Yesterday Elliotsblog.com had a post entitled “not overly critical of parking companies”
In his post Elliot says in part:
“Yes, there is a BIG issue of them working within a “black box,” not sharing how they calculate revenue share and other information with domain owners. Most are anything but transparent when it comes to their operations, and they likely take a very large cut of revenue from our domain assets.”
That of course IS the issue.
When someone chats with a parking company about bringing business over to them, one of the first questions every domain holders ask is:
“What is the revenue share”?
That question is not only an important one.
Its a vital one
Its certainly the same question almost every business in any industry asks in before entering into any business relationship.
How much money will we make ?
What is our share or percentage?
What will this cost?
The same question gets asks and over against in every business transaction millions of times a day.
The answer has to be truthful.
In the domain business if a domain holder asks a parking company what is revenue share I will get from you, we have the right to get an accurate answer.
If a domain holder is told he will receive a revenue share of 80% for example, that means that the domain holder should receive $.80 out of the every dollar that parking company receives from its upstream partner.
We understand that parking companies won’t tell us the revenue share they have with the upstream partner, but the stated revenue share the parking company says we are getting, we must get.
Out of the parking companies share, they have to pay their overhead, offices, staff, and out of that share also comes advertising, marketing and sponsoring industry events.
As domainers we have to pay the costs of maintaining that domain name.
We also know that cost is going to rise 7% a year for 4 out of every 6 years from now on.
The carrying cost of the domain is borne 100% by the domain holder, none of it is the parking companies cost.
Also the domain holder has all risks of holding the domain, including lawsuits and UDRP defense.
None of that cost comes out the parking companies either.
Now IF Frank’s parking venture proves by in large to pay out more money to the domain holder’s than the domain holders received at the parking companies for the same domains and same traffic, then there will be only one conclusion, that parking companies are paying a smaller percent of the revenue they agreed to pay.
Lets say this one is too early to call.
But lets also be clear.
Lying is not an acceptable business practice.
Certainly not one that involves one of the fundamental representations that the business relationship is built on.
So IF the revenue domain holders receive from InternetTraffic.com winds up being substantially higher than the traditional parking companies for the same domains and the same traffic, then you bet I’m going to be highly critical of parking companies.
and I won’t be alone.
I’m amazed how opaque the parking business is. It’s great to see someone enter who claims to do things differently.
Frank is coming on the DomainSherpa show this Friday so we can learn all the details of his latest venture. If you have any questions for him that you’d like to see him answer, please email me at Michael (at) DomainSherpa (dot) com.
And before anyone starts a pity party for the parking companies let’s keep in mind this could go the other way – vindication for those parking companies that have honest all along.
If XYZParking promises 80% revenue share and Frank promises 90% share, and income with Frank is about 10-15% higher than at XYZParking.com then you’ll know.
DP
Correct and in your example that is the way it should be.
If XYZparking promises an 80% rev share and if Frank promises 90% (your numbers) then the results should ONLY be 10-15% higher.
But what if the numbers are 50% higher?
What will that tell us about the numbers we have been getting for years?
🙂
I don’t disagree with anything you’re saying. The blog post I wrote was from my own personal perspective, which is different than yours and others’. For someone like me who has never made revenue generation from domain parking a priority, the parking companies have given me more than I’ve given them.
For one, I doubt I would have taken the initiative to create “for sale” landing pages across my hand registered domain names, of which I’ve sold many as a result of inquiries related to the note on my parked pages indicating the name may be for sale. It’s basically free hosting and no messing with templates. Takes literally 10 seconds to set up.
Secondly, I’ve had parking companies spend money advertising on my blog, despite my not really discussing parking much nor endorsing it. I know they are doing it to grow their business, but I appreciate their spending money to support my blog. They’ve also supported the various domain forums (moreso a few years ago) and they’ve spent quite a bit of money sponsoring conferences and events where I’ve done business.
Finally, I’ve sold domain names to people who work for or operate parking companies in private sales and via auctions. They’ve also bought names from clients of mine who in turn reinvest some of that money with me by purchasing my domain names.
Yes, I realize that parking companies are giving many domain owners a raw deal, but I also know that many domain investors wouldn’t be where they are today without parking companies.
@ Elliot,
No offense, but your comment above comes across like you are supporting/justifying parking company blues just because they been good to you.
