DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> Why Demand Media and “Web 2.0 Domain Parking” Will Fail — Tropical SEO

Why Demand Media and “Web 2.0 Domain Parking” Will Fail

My obsession with defensibility has led me into the exciting world of domaining. I enjoy getting into a new community of web entrepreneurs who think differently (and largely make more money) than SEOs.

One of the recently hyped upcoming developments in domaining is the advent of “Web 2.0 parking”, where Demand Media seems to be the major player right now. The business case is explained fully in The Death of Domain Parking and the Birth of a New Vertical Web 2.0 Empire at Daily Domainer (a good blog to add to your Bloglines, btw), but this quote is the synopsis:

  • “What if we could equip one single domain with a powerful Web 2.0 community software that turns one-time visitors into regulars?
  • What if we could then duplicate that domain’s software over thousands and hundreds of thousands of domains at the click of a button?
  • What if these domains could automatically brand and customize themselves according to their visitor’s perceived preferences and expectations?
  • What if these domains could interact with each other on the back-end to transfer content, users and ads among each other?”

Now, Richard Rosenblatt obviously isn’t a dumb guy, and Demand Media has a large and valuable domain portfolio to leverage (and many customers to resell to, via eNom, which they own). A lot of people think what he’s doing could revolutionize domain parking (even Frank Schilling seems to like them). Of course, domainers are famously lazy, so I think they’re going to naturally favor any potential idea that involves button-pushing over manual development (manual development does not scale when you own 300,000 domains).

But frankly, I’m not sure that everyone’s really thought this through; when you get down to the details, there’s a lot of factors working against this model.

  • Only domains with 1000+ daily type-ins have the right economics to be a community. If these guys know about communities, surely they’re familiar with the 1% Rule: if you get a group of 100 people online then one will create content, 10 will “interact” with it (commenting or offering improvements) and the other 89 will just view it. So how do the economics work with a domainer’s 7,000 domain portfolio, most of which get a few type-in’s a day? (hint: it won’t). The only domains that would be sustained by this system are those that get 1000+ daily type-ins (think mortgage.com, baseballcards.com, etc.) and these types of domains certainly should be manually developed anyway.
  • The vast majority of “user generated content” sites fail. For every Digg or Reddit out there, there are hundreds (thousands) of Web 2.0 community type sites which failed to gain critical mass. Why can’t anyone compete with eBay? New buyers go to where existing sellers congregate (eBay), and new sellers go to where existing buyers congregate (eBay). In a longtail world, most community congregates around the head. For those communities that have succeeded, they have usually spent a ton of marketing dollars into launching them, and those low on funding have put a lot of sweat equity into convincing friends into posting and commenting in the early days to “get things going”–not exactly a “park and forget” strategy.
  • Real communities do not survive, grow or thrive without a lot of moderation. How well would WebmasterWorld do without moderation? How about Craigslist–the spam there is bad enough, would you still use it if the spam were 100x worse? (which it would be, if they didn’t spend a ton of time moderating it). Successful communities put a ton of man-hours into moderation–which is why the ROI on developing and maintaining a community is (usually) alarmingly low (yes, there are exceptions). Again, it’s not exactly a “park and forget” strategy.
  • Reprinting and repackaging existing content is not conducive to gaining search rankings. Many domainers continue to amaze me again and again with their lack of basic SEO knowledge. (Then again, they may laugh at my lack of knowledge about domaining ;-) ) You’re going to draw content from eHow again and again, and each site that does it will get well-indexed and rank? I don’t see it. Ditto if you try importing and remixing content from Wikipedia or Topix. Yes, Answers.com can do it, but pretty much everyone else scraping and re-using content has a limited lifespan in the non-supplemental index.

Now that I’ve trashed this model, you may ask me what my alternative is? Sorry to say I don’t have the answers :-) As for my own portfolio, I’ll continue to develop anything that gets serious type-in traffic to maximize value, taking advantage of the reinforcing effect a good domain has on SEO; meanwhile, for those domains that don’t get serious type-in, I park ‘em wherever I have the best CPC rev-share deal.

What are your thoughts? Does the “Web 2.0 Domain Parking” model have legs?

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3 comments ↓

#1 julien on 04.16.07 at 5:32 pm

glad to see i’m not the only person obsessing with frank schilling and his motley crew.

#2 alex_advice_network on 04.18.07 at 12:13 pm

I’d love to ask you a little more about the
“Reprinting and repackaging existing content is not conducive to gaining search rankings.”

I’ve been thinking about using content from article banks on a site I’m building. It sounds like you think that is a bad idea, but if you could flesh that out, I’d appreciate it. How bad is the idea? Can it be done some, a little, never? How about reposting blog entries (with permission of course.)?

Thanks,
Alex

#3 cbrooks on 10.26.07 at 7:26 am

Hi TropicalSeo,

Marchex is taking a slightly different approach than you’re suggesting. They’re actually spidering the web for user-generated content, indexing / normalizing that content, and then publishing it on their premium domains. They bought a company called OpenList a couple of years ago to acquire this indexing / normalizing technology. I think that solves the problem of “seeding” content that you’re talking about.

Of course, they also accept reviews on their domains, so they’re generating unique user-generated content as well.

I don’t have the impression that they’re trying to develop forums, and generate repeat visitors in that sense — I think they’re looking more for reviews.

Another approach (that they may or may not be using) is to use weaker type-in domains to funnel traffic to their best type-in domains. You’re right — the domain that only gets 4 type-ins a day may not generate much UGC, but bundle a couple hundred of those domains together and they do. Perhaps Marchex doesn’t have 300,000 great domains — perhaps they only have 30,000 great domains, and 270,000 modest domains. But combined, they still drive a tremendous amount of type-in traffic that (after some experimentation) will do very well in the SERPs.

One other tremendous strength of this approach is that once they find a technique that works on a particular site, they can roll that technique out across their network of sites easily. (Obviously small networks can do this as well — but it seems to me that the payoffs are substantially higher when you have 300,000 automated sites.)

All told, I think SEO folks that aren’t paying attention to Marchex (or are simply writing them off) are taking a substantial risk.