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TRAFFIC -- State of the domain name industry

Update from the T.R.A.F.F.I.C. conference in Hollywood...

Some thoughts from the seminar "The industry yesterday, today and tomorrow"

Matt Bentley, Chief Strategy Office at Sedo, spoke on the advertising trends in domain names. People see the domain name industry as branding, assets, real estate... but we are increasingly realizing it is more an advertising industry.

"There are more domains registered than every before," Bentley said. But corporate advertisers are not jumping to put links of parked domain names, and that's because advertisers don't fully understand how domain traffic works, he said.

He said a way to support advertisers is to use things like policies and controls and "supporting companies that are doing this to have a longer term sustainable industry."

Jonathan Boswell, CEO of LeaseThis.com said more and more advertisers are becoming aware of the domain channel, but there have been disconnects in understanding the benefits. The biggest disconnect is the issue of branding.

"Kleenex never wants to be known as tissue," Boswell said of Kleenex buying tissue.com. But he tells companies, "It's not about branding a generic. It's about owning the words that are associated with your brand." And that's when it makes sense to advertisers, he said.

Also, his company does not even refer to domain names as domain names when speaking with advertisers. "We say domain assets," he said. "They get that, they understand that."

When Boswell and his company talks to corporations, "We’ve been really helping them understand that domains are key to helping them understand their growth.," he said. If you want to really grow in your branding opportunities ... domains are going to be key to that."

Adam Dicker, president of DNForum.com, talked about the future being in development of sites.

"We tend as a domainer to constantly be buying and looking for domains and bargains," he said, and never build out the sites they buy. "We need to focus more and build those one or two domains."

A parked page is not going to sold for $50 million dollars, he said. But if these parked pages partner with a good company and put up good content it will be worth more.

"I personally feel when I sell a domain, it’s like giving up a child for adoption," Dicker said. He suggested that there needs to be a better system to evaluate the worth of domain names. He also said that it's important to realize every domain name has a value to somebody -- even Zzzp.com, which someone offering him $1,000 to sell, he said.

Owen Frager, CEO of The Frager Factor, said the most valuable domains are when brands use generics in their marketing.

"Domains, like life, are either memorable or forgotten," Frager said. He brought up the example of the commercials for Nowwhat.com, which is a site for State Farm Insurance.

"If that was commercial for State Farm with State Farm's website on it, they would never go to that website," Frager said. He added, "domain names that may seem like worth less to us because they have more words in them … but look at freecreditreport.com."

Sporting a  a white fedora is Leland Hardy of NewYork.com, who talked about the success of building NewYork.com with quality content.

"As the shorter domain names are taken ... longer names will have increasing value," Hardy said. He said he has noticed increasing trend of what he calls "intuitive domain names" -- something like Handmadedesktopcomputers.com, where it is clear to the consumer what is being sold there.

Ammar Kubba, CEO of TrafficZ.com, said a big challenge is that "People label us as domain squatters and just generally don't have good things to say."

"One of the things we really need to do is educate people and get more involved in the industry groups that are trying to promote our good will and reputations," Kubba added.

One solution he proposed is to advocate more transparency in the industry and with partners to not seem shady.

Peter Lamson, senior vice president and general manager of domain marketplace for NameMedia.com, said the domain name buyers should focus on the huge demand for local niches that small businesses will want as a branding vehicle.

An example he gave was HollywoodLandscaper.com. It might not be very valuable to some people, but a landscaper in the city of Hollywood is going to pay a few thousand for it because it is of high value to them.

Dan Warner, COO of Fabulous.com, encouraged the audience to stop thinking about traffic as the defining measure of if a site is valuable.

Why does Fabulous.com have value? Because it is a brand name, he said. "People have become hooked on the heroin, the crack, of traffic. Traffic is good… but it’s not necessarily the best way to think about your assets and where they stand."

"You have to think about the nature of what you’re actually selling," he said.


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