Type-in behaviour changing?

[markfromslo]

I keyed a word into Firefox today (the latest version) and it went to the wikipedia page for that word. Then I went to IE7 and it did the same thing. Other words did the same thing.

Maybe I don't have enough espresso in me yet, but didn't the browsers used to pop a .com at the end of the word and display the [word.com] site? Maybe I'm not just remembering correctly.

If so, this is not good for a percentage of the type-in traffic for names that rely on that. I've never purchased a name based upon the browser plugging a .com after the name, just in case things changed in the future (and everything does).

 

[Seabass]

This is a great topic.

Since 1996, since we started counting uniques, we have notice unique IP's tapering off every year on a downslide. This is something I have NEVER seen anyone mention in any of these forums. I think maybe b/c most of you folks did not start back in 1995, 1996 or even 1997 you can't see what we have seen.

I'll take an example from a top-notch generic domain we own. We have a domain that we did not develop but simply counted the uniques on. In 1997 we were getting 1,200 uniques a day on this particular domain. Today it is around 80 day and it is parked now. It was never developed out. We have seen this trend across all generic domains. Even from say 2003 until now.

Why? Well, many of the reasons stated above are the reason why. But there are so, so many more that it is dificult to list them all or even think of them all.

I'd say along with the other reasons already stated, competion within the .com and the new extensions are somewhat to blame. Also, the rise video games popularity, watching videos on the Net, podcasts, blogs, etc.... all take folks away from searching. Also, Once folks find a site they like they go back to it instead of typing your generic into the browser. The days of "surfing" are essentially over.

Surfers ARE, and will continue to become, more sophisticated and they may rebuke these parked pages. As America's kids grow up using the Internet they are going to be way ahead of most of us and they will spot a parked page a mile away. This may hurt the click rate. I don't know how folks will react when they actually know they are on a parked page - hell, they may appreciate it. Especially if we can get some decent ads on our parked domains one day. I'm especially worried about the new "Page Preview" insertions that Google and the others are sure to implement which will show your page before they click.

Another note on surfer sophistication - on our direct marketing websites we have had up since 1997 we have seen in the last three years customers learning how to use the Whois. They go and get our phone number and call us. This is happening a lot now. It NEVER happend once between 1997 and 2003 if you can believe that. And now at least 100 times in three years they have gone to Whois to get our info. - it's amazing. So, yes, they are getting more sophisticated.

I'd say the uniques will keep going down, but I have no idea where it will stop. The Net's future is so unpredictable in regards to people's surfing habits.

 

[ofclean]

Yep, as people get more web-savvy, parked domains will get fewer and fewer views, and in those cases where one is stumbled upon, fewer and fewer clicks.

 

[jacal1]

Great post! Follow-up:

Seabass - great post! As a follow-up: How do you (and others) see pricing for brandable and/or 1-2 keyword domains being affected. Not a lot bc/ (non-parking) end users still want the domain names, or a lot bc/ they also want built-in traffic to begin with?

 

[estibot.com]

Interesting notes Seabass, thanks for sharing. I also believe that the age of parked pages has seen its prime and parking as a viable business model may decay in the near future. Good point about the next generation - when they grow up, if they even use the current domain.tld url system then, they will go to their favorite portals, or used the ever-improving search engines to pinpoint their website of interest amongst the bilions of pages.

To me, these developments suggest that the (near) future of profiting from portfolio domain names is definitely website development. On the other hand, if you are purely in the domain name buying and selling business, all you need is enough revenue to cover the renewal fee in order to be able to hang on to the name until someone wants to buy it.

Carjamlangley- I agree with you that authority is a main selling point for generic domain names, regardless of the type in traffic.

Short, brandable domain names will still be good for speculation. If the internet continues existing as we know it (domain.tld navigation), brandable names will continue to be in high demand.

Josh

 

[carjamlangley]

In 1997 we were getting 1,200 uniques a day on this particular domain. Today it is around 80 day and it is parked now.

