I was approached by a headhunter two weeks ago recruiting an “editorial” manager for a venture backed company that had accumulated a large pile of domain names. The business plan was this: take advantage of the eight to ten percent of internet searches that occur not in the search box at Google, Yahoo, Ask or MSN, but directly in the URL bar of the browser and deliver a page with some “lite” editorial and a ton of links purchased by small businesses seeking people associated with the typed in term.
We’ve all hit them, especially when mis-typing a URL. The domain squatters and “seagulls” that collect domains build pages that either offer the domain for sale or cover it with links as part of an affiliate marketing program or existing paid search inclusion such as AdSense. This, to my thinking, is the bottom of the barrel in online marketing, similar to the bandits who played the 900 number game in the 90’s.
Now, according to today’s New York Times, the model has grown up thanks to the likes of Demand Media (founded by the ex-CEO of MySpace) and Oversee.net (the subject of the Times article), and Marchex’s purchase of the Name Development Company. Given the ease of scooping up expired domain names from the registrars, it’s a minor investment to accumulate a portfolio of domains, map them to loosely related editorial, and then plaster the pages with paid links.
This strategy works on a couple levels. First, it works on an SEO basis by creating link farms within a network, juicing the page rank of the network as long as the engines don’t catch on and penalize it. Second, “lite” editorial models are cheap. Splogs are the extreme side of this game, scraping other bloggers’ content and passing it off as their own.
As the Times point out, this is the direct mail business grown up and gone digital. Instead of hoping one out of a hundred envelopes will get ripped open and acted on, this hopes that one search out of a gazillion is an address typed into the right domain at the right time. I suppose it’s great for small businesses, but it smacks of domain squatting and pop-ups without the pop-up.
The only rational comment in the Times article (which is pretty naive in my opinion), was this:
“A longtime player in online commerce sees an evolutionary pattern. “The world of search engine optimization and marketing is very crowded, with players big and small looking for revenue opportunities,” said Ian Chaplin, of Galloway & Chaplin Capital, a founder of several businesses including Red Envelope, a gift site, and BidShift, a hiring exchange for hospitals and nurses and other medical personnel. Ultimately, Mr. Chaplin says, the “only sure winners will be Google and Yahoo and other major search engines.” “
I agree the engines are the ultimate winners, and, in theory, the biggest threat to the gulls should they decide to change the rules.