That is not an objective opinion especially from a good blogger who people (myself included) look up.
Just because parking companies are helping you does not mean you should defend their wrong doings imo.
Elliot
We have the traffic.
Its our domains.
We paid for them, we pay the renewal costs, we take all the risk on the domains.
They take a share for performing a service.
We should expect them to do a good job, provide the service in a fair and lawful manner and for the amount they agreed to do the service for.
If they take more than they agreed to then its not defensible.
We will see.
Elliot is a paid lobbyist for Oversee
Of course parking companies buy domains for parking because they know how the current owners are being screwed and how the rev will double just by taking them over
“No offense, but your comment above comes across like you are supporting/justifying parking company blues just because they been good to you.”
No offense has been taken because that is true. They have been good to me and I am being honest about it. I am not supporting parking companies though. I am just suggesting that people look at what parking has done for our industry. For people like me, it’s been more good than bad, and the purpose of my blog is to give my personal take on things related to this business.
“That is not an objective opinion especially from a good blogger who people (myself included) look up.”
Thank you for the compliment about being a good blogger. I always look at myself as a domain investor that blogs rather than a blogger who invests in domain names. I share my own take on topics, and while they are usually in line with others, my opinion differs. I am not defending parking companies as much as I am looking at the good they’ve done for many people, myself included. It’s easy to pile it on when someone/something is down, but I don’t feel harmed because of the parking company black box. Sure, maybe in the course of my 7 years, I’ve lost out on a few hundred dollars revenue MAX, but I’ve gained much more than I could have ever lost.
On the other side of things, I don’t think Mike’s opinion can be seen as objective either because he has made significant revenue from parking, and likely would have made more. His opinion is important though because he does have experience of dealing with parking and he would probably benefit from greater transparency.
Since Elliot wont listen to me, I hope he pays attention to the caliber of these people admonishing him here.
Elliot does not realize that the actions of the Parking companies could affect him indirectly. If domain investors get compensated properly, they will have revenue, and profits to invest in Elliot’s domain flipping business. So, in a way, a win win for everybody, including the Parking companies.
Try convincing Elliot of this, first you have to count all the “me”, “myself”, and “I’s” in his comments. Having said that, Elliot is still a friend of mine, I just wont be visiting his blog anymore.
@ “David”
LOL… The last time Oversee advertised on my blog or paid me anything was via a Snapnames banner a couple of years ago, and it was for a very short period of time. Neither Moniker nor DomainSponsor have ever advertised on my blog or paid me anything.
“We should expect them to do a good job, provide the service in a fair and lawful manner and for the amount they agreed to do the service for.”
@ Michael
I am not disagreeing with you at all, but as far as I am aware, they haven’t stated an amount at which they agreed to do the service. If you are getting ripped off, you can park elsewhere or not park at all.
@ Uzoma
I listen to you, but I don’t agree with the things you’ve posted on my blog. Nothing personal, just differing opinions.
“Elliot is a paid lobbyist for Oversee”
@ “David”
That’s a pretty libelous statement.
My gut feeling about parking companies in general is they are not trustworthy. Frank Schillings numbers will be a good gauge as to what has really been going o with parking companies and their lack of transparency, it should be interesting to see what happens.
Elliot
::@ Michael
I am not disagreeing with you at all, but as far as I am aware, they haven’t stated an amount at which they agreed to do the service. If you are getting ripped off, you can park elsewhere or not park at all.””
Every parking company gives a stated revenue share before we move traffic to them.
“Every parking company gives a stated revenue share before we move traffic to them.”
Do most companies do that for everyone who parks with them or to you because of the volume of traffic and revenue you bring?
Assuming that not everyone gets promised a percentage, your argument is different than many others. Your argument is related to contractual violations and those without a stated revenue share are making an argument based on what they perceive as unfair treatment. If I was promised a specific % and wasn’t getting it, I would be pissed, too. I know that I never was promised anything about a revenue share, so I have nothing to complain about. If I think I am getting screwed, I won’t do business with that company.
Of course it’s related to operating in a black box with no transparency, but one argument is contractual and the other isn’t.
The big difference here is that Elliot is a domain flipper/trader, not a domain investor. His point of view comes from being a flipper and not a long term investor. He might develop a couple of domains but he does not invest his money in domain names for long term appreciation.
