Rick Schwartz Says Domain Owners Getting the Shaft While "Partners" Roll in The Dough

[Ron Jackson]

With the T.R.A.F.F.I.C. Miami conference coming up October 17-20 at the Loew's Hotel on South Beach - the only T.R.A.F.F.I.C. show that Co-Founders Rick Schwartz and Howard Neu are staging this year - we hooked up with the long time partners for a preview interview. However, the conversation quickly morphed into one covering much broader ground once we started talking about recent changes in the industry and how the current business environment will be addressed at T.R.A.F.F.I.C. Miami.

Schwartz said, "Domainers are not happy with the trends. They feel like they are getting the shaft while our so-called “partners” are rolling in the $$$ we are making for them...The end user pays $5.00 for a click, but we get 5 cents and we are supposed to believe that is an 80% cut? I think every domainer knows this is garbage and that it has to change. I believe that T.R.A.F.F.I.C. is going to start a conversation that Yahoo and Google cannot ignore. I have listened to their empty lip service for six years and now it is time for show and tell."

Read the full article here: Rick Schwartz Takes Off the Gloves: Says Domainers Getting the Shaft While "Partners" Roll in The Dough - More to Come at T.R.A.F.F.I.C. Miami

 

[Sparhawke]

Will certainly read it

 

[liquidcherry]

What is interesting to me is that he listened for 6 years...

Cheers

Liquid

 

[dax44]

Perhaps its time domainers started their own monetisation system - simply pool all the domain traffic , grouped by language/geo etc. and sell off keywords/category clicks to the highest bidders direct - maybe some TM / typo issues to solve not insurmountable. I imagine with several (tens?) million uniques per day companies would be very interested in 'loans' , 'home insurance' USA geo referrals for example .. totally relies on critical mass to work, and a trusted, not-for-profit outfit to run it (perhaps that's the difficult bit).

Well I have around 2500 uniques per day to throw in the hat... anyone else?

 

[labrocca]

Schwartz said, "Domainers are not happy with the trends. They feel like they are getting the shaft while our so-called “partners” are rolling in the $$$ we are making for them...The end user pays $5.00 for a click, but we get 5 cents and we are supposed to believe that is an 80% cut?

Someone needs to tell Schwartz to build his own websites then. He's been shafting internet users by redirecting them via his parking pages for years all while charging some company a fee to do it. He'll not get any sympathy outside of domainer circles. For him to make these comments must mean his income is taking a real hit. For a guy that thinks he knows it all as the "Domain King" one has to wonder if he isn't more like a "Domain Dinosaur". Has he ever taken one of his very valuable domains and built something usable?

He says domain investors will remain constant and that's true but domain value will not. And those buying domains will likely be end-users versus the trading that existing for years between resellers and domain parkers. There was a time where high-end domainers and companies like BuyDomains would make offers to small time domainers but I don't see that happening anymore. Everyone has inventory they want to sell and the only buyers are end-users who now have lots of choices and many are willing to go brandables forsaking previously valuable keyword domains.

I'm almost never impressed by what Rick says and while I can't say I know him personally enough to dislike him I really dislike his representation of the domain industry.

To me, traffic is the #1 commodity of the future. Targeted traffic. WE as a group all know that. But the 6 billion others on the planet do not and when they do, I see a different opportunity. I see retailers coming to T.R.A.F.F.I.C. I see T.R.A.F.F.I.C. as the “Alternative to Google and Yahoo”, going direct to domainers as opposed to the current system.

I just want to slap my forehead. Is this really his vision? Seems like a pipe dream. He's really an upsell king. Proof is his move to pay $200k for Flowers.mobi in an attempt to overvalue that market. It's probably the biggest fail in domainer history.

In the early days I would rather piss the traffic into the ocean than give it to somebody where a $50,000 sale earned me 5 cents. Shove it! Is my attitude. I didn’t want the 5 cents and therefore they never saw that $50,000 sale.

Does he really think there are clicks earning companies $50,000? Wow he's clueless. Doesn't he know Google is free. Does he think his domains are that valuable to the web space he doesn't need valuable content?

This guy just makes me mad with his arrogance and ignorance.

 

[memorablename]

Perhaps its time domainers started their own monetisation system - simply pool all the domain traffic , grouped by language/geo etc. and sell off keywords/category clicks to the highest bidders direct - maybe some TM / typo issues to solve not insurmountable. I imagine with several (tens?) million uniques per day companies would be very interested in 'loans' , 'home insurance' USA geo referrals for example .. totally relies on critical mass to work, and a trusted, not-for-profit outfit to run it (perhaps that's the difficult bit).

Well I have around 2500 uniques per day to throw in the hat... anyone else?

I have over 2,000 domains to throw in, .com/.net/.info/.TV mostly Also have exchange that can be used at AdExchange.tv. Anyone interested in joining a domainers ad network or starting a domainers ad network, PM Me

 

[DylanButler]

Seriously the only way to compete with google is to try. Right now, facebook is best positioned to do that, although it is a ways off (earning ~$5B per year while google makes ~$9B a quarter). And facebook's CPC prices are just as high, yet all the profit goes to them! So they are out of the mix as well.