Thanks for that piece of info, Seabass. It's posts like yours that make me stick around here. :]

 

[markfromslo]

Excellent information Seabass. It reinforces my opinion that people should not overpay for type-in traffic. The future's uncertainly in browser functionality and surfer's behavior make it too risky.

Typein traffic, should of course be a factor, but the ROI on that should be measured in a very short number of years, not a decade. And there needs to be other inherent value in the domain. If the domain is djfi8dk.com, there is no value in it at all if/once the typein traffic subsides. On the other hand, if it is OfficeFurniture.com, for example, then the name is still worth a lot, even without type-ins. Same thing if the name is a great untrademarked phonetic name, like one that I recently sold, Zoobie.com, for example.

A namesshould be brandable, meaningful or memorable, and they have to be attractive to a business (as opposed to a pajama blogger) in order for me to like it.

 

[Seabass]

Seabass - great post! As a follow-up: How do you (and others) see pricing for brandable and/or 1-2 keyword domains being affected. Not a lot bc/ (non-parking) end users still want the domain names, or a lot bc/ they also want built-in traffic to begin with?

jacal1 - It appears that many of the sales are brand name domains, but to be honest we have not bought many brand type names - just prime generics. We don't sell domains at all. Just development and parking.

Regarding one or two word domains, you can't beat one word domains. There are so many reasons why a one word is, or could become, desirable in the future, two word domains are good too, as are some three, and very, very rarely four word domains.

What I would say though is that these domain prices are getting ready to go up and any marginally profitable domains that us "domainers" own ought to consider dropping or selling now. If the domain market goes South, so to speak, domainers will be cutting loose millions of domains that only make a few bucks a year. That is why we should concentrate on on quality generics with substantial traffic and high bid price so that any downward trend won't put your Net profits in the red. In other words you will be able to weather the storm becuase of your "quality factor". Forget how many domains you own and focus on quality domains. It's easy to think you are going some place because your domain portolio is getting bigger, but quality is what will save the day.

Imagine if you spent $20,000 a year to own a portfolio, and it produced $20,000 in profit, but then some consumer reaction to parked pages, new tech comes along, or 100 million new parking pages come along and begin to pass the newfound uniques on the the advertisers thereby causing excess "ad inventory", or whatever else you can imagine, and now that same portfolio only makes $2,000, or god forbid is losing money. If you made $5,000 your return on your investment of $20,000 is not so rosy compared to other investments. Also, not to mention that domain prices could plummet.

You look at any investment - coins (1909 us penny) , stamps (upside down airplane), cars (57 Chevy), basball cards (1909 Honus Wagner), real estate (California), the ones that go up 1000% or more in value are the very best of the best. All the ones below the best of the best only go up 100%, or something similar. So, PPC earnings aside, if things get bad your liquidity of your domains will be better and command a better price.

You never know though, parked pages could become the defacto way of accessing info. the fastest in the future, just like an index card at a library - it gets you where you need to go. It may become appreciated if the quality of ads improve and page aethetics improve.

Also, this whole debate about parking/development, I believe, is soon going to go away as it gets to the point where you can't tell the difference between the two.

Sorry I wrote so much!

 

[Seabass]

Excellent information Seabass. It reinforces my opinion that people should not overpay for type-in traffic. The future's uncertainly in browser functionality and surfer's behavior make it too risky.

Typein traffic, should of course be a factor, but the ROI on that should be measured in a very short number of years, not a decade. And there needs to be other inherent value in the domain. If the domain is djfi8dk.com, there is no value in it at all if/once the typein traffic subsides. On the other hand, if it is OfficeFurniture.com, for example, then the name is still worth a lot, even without type-ins. Same thing if the name is a great untrademarked phonetic name, like one that I recently sold, Zoobie.com, for example.

A namesshould be brandable, meaningful or memorable, and they have to be attractive to a business (as opposed to a pajama blogger) in order for me to like it.

Thanks slobizman.

I totally agree with you on only purchasing domains with inherent value in the domain. Forget all the backlinks and other built-up traffic and adjust your bids based on the "direct navigation" traffic only. Try to create a portfolio that can stand on its own without all the backlinks, tradmarked domains, etc..... Backlinks/Trademarks might make you some good cash short term, but where is the long term vialbility of this approach? Prime, high-quality, short, generics and brandables(if you are into domain sales), should be the focus.

