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Domains Names in SEO, Google Blocking, Arbitrage Leverage - Some Freeform Thoughts

Javier writes:

""Hi Frank

More on the subject of SEO, from another angle:

""I expect the weight on domain names to be lowered significantly (especially for competitive queries) as Google moves toward incorporation more usage data into their relevancy algorithms. This is especially true if many domainers put up low quality to average quality websites on premium domain names. Moves like creating 100,000 keyword laden sites in one massive push (as Marchex recently did) don't bode well for the future of domain names as a signal of quality.""

http://www.seobook.com/archives/002323.shtml

I thought the same as Aaron when Marchex released their domains publicly. I may be wrong, but couldn't see the benefit of ringing Google's alarm like that.

Maybe Marchex know something that I don't (I don't overestimate my knowledge in this area) but they should also know that it is fairly easy and quick for Google to automate in SERPs the downgrade of any site associated to a certain company, or that responds to certain common features.

Yes, I can hear you saying that they have such great domains that they don't need google because they get most direct nav. traffic, and I understand that. But should they have been more discreet, they could benefit from both sources until Google joined the dots.

Unfortunately we live in king Google's realm..."we are not free" anymore for quite some time now.

Maybe you can comment or you are in touch with the Marchex guys and they can give their take on this?

Regards

Javier Marti
Trendirama.com""

***FS***  Great comment Javier. I think Marchex is learning that we don't live in "King Google's realm" after all ;)  It doesn't really matter what Google wants.. It matters what their users want. There comes a point in time when parked pages become so good that they are effectively a real website that was lovingly created by an individual entrepreneur. As those sites each become a mini-nucleus in their own right, 'drawing' unique visitors outside of Google through the keyword weight of domain name and 'keeping' some measure of return visitors coming through the content provided there; it becomes less important what Google thinks - and it does their search engine more harm than good by blocking user intent, failing to display the site the user calls for..

The Google/Marchex relationship becomes more symbiotic when fueled by arbitrage.  Marchex can leverage their own organic visitor stream to buy millions of dollars of targeted traffic from Google each month for it's pages, arbitraging the cost of that traffic against the amount of advertising it can sell. Make no mistake .. Google "needs" the revenue from large scale high-brow arbitrage plays because that arbitrage underpins its stock price. The 4 or 5 large scale arbitrageurs on my radar collectively pay Google more than 300 million dollars a year...  there are many more I don't know of.. Google needs that money.

High quality generic search-term style domain names are the ultimate killer search-app for that reason. You are working "outside" of the Google/search engine framework to get your traffic and revenue, with the option being entirely yours whether you want to get bigger by dipping your toes 'into' the Google realm to buy additional traffic.

Now imagine Wikipedia content (which is often featured in the first 3 links of a Google search query anyway) married to an organic traffic driver (a targeted domain name), coupled with arbitrage to buy incremental targeted visits who's costs are offset against directly-sold (or syndicated) display advertising on those wiki-esq pages. The users win by finding relevant content, the Engine wins by making money selling traffic and the site operator with the potent domain controls the platform and ensures a burn down value in the high quality domain name.

If you can draw incremental visits (non domain, non-arbitrage, algorithmic search visits) from Google as Geosign has done, that's when the potential for incendiary growth exists - but that last element is the only spot where Google can exert any real control. As you pointed out, they can take their foot of your accelerator by blocking algorithmic visits via blacklisting your site or changing algo's.

I think it's safer and more predictable to live outside of that algorithmic world  .. but obviously more profitable to jump in..

Just my free-flowing thoughts on this...  some of it you've heard before.

Newspapers Trying to Find Their Way in a World we Take For Granted

Rhart writes:

""I am surprised that with the thousands of struggling, yet still profitable newspapers in this country that they (newspapers - who are searching for a solution***) are not gobbling up any available good generic domain portfolios.

Here is an article where they are just waking up and "Allowing readers to contribute content online" to their "1" domain, of course. Meanwhile Marchex and Demand Media are taking a large chunk the advertising dollars that they used to get. Do they ever notice this?

*** "Newspapers across the country are laying off employees to deal with declining revenue even as they search for a workable online business model."

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20070627/BIZ01/706270332/1076/BIZ

I should have added this article too

http://www.businessweek.com/ap/financialnews/D8PSRFLG1.htm

***FS*** I'm frankly surprised by how much easier it is for online folks like us to come after traditional media business models than the other way around. In a way it's sad.. in a way "that's life". This opportunity is open to anyone, but buying/managing thousands of domain names for traffic and dynamic-development is not going to be "for everyone".  As one of my friends recently opined: "We'll live to see the day when a large scale domain registrant leverages the power of their portfolio to buy a large traditional media outlet."   And unlike AOL Time Warner of the Past,  This time it will be based on EBITDA, not stock prices.

You Should Have Bought Marchex at $12...

http://bits.blogs.nytimes.com/2007/06/27/more-than-just-squatting-on-domain-names/

These guys own the catalog. If all their sites start to look like http://www.sanfranciscoveterinarians.com/ and http://www.newyorkdoctors.com/ then I have seen the future of large domain portfolios/parking...  and they look like multi-billion dollar companies.

You have to remember, this is only the first generation of the names married to Openlist.

New RBC Analyst Report on Marchex

Jordan Rohan publishes this report: Download marchex.pdf  which questions the amount of keyword to keyword arbitrage going on at Marchex.

It's no secret that Marchex has one of the best pure-play domain name portfolios in the business and I have previously suggested that the "break-up value" of that portfolio would be many hundreds of millions if they were to peel the names off their deck individually and set conservative "buy it now" sales prices on them.

That said, many folks are apparently under the impression that Marchex's revenue comes solely from those terrific domain names. Jordan's report is the first time I have heard a financial analyst intimate that a significant tranche of MCHX revenue might be coming from buying and selling third-party traffic via arbitrage.

A very interesting read, this report is packed with data. It doesn't change the burn-down value of Marchex's name portfolio which is there, and solid IMO.