos conducted by DomainSherpa.com and expert interviewer Michael Cyger: Eric Borgos interview

The Saga of Nonsensical Traffic Quality Scores

One of the causes of the big PPC revenue declines appears to be Bing.com with their nonsensical TQ scores, i.e, my Parked.com/Bing TQ score recently fell off the cliff going from an 8 to 1 in a week even though traffic and domains stayed basically the same. My TQ scores have most aways been much better than a very poor 1 and in fact for a while under Yahoo last year TQ hovered at the 9/10 level for some time but now (a few eeks ago) the names and traffic are basically the same but we are at an impossible TQ-1 score.

Support claims Bing looks closer at conversions vs Yahoo but that makes little sense since why would the same traffic from the same names convert so poorly, especially since there are lots of typeins from good keywords. Makes no sense. If these wild gyrations continue and we stay at a level-1 we may be moving my traffic names away from Parked/Bing, which I do not really want to do since the system is extremely good (IMO, the best) in other ways.

However, we really can’t take the TQ BS any longer and am ready to throw in the towel on it. If I did not know my TQ was in fact good it would be easier to accept but I know the truth and my traffic is not anywhere near a ridiculous 1 score.

Interestingly, I wrote the above several weeks ago when I was discussing with parked.com support the absurd claim by Bing that my website traffic quality was only at a level of one. I forgot to post it here at the time but my memory has been now jogged in that I see my TQ score has skyrocketed to the 7 level. That is somewhat reasonable but still a little low since I believe my true TQ should be roughly an 8 or 9, but still an amazing improvement in the TQ achieved by basically the same domains.

The first graph shows the TQ score published by parked.com on Dec 8 2010. The next chart is the TQ score reported by parked.com on Jan 3 2011. FYI, the last 3 date points on the first chart correspond to the first 3 date points on the next graph.

Keep in mind, the traffic and parked domains were basically the same during the entire time frame covered by both TQ charts so the obvious question is how could the TQ fluctuate so wildly? Obviously it can’t. It must be a screw-up by someone, possibly bing.com?

Phone Calls can be an Affiliate Program Negative

For some odd reason the potential phone call which in all likelihood can end-up losing your affiliate referral revenue has rarely been talked about in the past. Not sure why since it’s believed to be a big negative.

I believe a good percentage of potential buyers will pick up the phone and call the sellers toll-free number for more information and when they do that your chance of getting credit for the sale becomes very low. That is especially true with higher priced products and services, where the prospective buyer is much more inclined to call before spending significant money.

He or she may be wondering if it’s a legitimate business and curious to see if a live person answers the phone. Your potential buyer may also be thinking they can get a better deal by calling, and there are other reasons they are likely to pick up the phone instead of using the online contact form or order form (which contains a cookie and tracking ID), such as a desire to authenticate the company, product or service, including frequently wanting to ask questions about the product or offer before ordering it.

When potential buyers call the sellers number, orders are often taken right away over the phone. Or a little later the buyer may be sent an email with an ordering link (not related to you as the publisher), so credit to you as the referral source can easily be lost, thus preventing you from getting credit for the sale.

As a side note, some years ago we believed we had far more referrals than our reports indicated. Therefore, we called seller ourselves and asked how they handled phone calls as far as credit to us as the referral source is concerned. We were told “don’t worry, we always ask how they got our number – so you get credited for the sale.”

Not surprisingly, that turned-out to be false since the next day we called the 800 number on the sellers website and said we wanted to place an order. We actually placed the phone order and at no time during the entire process did anyone ask how we got the number, so receiving credit was impossible.

In fact, the phone call issue is a major reason we have always been somewhat negative about joining affiliate programs. Unless someone can figure out a way to get around this negative issue we will stay negative on affiliate programs (at least regarding higher priced products). I see no good way to avoid this issue beyond getting your own assigned phone number but seriously doubt the product/service provider will agree to assign a special phone number to a new affiliate to better track the referrals.