Also, I agree with you that keeping your bids down to a only several years ppc income is smart from a buyers perspective, b/c after all why are we in this business - to buy high and sell high, or wait a 20 to 30 current ppc rev. model for the payoff? If you pay high, the only way to get your money back then before you die or get old is to sell it for probably little or no profit, or develop it out. And, development is hard when you speak of hundreds or thousands of sites. At least right now it is. IF, the market tanks on domains you will get burned paying full price for domains. That is why we should cut our risk factor to a minimum when making a domain investment. You could end up with a lot of debt too and a long time to pay it off.

I think our investments should be based on our risk we are willing to take relative to your situation - age, disposable income, health isssues, etc... The prices are getting more speculative however - especially on SnapNames. Many bidders seem to be paying current end user prices. Many, obviously are not resellers. We already know IREIT's and whatnot are not selling domains, but as we have seen they are having problems getting quality sites develped so far. I guess we will have to use them as bellweather to see where they fail and succeed - after all, they should know more than any of us what the right thing to do is considering the talents folks they are now employing and all the disposable cash for experimentation, etc.....

The domain I spoke of before that has gone from 1,200 uniques down to 80 still has a "brand value" above a 7 year PPC income multiple that makes it worth over $1,000,000 in my estimation/opinion. If you take the Sex.com case example - the owner, Gary Kremen, realized that the brand of the name had a value independent of the income multiple sales formula. The name has the potential to grow so much that the current yearly income multiple formula was not a justified for use in valuing the domain. Maybe Sex.com is an exteme example, but you get the point.

I wanted to make one last comment about future of type-ins:

I expect to see browsers such as IE, Netcape, Firefox, Opera , etc... try to take as much of that traffic away from us as possible - the financial incentive is too high not to. Also, I believe that MicroSofts new Typo-Patrol is being launched to attack Google and Yahoo. What I mean is that right as Microsoft enters the paid parking platform they could, if typo-patrol gets built into IE and is widely adopted, crush much/most the typo traffic Google and Yahoo receive from parked domains thereby leveling the playing field somewhat as they start to try to steal domainer's business away from Google and Yahoo. So, now is time to release all your loser typo domains, and marginally profitable typos, unless you can see another use for them such as affiliate programs, traffic for one of your others sites, etc..... It's time to cut the fat from the portfolios, so to speak, and make these portfolios lean. The money saved by releasing these weak domains could be used to buy one, two, ten.... quality domains.

 

[markfromslo]

This is such a good conversation I posted the link to my DomainRookie.com blog.

 

[Lasher]

I've noticed increased traffic on some of my .us domain within the past 3-4 months. I'm speculating it is due to the fact the .us extension is becoming more visible to the average web surfer.

I've seen this too. In fact, several .US domains I was going to drop because I don't think they have strong sales potential are now receiving enough type-ins to pay their own regfee, in which case they're an indefinite hold.

The main point of this thread though I believe is the fact that in the past, typing 'stocks' into your browser would default to 'stocks.com'. Now typing 'stocks' into several browsers will default to the first google (or other engine) results for 'stocks'. Ironically this lowers the value, in ppc terms only, of stocks.com, but stocks.net, stocks.org, stocks.us or any other extension getting traffic would not be affected.

(Smallprint - one could argue users only ever bothered to try stocks.net, stocks.org, etc if they didn't find what they were looking for on stocks.com and if the new results are more relevant then other extensions WILL be affected. But you get the idea).

 

[Seabass]

I've seen this too. In fact, several .US domains I was going to drop because I don't think they have strong sales potential are now receiving enough type-ins to pay their own regfee, in which case they're an indefinite hold.

The main point of this thread though I believe is the fact that in the past, typing 'stocks' into your browser would default to 'stocks.com'. Now typing 'stocks' into several browsers will default to the first google (or other engine) results for 'stocks'. Ironically this lowers the value, in ppc terms only, of stocks.com, but stocks.net, stocks.org, stocks.us or any other extension getting traffic would not be affected.

