Archive for July, 2008



Market for virtual goods

http://techland.blogs.fortune.cnn.com/2008/07/14/cashing-in-on-virtual-goods/?section=magazines_fortune

According to this Fortune article, the market for virtual goods is huge: In China, it is even bigger than online advertising! Now, I knew that there were lots of people spending their hard-earned money on virtual items they would then use in video games, but just how big the market really is I did not know.

It turns out that in China gamers spend an estimated $1.2 billion annually on virtual goods. For comparison, online advertising spending in China has been about $1 billion, a staggering 20% less than spending on virtual swords, armors or the other equipment and items you need in an online game.

And this market is still very young, so notionally it’s still a good time to enter. But unfortunately, getting into the market for virtual goods as a seller might turn out not to be that easy after all. There are lots of professional companies hiring hundreds of Chinese gamers, who sit in front of their computers for countless hours, providing their labor for cheap in order to get their employers the coveted virtual goods which the company will later put up for sale on the Internet. So simply playing video games on your own won’t be very productive compared to the level of professionalism of these Chinese gaming companies.

Still, this is yet another great opportunity that has come along with the Internet in the recent years. Maybe starting a specialized trading platform or auction house for virtual goods could be profitable, as well. (Live auctions, anyone?)

Lots of untapped opportunities on the web waiting to be picked up by us and turned into something valuable.

Multiple domain auctions at TRAFFIC NYC 2008

Rick SchwartzRick Schwartz, co-founder and organizer of the popular T.R.A.F.F.I.C. domain conferences, has recently made an announcement that there will be multiple live domain name auctions held at the upcoming TRAFFIC conference in New York City in September.

In the past, it has only been Moniker providing its auction services, but for the first time there will be some other auction houses selling domains in New York, too.

This is indeed, as Rick calls it, a “game changer”. Many domain sellers have complained about Moniker having unfavorable broker agreements, exclusivity periods that were too long (often longer than 100 days) and commissions that were too high. All this might be about to change, as other auction houses getting access to the exclusive TRAFFIC events will cause competition to go up, which in turn should be an incentive for Moniker to reconsider the terms of its aftermarket services.

From Rick’s blog:

As is stands now we believe there will be up to 5 different auction companies holding live domain auctions in New York City in September. Moniker will continue to be the “Premiere” auction at T.R.A.F.F.I.C. as they have been. As you might imagine, this was not an easy decision. Monte and his crew have done a great service to us all over the years. Just sometimes what is good for one company may not be in the best interest of an entire industry. So kudos to Moniker for doing what others would not do when none of us knew the outcome.

Last year the New York TRAFFIC show produced a record breaking $15M in auction sales. I believe that is more than all other live domain auctions at other shows combined for both 2007 and 2008!! We have the right location at the right time with the best domain audience. Including other auction houses will be effective, good for the growth of the industry, make things very exciting and open things up that will create lots of energy. Like I said, this is a game changer and we are all big winners. More info will be released soon.

Most of the domain auctions held this year haven’t been as much of a success as the auctions of 2007. I think that is in part because of the slowdown in the overall economy and because of the increase in energy prices and living expenses. Buyers have become more careful about spending their money in the right places.

The decision to feature more than one domain auction could keep buyers excited at the conference by offering higher diversity and more domains to choose from. Although this doesn’t guarantee successful domain auctions, innovation is always good and I hope this change will ultimately help the TRAFFIC conferences and the domain aftermarket to grow.

Yahoo again rejects Microsoft offer

Microsoft, together with Carl Icahn, has made a new joint offer for Yahoo’s search business, but Yahoo once again rejected Microsoft’s offer.

However, in a press statement released today, Yahoo also said it was now willing to sell the entire company to Microsoft at $33 a share:

Yahoo!’s Board points out that a transaction to acquire the whole company would be much more straightforward and involve far less risk than the new proposal or any similar alternative. The Board believes a whole company transaction could be negotiated and executed prior to August 1st. In rejecting the Microsoft/Icahn proposal, Yahoo! not only repeated its offer to sell the entire Company to Microsoft for at least $33 per share, but also offered to negotiate an improved search only transaction. Microsoft rejected both offers.

This is the same amount previously offered by Microsoft in May, which Yahoo rejected at that time. Yahoo’s behavior is very telling, as it shows that the company’s directors are dying to avoid Carl Icahn getting control over Yahoo and replacing its board of directors. But I can really understand that Microsoft doesn’t want to offer the same price for Yahoo anymore, because if negotiations will go in favor of MSFT, they could get YHOO for even less than $33 per share. On the other hand, it might also make sense for the software company to only buy Yahoo’s search division at this point of time.

In its official press release, Yahoo gave the following reasons for not accepting the proposal by Microsoft and Icahn:

The Board’s rejection of the proposal was based on a number of factors, including the following:

1. Yahoo!’s existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.

2. The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo! for a full and fair price, including a control premium.

3. The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo!’s remaining non-search businesses which would be overseen by Mr. Icahn’s slate of directors, which has virtually no working knowledge of Yahoo!’s businesses.

4. The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. The Yahoo! Board believes these moves would destabilize Yahoo! for the up to the one year it would take to gain regulatory approval for this deal.

Roy Bostock, Chairman of Yahoo! said, “This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!’s stockholders in mind. Clearly, Microsoft, having failed to advance in search, is aligning with the short-term objectives of Mr. Icahn to coerce Yahoo! into selling its core strategic search assets on terms that are highly advantageous to Microsoft, but disadvantageous to Yahoo! stockholders. Yahoo’s Board of Directors will not allow that to happen. Yahoo!’s Board remains open to any transaction that delivers full value to our stockholders – we just do not believe such a transaction should be dictated by Microsoft and a single short-term investor.”

So, the Microsoft/Yahoo saga isn’t over for a long time yet.

Tucows still pulling domains from Afternic

As reported by Dot Weekly and TheDomains.com, Tucows is still pulling their expired domains out of auctions at Afternic.

But Adam Gross and Pete Lamson from NameMedia (Afternic’s parent company) and Ken Schafer from Tucows have posted comments on TheDomains.com, explaining that there were technical issues that caused the domains to be removed from the auctions:

Adam from NameMedia here. As discussed, there were technical issues in Afternic’s implementation that occurred. The result was that Afternic was not updating the mutual inventory as frequently as it should have, so Afternic made names available for preorder that should not have been.

I guess that means we won’t be seeing any more of Tucows’ domains being pulled from Afternic’s platform in the future. Let’s see.

Continue reading:

http://www.thedomains.com/2008/07/11/tucows-still-pulling-their-own-domains-out-of-auctions/

http://www.dotweekly.com/2008/07/11/tucows-problem-still-is-not-fixed-at-afternic/

Domaining Ideas: HappyBirthdayDomains.com

HappyBirthdayDomains.com

There are still lots of opportunities in the domain space. I’ve said this more than once before. A few days ago I received an email from the guys at HappyBirthdayDomains.com, asking for my opinion on their new project.

On their website, they list hundreds of branded domain names that users can lease to put happy birthday greetings on. Each of the domains includes a first name, so that you can, for example, create a special greeting page for your friend Brad on HappyBirthdayBrad.com.

This certainly is an interesting idea for making money off domain names. Lots of promotion has to be done to get the word out, but once more people know about this service it might eventually take off. In any case, this is a good example showing that by being creative you can find different ways of monetizing your domain portfolio in times of falling PPC revenues.




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