Jan
2008
As the web based business is growing exponentially some key issues need to be looked in to having a holistic view. Some of the business makers having a business specific domain prefer to park the domain and on the other side businesses prefer to develop a domain for making a fortune. Experts have different opinions about both of these concepts.Kevin Leto discussed this issue at length in his writings, “When looking at the debate of Parking vs. Development, much depends on the objectives a domain owner has for his portfolio and the types and quality of his domains”.
In common parlance, a high quality type-in domain will normally have a higher ‘Click through Rate’ (CTR) on a ‘Pay Per Click’ (PPC) page, usually 30% to 40% or even more. On the other hand, a web site will generally have a ‘CTR’ of just 5% to 10%. Because of this situation there is a drop in revenues initially.
Ironically, a ‘Pay Per Click’ campaign never creates traffic growth. It is also not a helpful tool to create a user base. PPC does not offer any other revenue or site feature options. Meaning thereby, it leaves you with limited opportunities. But on the other side of it, PPC has an extremely upside advantage with its simplicity. It is the single source monetization solution for hundreds of thousands of website domains.
Those who think that PPC is better must take a second look in to the concept deeply. Ultimately, PPC is not a huge monetization resource. Kevin Leto says, “If PPC was indeed better than we wouldn’t have any problems selling our fabulous sounding one word domain names to major corporations all day long. They’d be falling all over themselves to pay any price we ask”. As a matter of, it’s not happening and it’s not going to happen, with rare exceptions of course.
Undeveloped and underdeveloped domains would never serve the purpose for any business. Any major business organization would be least interested in acquiring such a domain that has only type-in traffic for a longer time period. Such organization would rather prefer to have a brand domain with loads of users so that the users can be given a positive experience with product information, and services. Such developed domains would be a nice platform for establishing an interaction with the users and also entertain them.
“One of the most popular website, Business.com went from a $150,000 domain acquisition to a $7.5 million acquisition for development as a search engine with companies paying annual fees of $199 to be included and paying for ad clicks to their directory listing, and just recently to a $345 Million acquisition by the R.H. Donnelly company”, refers Kevin.
It seems to be a good option for the domain owners to have such a PPC landing page and minting money. But this strategy alone would never help them making a money factory with their domain. It is never the traffic alone that hits the treasure always. A careful analysis of such a website would reveal that it is the well managed and meticulously created database that creates an established advertisement empire. The advertisers generated with the help of a well conceptualized database can always be converted in to further advertisers for the entire network of domains.
Internet users and specifically the web surfers have no particular landing base. They just click, spend few seconds or a few minutes sometimes, and then hop up to the next site instantly. They do land up on a PPC page often but this is not what a domain owner could desire. A cherished prospective customer walked in to the store and within seconds it moves out to find another opened up door of someone else’s store. That is not a good business in any aspect.
The number game looks mind boggling indeed. A big domain could have more than 25,000 visitors a day and this may continue for even 10 years making it a site with more than 10 million visitors a year. Meaning thereby, this much people or prospective customers did walk in to the online store but none of them was an actual customer. No one of this huge number left their email addresses for future communications. None even bothered to leave an imprint of its choices, preferences, and liking for products. This is a bit more hypothetical but it could happen also. If not in true sense but it may be possible that just five or ten percent of these visitors did so. Therefore, this can never be a foundation for a big business ahead.
Having a different look at this concept gives an interesting picture also. A typical PPC model, for instance, may pay 15 cents a click and gives 60% CTR for a domain on an average. This way in a period of almost ten years at least $10 million can easily be earned. This is huge money, no doubt. This is a successful business, no doubt again.
Business with a developed domain would be ideally and practically different. In the same period of ten years, keeping the number of visitors as same, a considerable number of these visitors would turn in to customers. Many of them would be repeat customers as well. Several others would have subscriptions and even opt for being registered members. These customers would be assets to the domain in true sense. They will provide free word of mouth publicity. It will bring more traffic and more users and more customers.
The generation of revenue may reach to any level, even unimaginable heights. Doing a business with a website and adopting correct practices would generate cash flow automatically. The amount earned could be simply equal to the PPC or could be in any multiple of that.
Key issue is having a website and an incredibly reliable and valuable domain. A customer at this website would be even more valuable asset. This asset could make a fortune for the domain owner.
Both the techniques therefore, are money making techniques but a developed domain model is definitely an ultimate long term business model for creating wealth and not just making money. Of course, not every developed website does wonders. The only good point about this internet business economy is this that it is really less expensive and anyone can always try several alternative concepts without much investments. “You always have your base type-in traffic. That is not going anywhere. If one building doesn’t work, knock it down and put up another until you get it right. It’s that simple”, says Kevin.
