I like this post on Frank Michlick's blog.. It speaks to valid points that all "direct navigation" operators have known for a while... and it's a very catchy title Frank :) The spark came from this post over at Richard Ball's blog.. Richard.. you're a clever guy (even if you misunderstand the nature of my webhealth.com experiment ;)
The dominant search engines are not acting like the domain owner's friend. Domain owners get our traffic "around" the search engine, through the browser's address bar. That seems to be somewhat unsettling to search engines, because they can not control that traffic. It's a wild-card that can be leveraged by the domain owner to do unpredictable things. So imagine going to Google, searching "Myspace.com", then getting a page which isn't Myspace but which has a Myspace.com label. The real Myspace.com may have grounds for a lawsuit and the users clicking may be unhappy. Why are generic domain names any different? If you get as much traffic as Myspace from a basket of generic names and somebody else advertises your generic names in an effort to trick people into clicking (and Google supports that), are they not stealing from you? How about Microsoft and Firefox? When you type domainnames.xom in the address bar, is the surfer not intending to get to the .com? This stuff will bring itself to a head at some point... There's too much at stake IMO. Too many website owners being stolen from. I estimate 8% of global direct navigation traffic is being stolen to the right of 'the dot' alone.
So let's think about the money. Last week I heard a colleague (on the banking side) estimate that 1/3 of Yahoo's revenues now come from the domain channel (Arbitrageurs included in that channel BTW). Over at Google, 'direct navigation' is very big. Sedo, Oversee and all the little domain operators plugging into Google -- how much money does GOOG make from that channel? The public figure for all Google "syndication" is 37% .. I think a great deal more of Google's "Convertible" (sell-able) traffic comes from their syndication channel. Why do I think that?
Domain syndication partners have precision control over their inventory. Type joystick.com and there is little ambiguity about your intent. I have run a small search engine for years.. Do you know what people type into the search box? PORN.. SEX .. Misspellings ... terrible un-repeatable things.. science equations, questions.. curse words.. The search-box brings a lot more bad stuff than good. Google is exactly the same as any other search engine, only bigger. How many of Google's searches can they monetize? Do you honestly think that everybody goes to Google to buy cars, homes and toaster-ovens? Based on my experience, that is not the case.
Additionally, Google gets traffic from Firefox via the domainnames.xom browser stealing I illustrated earlier. If they call that THEIR traffic on the quarterlies, then expect "their" traffic to go down in future. There are forces working to return that traffic to its rightful owner.
So there's the cold-war... The browsers and engines try to game, cajole and push the envelope just enough not to antagonize users. Domainers buy more names and arbitrage visits back from the engines. As web development starts to turn inactive domains into useful sites, a great sea-change is going to occur. The engines have no choice but to serve the relevant domain users call for, or destroy themselves.. Okay that's way too dramatic.. but it is the Cliff's Notes. Give the people what they want or the people will go elsewhere. The domain owner is on the Western side of this iron curtain IMO.