Top 4 Lies Domainers Tell Themselves

My love affair with domaining continued last week as I made my largest ever (self-financed) domain purchase. I think I got a really good deal on it, based on the fact that we will be developing it. (Valued in reference to its pay-per-click earnings, you might say we overpaid–but we didn’t.)

Anyway, I think being an experienced SEO and affiliate marketer gives me an edge as a domainer–I am able to see value where many domainers wouldn’t (for instance, I know that .org’s and .net’s get the same ‘SEO bonus’ that .com’s do, making their normal sale value–10-20% of the .com version–relatively desirable if you actually plan to develop rather than park). This competitive webmastering experience also allows me to avoid drinking the Domainer Kool-Aid. Yep, I think domainers as a bunch often believe what they want to believe, even in defiance of reality (the same could be said of SEOs of course!). Well here are four often-accepted lies that domainers tell themselves, which this SEO is calling bullsh*t on:

  1. Type-in traffic numbers are higher than you think, and growing. OK before you domainers launch your SCUD missiles at me, I do admit that with the REALLY big domains (e.g. Cars.com) certainly there’s a lot of type-in traffic. Not sure what the ratio is to search traffic, but of course for every 1000 searches for [cars] there is a certain fraction of that number typed into the URL bar as Cars.com. This fraction may also apply to 1.5-tier domains (e.g. UsedCars.com) but in my experience it does not apply to 2nd-tier domains (e.g. OhioUsedCars.com). As far as trends go, I think the facts are pretty simple. Most users stop typing something.com in the browser URL bar after they’ve used the Net for 6 or 12 months. Really, there is no reason to ever type in something.com once you have used Google. Yes, there will always be incoming (dumb) Net users, but in future years most of the new Internet users are going to be in the developing world (and thus harder to monetize). In America, nearly everyone who ever will use the Internet is already using it–and very few of us don’t know how to use Google.
  2. Type-in traffic converts better than search. OK so not only is type-in volume generally overhyped, its quality is lower than what’s normally stated. Richard Ball from Apogee Search covers this well here, the short version is that studies touted as proving type-in converts better than search are often lumping type-in, bookmarks, and other forms of traffic together (often referred to altogether as “direct navigation”). Of course bookmarks convert extremely well, and that skews the numbers upward. As far as how well the type-in traffic converts, the jury’s still out.
  3. Dot-mobi is the next dot-com. Well let me start off by saying I believe .net’s and .org’s are undervalued, which Brian Provost explains in-depth here. So the idea that a .mobi goes for as much or even more than the equivalent .net or .org is my first clue that the dot-mobi values are way overheated. Yes, I understand the concept of long term speculation in the mobile space, but even if we accept that mobile web usage is growing (from its current anemic adoption rate it in the US), it’s not yet even widely agreed that we will use .mobi extensions in mobile URLs! (as opposed to using mobile.domain.com or just having one universal URL where browser sniffing serves you a mobile version of a site when it detects you’re using a mobile device). Unfortunately, with dot-com prices sky-high right now, less-capitalized speculators are turning to this extension hoping for a huge long term upside, and of course the current dot-mobi owners are all-too-willing to feed the hype. I guess this myth is OK, I will keep buying up the good .net’s and .org’s and will laugh all the way to the bank. ;-)
  4. “Web 2.0 Communities” can be built automatically across huge portfolios of parked domains. As I explained in an earlier post I think Demand Media’s “Web 2.0 parking” plans are going to fail miserably. Basically, the plan is that with the push of a button you can transform your parked domain into a “Web 2.0 community” by pulling content from some different sources (eHow? wikipedia?), branding it according to the domain name, mixing it with user-generated content that the visitors provide, and interacting on the back-end with all the other domains for purposes of monetization and cross-promotion. Domainers want to believe that it will work because it solves the ‘development problem’ (how can you develop your domains if you own 10,000 of them?), but there are many trends going against it, and neither the SEO economics (thin, low-value-added, partly-duplicate content) nor community economics (the 1% rule, the fact that most community sites fail) bode well for its success.

Well I would enjoy it if a domainer would take the bait and write The Top 4 Lies SEOs Tell Themselves. In the meantime I think you smart SEOs are seeing the synergy between domaining and organic search. Just make sure you don’t drink the Domainer Kool-Aid!

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10 comments ↓

#1 Jamie on 05.15.07 at 10:53 am

great blog Andy, I’ve been lurking for quite a while and congrats on moving out of the agency model. I’m a newbie in the domain space as well, but I think you might be off a bit on your first point. I don’t have data to support this, just a sort of dim view of human nature. I think that those of us in the search/seo/domain/online world tend to think that the average internet user behave like we do.

I believe this is false. As a race, I think we humans tend to be creatures of habit. I think there are probably a ton of people that will stay with whatever their initial approach to a new task was when they first started doing it since it is comfortable. This could apply to direct nav, driving habits, grocery shopping, voting (or not) etc.

