Google (NASDAQ: GOOG) has been sued by Vulcan Golf, because it provides ads on domains that violate trademarks. Actually Google does not allow domain owners to park their TM domains with Google, but no system is perfect and TM domains get through into the Google parking programs. The complaint is a 121 page document (4.3 MB .PDF file) that focuses on Google’s AdSense for Domains program. This is a program for owners of large domain portfolios, who can park their domains directly with Google’s pay-per-click system. The lawsuit says Google actively controls the content and links displayed on each of the domains in their PPC program, hence, it says, Google is allegedly violating trademarks by displaying ad links on TM domains. The complaint not only mentions Google, but also some domain name companies: Sedo, Oversee (DomainSponsor.com) and Dotster (RevenueDirect.com).
Google, Yahoo and other PPC providers will certainly have to face more of these lawsuits in the future, as advertising is migrating from the traditional media to the Internet and more companies make use of Google’s and Yahoo’s pay-per-click advertising platforms. Not only because of this will it be interesting to watch how this lawsuit will play out, but also because it will have a direct effect on the cybersquatting issue. Owners of trademark-infringing domains will get more problems with finding a provider to monetize their domain portfolio in the near future. The domain industry is in an important consolidation stage right now, and domain litigation is heating up.
Go to Eric Goldman’s blog for an in-depth article on this topic.
There is a new post on domains on the New York Times blog “Bits”. The blog post, titled “More Than Just Squatting (on Domain Names)“, features Seattle-based Marchex and talks about the future of domain parking. It briefly explains the model of direct navigation traffic and why it is so valuable.
Marchex owns more than 200,000 domains which they monetize through their own Yahoo-driven parking platform. Now Marchex is going to fill about 110,000 of their niche domains with relevant content and they will also sell ad spaces directly, in addition to displaying the Yahoo pay-per-click links. Examples sites mentioned in the article are SanFranciscoVeterinarians.com, NewYorkDoctors.com and the zip-code domain 10003.com.
[On domain parking:] As often happens with questionable but profitable businesses, a different class of entrepreneurs is now coming in trying to clean up domain parking and conduct it on a larger scale. They have also come up with a more respectable sounding name for their industry: direct navigation.
(…)
Marchex says that about 30 million unique visitors per month land on one of its sites simply by typing in the domain name. Those Web users guess that there is a site out there that fits their particular needs, and they type in the most obvious Web addresses. Marchex now hopes that more people will return to the sites on a regular basis because of the new content.
Founded by Malaysian domainer and entrepreneur Koay Al Vin, a new domain news portal went online today. DNHour is a community-driven news portal similar to digg.com, but focused on the domain industry only. This sounds like a useful service to me, as domains are getting more attention in the mainstream press and there are several domain-related blogs and forums which you should check on a daily basis. DNHour can help you keep yourself informed more easily. From the press release:
Recently launched DNHour.com is the domain name industry’s first revenue-sharing and community-driven niche website. Modeled after the popular social-content site, Digg.com, DNHour.com is designed for members to submit short reviews of the latest industry news with a link to the source.
(…)
According to site founder Koay Al Vin, the portal is for domainers to consolidate all important industry news, compiled and ranked by the community in one central location. Instead of sifting through journals or domain forums, members can now sort for popular news in categories such as Recent Sales & Prices or Domains On Auction.
Good luck, Koay!
A petition has been launched on YouChoose.net against domain parking. There have been 589 signatures as of June 22, 2007. The petition reads as follows:
To ICANN President and CEO, Dr. Paul Twomey
We, the undersigned, are concerned about domain name parking abuse and request that ICANN revisit the Anti-Cyberssquatting Consumer Protection Act and the Trademark Cyberpiracy Prevention Act to ensure that a domain names that are parked would be available for sale at a price tag that would not be considered extortion. We request that “Cybersquatting” issues be discussed, reviewed and formalized this year into a written law to help stop the continuation of domain parking as an extortionist means that cause legitimate businesses to pay high price for the domain name.
As many of you will agree, these people get an important thing wrong: Owning a generic domain and parking it is NOT cybersquatting! You can own as many domains as you like. It is not allowed though to own domains that infringe trademarks. Registering trademark-infringing domains is cybersquatting, but owning generic domains isn’t. Especially the line “request that (…) domain names that are parked would be available for sale at a price tag that would not be considered extortion” is alarming. People from outside the domain industry got to realize the great value of a quality domain and now they want domain owners to sell their domains for cheap because those people got in the game late. Nobody has the right to tell you how much you should sell your domain name for. If they think the asking price is too high, no problem, they don’t have to buy the domain. Also, nobody is extorting money. It’s a fact that domain names are worth lots of money, because they are an important part of conducting business on the Internet and domains hold a great value for companies offering their products and services online. These people who signed the petition need to be educated on domaining. They need to be able to tell the difference between cybersquatting and investing in domains in a legal way. I’ve said this before, but let me repeat it: Domain owners must fight cybersquatting, because it hurts our industry. There are only few black sheep who are responsible for the bad image domainers have in the public, and we can’t let them get away with this.