Product Authentication

Negativity by Paying Domain Broker Upfront Money

Sometimes domain name and website owners may wish to hire a domain brokerage to sell their names or websites. I can give you some good advice (gained via my personal hands-on experience) about that, including a warning about paying any upfront fees to the broker.

Keep in mind, once the domain-broker has your money a good degree of the incentive to work hard and sell your domain or website may be lost since the broker already has his/her money, regardless of the name selling or not selling.

One more potential negative occurrence is the once friendly relationship you had with the broker may quicky go away if there are any business or personal issues involved. That can easily happen as a result of the broker already having your paid in advance monies so he may decline to issue a refund if you are later unhappy with his work and perfomance.

More information about why you should never even think about paying a fee in advance to a broker (which we published over a year ago) as part of a post about the category defining premium domain names LiveApp.com plus LiveApps.com both being available for purchase, located here: About Domain Broker and Live App domains for sale .

A good article about domain brokers was recently published in Elliotsblog.com in which Elliot lists domain name brokers. I know several of the same domainers/brokers and can suggest the following domain brokers, which Elliot listed in his post:

• BigTicketDomains.com – Kevin Leto
• DifferentInvestments.com – Justin Godfrey
• DomainBroker.com – Rob Sequin
• DomainsForMedia.com – Eric Rice
• MediaOptions.com – Andrew Roesner
• NameConnect.com – John Daly

By the way, Webtrading also offers a domain brokerage service (mosty for our own websites but the brokerage service can also be used to buy domains belonging to other parties), which you can learn more about by clicking-on the image below. In addition, any comments you may have about selling domains and websites, or regarding domain brokers will be appreciated.

How Erica Became Millioniare & Retired at age 26

For several years we had our web-hosting with Erica Douglass at her old hosting firm. We were one of her first hosting customers. After she sold the hosting business (for I believe over a million dollars) we moved on to a new webhost and later learned Erica started a consulting business at a new website erica.biz.

We normally do not promote other websites here but since we feel Erica has lots of knowledge on making online-money we are posting a few YouTube videos she has made about achieving online success.

Erica Douglass of erica.biz talks about how she became a millioniare and retired at age 26:

Exclusive consulting offer from Erica Douglass of erica.biz:

Erica Douglass picture:

Your Own Advertising Network & Keep All Income

Of course, we badly need good alternatives to Google® and Yahoo!® with the best and possibly the only viable option at this time being selling ad space yourself via your our own in-house Advertising Network. A major benefit from running your own advertising network is you keep 100% of the revenue.

Frank Schilling had a very nice Advertising Network of his own running on his domain names but I believe it was deactivated last year for some odd reason. I can only guess as to why.

We would like to install an ad network almost exactly the way Frank’s network worked on all our sites but having lots of difficulty getting it programmed after considerable time and effort.

The problem is the programmers we were trying to hire for the work were simply not capable of doing the job. Therefore, we would really appreciate finding out who the programmer was who programmed Frank’s old advertising network? We have spent considerable time in search of Frank’s Ad Network programmer, including a number of posts about it on Twitter and Facebook but no success. Does anyone know the programmers name or contact information?

P.S. As an interesting side note to demonstrate the major players are trying to improve their own domains and traffic (as small site developers and domain owners are too) we just noticed Fabulous.com (who is a major player with the PPC firms) is both surprisingly and mysteriously using a competitors platform and ad feed on a domain (I imagine far more names than just the one we stumbled on today).

Fabulous is using WhyPark.com (at least with the domain name we noticed today) which is owned by an arch-rival of Fabulous named Parked.com. Isn’t it interesting that Fabulous would use a competitors program instead of their own system!

FYI, the Fabulous.com domain name we are reporting on (which as of today’s date was on the WhyPark.com platform) is registered to FABULOUS.COM PTY LTD.

Any comments you have about website advertising and ad serving networks will be appreciated. Thank you.

Is It Still Possible to Register Domains with Value?

Is it possible to freshly register domain names of value (which may not necessarily make you rich) but have some value, and can make you at least a bit of money?

