April 15, 2008
When all else fails, start a media company
That is the new mantra for a band of internet operators which until now has lived in a twilight world where the value of domain names can rise and fall as fast as a dotcom stock price, and where mastering the latest tricks for syphoning traffic from Google can make the difference between fortune and bankruptcy.
Communicate.com (now renamed Live Current Media) is a case in point. The various businesses this company has been through, as described to me by new boss Geoff Hampson, read like an opportunists’ history of the internet:
Domain name trading. Communicate.com was one of those to see the value of registering popular domain names, and later made money selling off names like Rugby.com and Beijing.com.
Search engine arbitrage. This involved acquiring traffic by advertising on search engines, then trying to turn a profit by filling its sites with ads from Yahoo that would draw a higher price per click. Many of the companies that tried that tactic have been put out of business: the search engines cracked down on the practice and started to block “landing pages” that contain only adverts, rather than the real content users are looking for (this story in the Financial Post about how Canadian company Geosign blew $160m on the strategy is instructive.)
Ecommerce partnership. The next step was to lease some of its well-known “geo” names (which include Brazil.com) to Frequent Traveller, which would turn them into ecommerce travel sites. That failed, says Hampson: “They were trying to do customised travel deals at discount prices.”
Building a bona fide “media” company. Hampson, who took control last year, now says he’s out to create a real media business around the most popular domain names, like Cricket.com.
It’s no surprise that other, bigger domain name companies - like Demand Media, Marchex and Internet REIT - all say they are heading in the same direction. Unless they can fill their sites with more useful content, they risk losing traffic from the search engines (notwithstanding the dark arts of search engine optimisation, which they all use to stay as high in the “natural” search rankings as possible.)
Don’t expect too much from these new “media” sites, though. Not surprisingly, there is much talk of trying to harness user generated content and social networking, spiced up with a sprinkling of “expert” commentary. How many compelling sites will come from this ultra-low cost approach to domain name development?
