Domain Parking Continues Downward Spiral

[WhoNet]

DBS:
Domain Parking Continues Downward Spiral
August 4th, 2008

Dark Blue Sea reports another drop in domain parking revenue.

Australian domain name company Dark Blue Sea, which runs Fabulous, reported another drop in domain parking revenue in its latest quarterly update. Just two months ago Domain Name Wire wrote about how the company's parking revenue from its 600,000 domains was down 18% in just one quarter.

The news isn't getting better. In the quarter ending June 2008 the company earned $1,003,000 from its company owned parked domains. That's a further 27% drop in just one quarter.

To be sure, Fabulous sells a lot of domain names in any given quarter, but it is very apparent that its revenue per domain is falling. The company blames a number of factors for this fall:

- the weaker economic environment in the US
- generally fewer advertisers (as observed by Dark Blue Sea) leading to a reduction in bid prices and coverage and hence overall yield received by Dark Blue Sea
- changes to the way that online advertisers can place advertisements via the advertiser interfaces of the major search advertising networks; and
- an overall uncertain strategic landscape stemming from the unsuccessful takeover bid for Yahoo by Microsoft and the subsequent outsourcing of search advertising to Google by Yahoo.

The news isn't all bad. Dark Blue Sea's quarterly revenue from parking other people's domain names is holding steady. It generated nearly $3 million for its clients last quarter. Dark Blue Sea kept about 24% of that; 76% was paid in revenue share and other expenses. It also sold $2,779,000 worth of domains last quarter compared to only $638,000 the same quarter last year.

http://domainnamewire.com/2008/08/04/dbs-domain-parking-continues-downward-spiral

 

[ecalc]

Dark Blue Sea June 2008 Quarterly Update (released 4-August-2008) gives more financial data. The report states that 96,000 of the company owned 600,000 names are profitable, i.e. those domain names that earn sufficient revenue to cover the annual registration expense. It will be interesting to watch how the company manages the unprofitable bulk of its portfolio in coming quarters.