#2 admin on 05.15.07 at 11:39 am

> I think there are probably a ton of people that will stay with whatever their initial approach to a new task was when they first started doing it since it is comfortable.

If type-in yielded a useful site MOST of the time, I would agree that their behavior would be reinforced.

Issue is, SO many domains are parked — including single word, large-vertical domains (ahem, MCHX) — that I think after a while ANYONE with common sense would start using Google.

#3 SearchCap: The Day In Search, May 15, 2007 »Technology News | Venture Capital, Startups, Silicon Valley, Web 2.0 Tech on 05.15.07 at 2:58 pm

[...] Top 4 Lies Domainers Tell Themselves, Tropical SEO [...]

#4 saitori on 05.16.07 at 6:45 am

Empirical studies supporting your # 2 point can be found at:

1. Direct Navigation Hubris?
2. Value in Direct Navigation: Empirical Evidence

#5 Richard Ball on 05.16.07 at 7:12 am

Hi Andy. Regarding #2, thanks for referencing my post! That 4.23% conversion rate that domainers brag about had me baffled until I realized it’s simply wrong. I agree with domainers that keywords are keywords. It doesn’t matter if users type them in the search box or in the browser bar. A massive collection of generic keyword domains is like a distributed PPC search engine. I get that concept. Instead of typing “web health” into a search engine and seeing PPC ads, users might type webhealth.com in the browser address bar and see PPC ads on that domain. Notice that Google (or Yahoo!) win in either case. They’re getting a CPC cut. Aggregate enough of these generic keyword domains and you have, in a sense, a distributed PPC search engine (without any algorithm).

Here’s the problem, though. Not all parked domains are generic keyword domains. These other kinds of domains must drive traffic either via spyware, PPC arbitrage, traffic exchanges or other “artificial” means. There’s no direct navigation. Consider these domain names I’ve seen (masked by searchportal.information.com URLs in the logs) from tracking Google PPC search traffic:

bushherp.com
cfta.ca
climetecrisis.net
goatlocker.com
millerecettes.com

It’s absolutely unbelievable that this kind of garbage traffic is on the Google AdWords *search* network (content network was off). These are not direct navigation keyword domains. They do not convert. That’s why I was baffled by this 4.23% conversion rate number. People forget the definition of direct navigation used in the study that came up with that number: “Includes bookmarks and URLs typed directly into the address bar. Also includes e-mails from non web-based e-mail clients and poorly implemented redirects where the referring domain is stripped out or masked.”

That’s a whole bunch of stuff beyond what domainers refer to as direct navigation of type-in traffic. Of course bookmarks convert well. How did the user find the site in the first place to bookmark it, though? This 4.23% conversion rate number is *completely* useless. It’s a shame WebSideStory called it direct navigation.

Regarding #4, let me just say you can’t automate building communities. I doubt that will work. It’s a completely different skillset required to build and nurture a site vs identify good domain names and park them. Worlds apart.

Hope you don’t mind the long comment. Thanks again for the link. ;-)

#6 admin on 05.16.07 at 7:50 am

Richard,

Thanks for your in-depth comment!

#7 shortbus on 05.23.07 at 4:11 am

I can count on one hand the Domains that i might type in rather than go to my favorites and click on. Even Godaddy has gotten into the “Premium Domain” selling. Not that i blame them for that, it the stumps will buy them i say “I have http://WWW.Swamp-Land-4Sale.com that i will sell you.” and i will let it go for the low price of $50,000.

None of that is to say that there is no relavance to the domain name but not enough to make me spend a whole lot of money on one. I just don’t don’t think that i would ever get the ROI from the type-in traffic.

The only reason to buy a Domain Name for more that $20 is if you are going to Brand it and you are going to make your ROI on products with your domain on it. I just started a new SEO Blog that i intend to do just that but i only paid $20 bucks and got the .com .info and .org and the same time.

Domainers are riding the Short Bus

#8 shortbus on 05.30.07 at 4:07 am

Did everyone just see that porn.com sold for 9.5 Million Dollars.

#9 theppcbook on 07.27.07 at 11:41 am

Great post Andy -

I recently posted actual stats from a campaign I manage where ‘domain ads’ traffic is showing a terrible conversion rate. I’ve yet to see one of my campaigns prove otherwise.

http://theppcbook.com/2007/07/17/more-fun-with-parked-domains/

#10 bigdawg1313 on 11.07.07 at 4:10 pm

While I am 6 months after the fact on this post, it is all still very true.

I believe even the .biz domains are good buys, either for development or squatting. I know there is no difference per the search engines for SEO with the domains extensions.

Also, mobi is crazy expensive. I am not sure how many people are going to be “surfing” the net on their 2×2 phone, or even their Blackberry. I would venture out to assume if you are looking for something on your phone while you are out you are either lost or looking for the nearest Starbucks to get your caffeine on.

Good blog. I am going to bookmark it and come back often.

Mike