Phil Corwin from the Internet Commerce Association sounded a note of caution and pointed out other threats to domain owners. For example, he is afraid that ICANN might do backroom deals for their own good but to the disadvantage of domain owners (e.g. the VeriSign settlement). Another issue is that many domain registrars keep expiring domain names instead of letting them go on the market and be auctioned off so that everybody gets a chance to buy expired domains. This practice allowed many registrars to build up large portfolios of traffic domains, which is still legal, but domain investors are at a disadvantage here. There is a conflict of interest that needs to be addressed. And another threat: There is the Coalition Against Domain Name Abuse, which is fighting for legislation against domain owners. I won’t say anything against them as long as they can ensure that they will only take action against blatant TM-infringing domains, but this is not guaranteed! Many companies have already tried to sue domain owners for generic domains in the past. You can read a more detailed summary of Phil Corwin’s speech on Domain Name Wire.
Domainers hold valuable assets and they must stand up now to protect their rights. Otherwise, we might face some serious issues in the near future as companies who missed the start will try to get into the business on the cheap and threaten the rights and assets of today’s domain investors.
iREIT’s Marc Ostrofsky bought Business.com for $150,000 in 1997, and resold it to eCompanies for $7.5 million (stocks & cash) two years later. Business.com, which has been developed and turned into a business directory, is now for sale again. The Wall Street Journal says the price could fetch as much as $400 million, which would be a 26 multiple on the site’s current revenue. Dow Jones and the New York Times are likely bidders, according to the WSJ.
I think Business.com has much potential for future growth if they improve the website and service. So far Business.com doesn’t have anything special to offer, and yet the site is a successful business. Here you see again that a good generic domain can help a lot when providing services or selling products online. The site wouldn’t have been as successful without the domain, in my opinion.
This is funny. The Manila Bulletin reviewed the website ParentsPreview.com:
Have you or your children ever watched a movie or DVD only to be surprised by the amount of language, violence and sex it contained? If so, you’ll understanding of why you need to visit Parent Previews (http://www.parentspreview.com). (…) Parent Previews set out to offer extra information and take the guesswork out of finding appropriate family entertainment. The site classifies the movies according to: In Theaters, Upcoming movies, DVD/Videos …
But ParentsPreview.com points to a Hitfarm PARKING PAGE with nothing but pay-per-click ads. The article even contains a screenshot of the parked page. This shows that many people still can’t tell the difference between a developed site and a parked domain. Lucky domain owner, who has probably seen a nice surge in traffic. 
[via DomainNameNews.com; they have a photo of the article online]
Tucows Inc. yesterday announed the sale of 2,500 domain names from their domain portfolio for $3 million. In addition to that, Tucows will be paid up to $1.2 million if the sold domains meet performance criteria agreed upon in the deal. According to the company’s press release, Tucows thinks they got a fair deal, although there are traffic and revenue-producing domains among the 2,500 names sold.
“This sale indicates some of the latent value of our domain name portfolio,” said Elliot Noss, President and CEO of Tucows Inc. “As I have stated in the past, we will continue to be opportunistic with our domain name assets. While, this transaction does contain revenue-generating assets, we felt that the sale was appropriate. This transaction also provides us with an opportunity to step back and evaluate some operating possibilities. Accordingly, while we now believe our cash flow from operations for 2007 will likely be at the top end of the US$10 million to US$12 million range, we do not expect to be discussing any possible change in guidance until our next conference call at the earliest.”
Link: Press Release
There is a lenghty but very interesting article, written by John Heilemann, in the New York magazine that quotes an anonymous person saying that Google might acquire Apple.
“I think that Google is going to buy Apple,” this person says. “It would be a victory for Apple; they’d get major-league partners, money, and engineers. And it would be a victory for Steve - a huge win that lets him leave the stage.”
The speculation about Google has a ring of plausibility. Google CEO Eric Schmidt is now on the Apple board; engineers at the two companies are collaborating on Google Maps for the iPhone; and then there’s the YouTube deal for Apple TV.
Link: Steve Jobs in a Box
[via Frager Factor]
Hypergrowth of online sales might start slowing down. Online sales have grown 25% or more annually in the recent years, but growth in sectors such as book and ticket sales slowed down in 2006.
The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.
It seems that people aren’t ready yet to buy all of their stuff online. Major corporations such as Dell cannot only rely on online sales if they want to retain or increase their annual growth rates. Therefore, they start getting back to offline markets in order to make good for the loss in additional annual online sales.
The slowdown is a result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits.
Online Sales Lose Steam as Buyers Grow Web-Weary
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