Rarely a week passes where we do not stumble upon at least a few unreg’d names which I am sure would get natural traffic plus search traffic too. We can’t possibly register them all (there are simply too many good ones) but when we do register the available domains there are often typein visitors to the temporary webpage right away.

Anyone else run across good targeted keyword unregistered domains lately?

Yahoo Publisher Network (YPN) is Shutting Down

Just received email from Yahoo announcing they are shutting down Yahoo Publisher Network by the end of April 2010.

Not really too surprising since it never did very well for many publishers compared to Google Adsense and never got out of Beta after several years in beta.

Some of their policies were also odd such as when they both emailed and called making us stop using the YPN Ad Targeting Tool where I was able to accurately target YPN ads to the right category based on both the domain name and site content.

The representative we spoke to said YPN did not like the way I was using it (but gave no real explanation after asking her for the reason many times) even though I was usng the ad targeting tool exactly as intended with 100% genuine ad targeting.

Funny thing is I always suspected YPN actually did not truly want completely accurate ad targeting since YPN allegedly had limited ad inventory in several important or niche categories. However, the ad targeting tool forced those ads where there may have been low inventory. Now I am thinking my guess about that was actually correct. LOL.

Why Develop Someone Else’s Domains Free?

Recently a forum member posted on one of the domain name boards he was looking for a reliable partner to develop his (no traffic) domain names into developed websites, including adding site content and making money from the site. He also wants the free developer to pay 50% of future expenses (such as web-hosting) in return for a 50% split of potential revenue.

Getting someone else to develop his no traffic and dubious value names (which also adds good value to them) and even pay 50% of future costs is a fabulous business plan for HIM. However, he needs to seriously ask himself why in the world would anyone do that when they can develop their own names and get 100% of the site ownership and future revenue for themselves (or develop for others receivung up-front compensation for the job)?

Pros & Cons Site Development vs Parked Domain

Many domain name owners are now saying the smart money in 2010 is on website development.

It appears most everyone is saying development is best but the fact is it can be much tougher to get revenue vs a ppc parked page.

Several reasons for that including the fact Click-thru-rates (CTR) is often 4 or 5 times better on a parked page which means the developed site will need 4 or 5 time more traffic to earn the same revenue, assuming the Earnings-per-click (EPC) is about the same comparing say Adsense/YPN vs the major parking firms.

With that said, a nice advantage the developed site has is the ability for site traffic to increase (but that can easily take many months or even years), whereas the parked domain is unlikely to ever get more traffic.

I have more developed sites vs parked domains so I also believe strongly in development but the strength of the keyword name is a big factor, imo. In addition, development involves vast amounts of time and work, including the site/domain server setup, content, hosting, seo work, site maintenance and monitoring, not to mention the hosting cost and time involved and many months or years of waiting for traffic to slowly build-up over time.

Keep the following example in mind if you are developing a good keyword name which gets say 100 typein visits/mo and earns say $2.80/mo at parking (based on 20% CTR and .14c EPC). Once you make it a developed site you will start-out with approx the same 100 typein visits but more often than not your CTR will drop to roughly 4% (or even lower) which means your revenue will decline to just .56c vs $2.80 on parking.

That typical example scenario in-effect means your traffic will need to skyrocket to 500 visits/mo to equal the same $2.80/mo revenue when parked. Can you imagine the time and work involved increasing your traffic from 100/mo to 500/mo!

Lower Domain/Website Income vs Higher Costs

Most everyone in the domain name and website development industry is reporting sharp declines of from 65% to as much as 85% in Pay-Per-Click (PPC) Advertising Revenues compared to a few years ago. The income declines appear to go well beyond the overall decline in the economy, with several other factors involved in the big declines.

Making matters even worse is the future scenario of sharply higher cost domain name yearly renewals since it looks like the domain registry operators will be able to soon charge whatever they want for yearly name renewals, with non-fixed and non-regulated pricing looming on the dark horizon.

The double edge sword of low income combined with expected greater costs could easily put an end to the domain name industry as we now know it. Comments on this bleak outlook are welcome…

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