(Smallprint - one could argue users only ever bothered to try stocks.net, stocks.org, etc if they didn't find what they were looking for on stocks.com and if the new results are more relevant then other extensions WILL be affected. But you get the idea).

I've noticed the increase on high quality .us as well - especially one word domains. Quite a few are profitable now, not very profitable but still ......

One thing that has occurred to me, actually several years ago, in regards to what you are saying about surfers trying the .net, .org, us. etc... because they did not find what they want at the .com. Imagine, if you will, the Net matures a whole bunch more and industry leaders in their class, like Monster.com, have to compete with developed-out, serious sites like Jobs.com, Jobs.net, Jobs.us, Jobs.org, Jobs.cc. This is assuming, of course, these sites are developed out seriously. They could have an unintented "franchising effect" (like McDonalds, or , meaning they even though they compete they build each other at the same time. They may have some serious reach. If the surfer only has to keep changing the extension (four characters) to get to a new fresh page with a serious site behind it, it will in my opinion become the "new way" to browse for sites, replacing search engines as the primary way of searching possibly.

So, for this to happen, it is assumed that .com's will be mostly developed out well and then the rest of the folks that want in on a generic domain will start developing out the other favorite extensions. After much development of the other extensions takes hold then you could start to see searches by changing only the extensions take off.

Still, development needs to pick up substantially for this to happen. We need more cash and easier tech. to work with for this to accelerate. This could still be 20, 30 or more years.

If the major extensions do get developed out, uniques could go through the roof by the simple extension changes.

 

[markfromslo]

Still, development needs to pick up substantially for this to happen. We need more cash and easier tech. to work with for this to accelerate. This could still be 20, 30 or more years..

In 20-30 years, we won't even recognize the net and I seriously doubt there will be the same concept of domain names as there is now, extensions or not. With the exponential acceleration of technological change, we'll be in full immersion virtual reality with powerful artificial intelligence. We'll all be out of this business and into something else.

As an aside, I highly recommend to anyone interested in the speed of technological change, to read Ray Kurzweil's book, The Singularity is Near-when Humans Transcend Biology. People just have no idea how fast things will change. It's way beyond simply Moores Law. For example, the next 100 years will see 20,000 years of technological advancement gauged by today's rate of advancement. It's all exponential, and he even draws a consistent chart back from prerecorded history. Bacially, the more we know, the faster and more we can build upon it.

One can't look at the next 20 years and judge it's change by looking at what has happened in the previous 20 years.

Update: Here's Kurweil's website: http://www.kurzweilai.net/. There is a great daily email newsletter you can sign up for. Really good stuff for the futurist minded.

If you don't know his name, he invented, among other things, voice recognition for computers.

 

[Seabass]

In 20-30 years, we won't even recognize the net and I seriously doubt there will be the same concept of domain names as there is now, extensions or not. With the exponential acceleration of technological change, we'll be in full immersion virtual reality with powerful artificial intelligence. We'll all be out of this business and into something else.

As an aside, I highly recommend to anyone interested in the speed of technological change, to read Ray Kurzweil's book, The Singularity is Near-when Humans Transcend Biology. People just have no idea how fast things will change. It's way beyond simply Moores Law. For example, the next 100 years will see 20,000 years of technological advancement gauged by today's rate of advancement. It's all exponential, and he even draws a consistent chart back from prerecorded history. Bacially, the more we know, the faster and more we can build upon it.

One can't look at the next 20 years and judge it's change by looking at what has happened in the previous 20 years.

Well you might just be right, but so far, what's it been, 37 years so far, and the Net still works the same now when you type in a domain name?

I don't think the Net's infrastructure in regards to domain names will change so much, as that is how it was engineered, but we might see some other tech come along and relegate domains as useless or less useful. Maybe something outside the Net will make accessing info. even easier - something our little minds can't conceive of yet. But you have incertainties with any investment.

I think domains will still be around - how much they are utilized, who knows? We still have the telegraph, even though they recently took it off the course menu for radio broadcasting degrees, from what I read. Maybe it will be just another form of communication.