Perhaps its time domainers started their own monetisation system - simply pool all the domain traffic , grouped by language/geo etc. and sell off keywords/category clicks to the highest bidders direct - maybe some TM / typo issues to solve not insurmountable. I imagine with several (tens?) million uniques per day companies would be very interested in 'loans' , 'home insurance' USA geo referrals for example .. totally relies on critical mass to work, and a trusted, not-for-profit outfit to run it (perhaps that's the difficult bit).

Well I have around 2500 uniques per day to throw in the hat... anyone else?

Enter this idea, creating a new PPC marketplace (like a public bidvertiser) where quality guidelines are strict but payouts and CPC are fair. If we could get 100+ publishers behind it, advertisers could have a new viable alternative to google, YPN, or facebook, all of which charge exorbitant PPC prices and pay publishers little to nothing in many cases.

Granted, the hard part would be getting advertisers to try it out. However, I can think of a few ways to do that. You could make it invite only (gmail, google chrome, gilt.com all got popular this way), or you could otherwise promote it. The less competition the better for the advertisers, so I imagine most advertisers would jump on the idea of cutting their PPC prices in half.

 

[enlytend]

Labrocca - very well said!

The end user pays $5.00 for a click, but we get 5 cents

Does he know for a fact that the advertiser paid $5.00 for the click?

• The bid prices shown in the estimator tools are for the search network, not the content network (Adsense), where they're usually much lower.
• Those bid estimates are just that - estimates. Those numbers are a guide, they're not that accurate. I have a lot of keywords in campaigns I run where my clients pay less per click than the estimated "first page bid" price, with mid-page placements. There are reasons for that, but in short, if you went by those numbers their ads shouldn't be showing on the first page at all.
• Smart Pricing (applies to Adsense) - if the traffic source is not likely to convert, the advertiser is charged less.

I personally think everyone who complains about what they get paid from google as publishers (either through Adsense or from domain parking) should try to make a decent ROI with an Adwords campaign and learn first-hand what it's like being on the "paying" side of the equation.

 

[mynpid2010]

The end user pays $5.00 for a click, but we get 5 cents and we are supposed to believe that is an 80% cut?

I am wondering, is that really true? I was under impression that it is 60:40 or 50:50.

 

[RJ]

On a typical click about half goes to Google/Yahoo with the rest to the parking company. Most parking services do a revenue split of 50-80% on the remaining revenue with the domain owner.

 

[labrocca]

By that math RJ then most domainers would get 25% from parking which would be $1.25 from a $5 click. Still reasonable for practically zero work. Rick wants it all without any work. I'm positive Rick has special deals and feeds too for all his site earning him a high percentage. If he really cared about other domainers he'd work to open his own parking company where he could make the rules. Given the extremely high cost to attend TRAFFIC I can't help but think his only concern is getting as much money into his account as possible. He likes to play the big shot.

 

[HeyNow]

Rick wants it all without any work. I'm positive Rick has special deals and feeds too for all his site earning him a high percentage. If he really cared about other domainers he'd work to open his own parking company where he could make the rules. Given the extremely high cost to attend TRAFFIC I can't help but think his only concern is getting as much money into his account as possible. He likes to play the big shot.

Bingo!

 

[matt_bodis]

Fact of the matter is that everyone needs to make money, and no one will exist without the other.

Also, domain owner going directly to advertisers on thousands of domains is not only time consuming but resource intensive and to be quite honest - impractical.

I hear it all the time, at conferences, on blogs, on forums - I honestly don't think it's ever going to happen, because the amount of money to put into getting thousands or millions of advertisers costs more than going through the middle men.

It works if you have perhaps 1 domain. Not when you have a portfolio of several thousands.

 

[Robbie]

Fact of the matter is that everyone needs to make money, and no one will exist without the other.

Also, domain owner going directly to advertisers on thousands of domains is not only time consuming but resource intensive and to be quite honest - impractical.

I hear it all the time, at conferences, on blogs, on forums - I honestly don't think it's ever going to happen, because the amount of money to put into getting thousands or millions of advertisers costs more than going through the middle men.

It works if you have perhaps 1 domain. Not when you have a portfolio of several thousands.

Agreed!

 

[domainer700]

Fact of the matter is that everyone needs to make money, and no one will exist without the other.

Also, domain owner going directly to advertisers on thousands of domains is not only time consuming but resource intensive and to be quite honest - impractical.

I hear it all the time, at conferences, on blogs, on forums - I honestly don't think it's ever going to happen, because the amount of money to put into getting thousands or millions of advertisers costs more than going through the middle men.

It works if you have perhaps 1 domain. Not when you have a portfolio of several thousands.

and Google.com is that one domain.