 

[markfromslo]

In 1970 there was a browser that you could key a word in and it would had a .com to it and bring up a website? Maybe, but I don't think so, but maybe I missed it because I was in a trade school learning to program on punched cards.

True, the infrastructure is the same concept and will likely stay the same concept, but everything around it is changing. Of particular interest to this conversation, is how "search" is really changing/improving. Heck, Google was built simply around that concept alone. How we find information is changing quickly, and that affects the domain name investment rules as it occurs.

In 10-20 years your brain may communicate directly with the net, which will be everywhere and your brain/body will just be another node on it, and you may simply think what you want to know and the implanted robotic module will process your thoughts and find the best virtual whatever for you to virtually step into. Who'll care about the domain name?

Sounds wild, but so did sequencing genes, building on a nanometer scale and cloning body parts for spare parts. 37 years of past change is will be equalled by the next 7-8 years of future change, in magnitude. Anything can happen.

Well you might just be right, but so far, what's it been, 37 years so far, and the Net still works the same now when you type in a domain name?

I don't think the Net's infrastructure in regards to domain names will change so much, as that is how it was engineered, but we might see some other tech come along and relegate domains as useless or less useful. Maybe something outside the Net will make accessing info. even easier - something our little minds can't conceive of yet. But you have incertainties with any investment.

I think domains will still be around - how much they are utilized, who knows? We still have the telegraph, even though they recently took it off the course menu for radio broadcasting degrees, from what I read. Maybe it will be just another form of communication.

 

[carjamlangley]

How we find information is changing quickly, and that affects the domain name investment rules

Surfers are getting savvy about how they find their information and whom they believe. Do they believe if they type in a name the best information will come up, or have they (will they) discover a better way?

Surfers are reading blogs and forums and linking onto other sites from there because they see authenticity and follow the links from one recommendation to the next. They are participating in online communities, which speak directly to their personal interests. I think these communities, this way of communicating, is in its infancy and will grow exponentially and soon become the way to surf. More and more, the web will connect likeminded people who will use each other to bounce from one site to the next and type in traffic will decrease because of it.

 

[techahben]

I am still going to first site on google search for the term. (sort of like I search on google and hit I am feeling lucky)

My firefox version - Firefox/1.5.0.10

 

[markfromslo]

Yes, the social networking (and recommendation) phenomenon is changing the landscape of the web.

Surfers are getting savvy about how they find their information and whom they believe. Do they believe if they type in a name the best information will come up, or have they (will they) discover a better way?

Surfers are reading blogs and forums and linking onto other sites from there because they see authenticity and follow the links from one recommendation to the next. They are participating in online communities, which speak directly to their personal interests. I think these communities, this way of communicating, is in its infancy and will grow exponentially and soon become the way to surf. More and more, the web will connect likeminded people who will use each other to bounce from one site to the next and type in traffic will decrease because of it.

 

[estibot.com]

Here's an interesting article that's related to this thread:
http://www.dailydomainer.com/200733-200733-death-of-domain-parking.html

Example site of domain parking 2.0 business model:
http://www.wehow.com/

Josh

 

[Seabass]

Well, look what I stumbled on this morning - a report from REIT about traffic trends regarding direct navigation. Their findings are contrary to what our company has seen in regards to traffic trends. But, then, we don't have 200,000 domains, but still we have thousands and you would think that would be a good sample. This report actually suprises me a good bit, b/c I just haven't seen the increase in the uniques over the years up to 2007.

This is a good read and very uplifting in regards to this topic. I would like to believe it all, but my own numbers keep bringing me back down earth. And, our domains , for the most part are high quality generics.

This is a PDF file.

http://www.internetreit.com/downloads/ica_growth_3.pdf

 

[MinionDH]

This is a PDF file.

http://www.internetreit.com/downloads/ica_growth_3.pdf

Thanks for the link. I was reading about this at the ICA website last month but was annoyed that I couldn't open the PDF (excellent report btw).

Update: I found this direct navigation fact sheet at the IREIT website. It's short but there are a few interesting observations listed.