So his comments should be taken in the context of him having several conflicts of interest with past, current, and future business relationships. Long term domain investors are concerned about their assets, not necessarily with relationships with contacts within the domain industry.
“The big difference here is that Elliot is a domain flipper/trader, not a domain investor. His point of view comes from being a flipper and not a long term investor. He might develop a couple of domains but he does not invest his money in domain names for long term appreciation.”
Wouldn’t buying domain names as investments make me a domain investor by default? Also, I have developed more than a couple domain names, and I have a number of domain investments that are long term. This is my full time profession and not just a hobby.
“So his comments should be taken in the context of him having several conflicts of interest with past, current, and future business relationships”
I think every single person who has enough knowledge to form an opinion on this topic likely has conflicts.
RP
“”Long term domain investors are concerned about their assets, not necessarily with relationships with contacts within the domain industry.””
I’m very concerned with relationships but relationships have to work both ways.
Replace the “P”arking with F—-that what you get from them.
Would love to see those from Sedo, Parked etc to come and show us what they have.
screw bing.
Parked.com is in a tough position imo. Do they stay or jump ship to google.
More of a monopoly for google. Watch the drops happen in 12 months by google imo.
@ Elliot
If you mainly daytrade, swingtrade, HFT, or arbitrage stocks you are considered a “trader” not an investor. Very analogous to flipping domains (trading). And when you are a stock trader you are biased towards currying favor with primary dealers and brokers (domain parking companies, retailers, auction houses, etc. On top being a domain trader you derive a portion of your income from blogging and depend upon advertisers in the domain industry.
You routinely indentify yourself as a domain investor which IMO is a bit misleading.
@ Mike
As a long term domain investor with an overall business strategy outside of making money off of other domainers or domain owners I am not concerned about relationships within the industry. However, I understand your position because you have other ventures within the domain industry outside of just owning assets (ie consulting, etc).
I have absolutely no conflict within the domain industry, I enjoy reading the opinions of people that identify themselves “domainers”, but more and more I see blatant conflict of interests that I believe is misleading to those who aspire to be domain investors.
I am forever amazed that these parking companies get away with what they do. I would classify the majority (not all) as essentially sleazy, and that is being generous. I would not deal with them under any circumstances unless they signed my contract. Screw theirs.
I can see where both guys are coming from. You want honesty when you are doing business. You would hope that these parking companies are being honest about the revenue share, but I doubt that. With that being said, if you do feel like you are being screwed, then you can always move your domains somewhere else or just do something else with them, or even develop your own parking company. It’s enough of you big time domainers out there to get together and form something better. All of you are out there screaming honesty and transparency, then get together and build a honest, transparent company. I see that one guy has step out and tried to make that happen, but I want be so quick to give him a lot of praise yet, he’s just starting. And I won’t bash all parking companies, because I don’t think all are shady. If parking companies were not around, then what would you be doing with your domain names? If you feel like you are being screwed, then what else can you be doing with your domain name? I hope this guy succeeds in what he is trying to do in helping domain owners get more cash for their domains, but if he does not, then will the witch hunt be on him next? If you don’t feel like the companies are doing fair and honest business, then don’t do business with them. Simple as that. What else can you be doing with your domain names?
By the way, it is my belief, and I am promulgating a theory, soon to be demonstrated, that there is something much more sinister in the arrangement of Domain registrars cum Parking boys cum Sedo types, that more or less produces a multiplex of a domain, whereby, if you yank your domain from either one of them, or claw them from even Yahoo cum Google, you are still not guaranteed all the traffic that it gets. To demonstrate an example of multiplex, you should take a gander at HBO digital channels, say on DIRECTV, you’ll notice that many channels can be compressed out of one, and yield high definition multiplex channels on a single transponder. I suspect similar things happening with our domains. These people if they want to be unscrupulous, can co-opt traffic from any domain while you are sitting there holding the bag. There’s a reason they don’t want to be transparent. As long as they are not going to show their hand, we can accuse them of holding a python back there. If they want to prove us wrong, they should show what they are hiding, if it’s not a python.
You are all way off base. The pay per transaction model is coming. You are all lazy by just parking your domain names. The bad traffic and lazy domainers will be gone in 18 months. Our group happy because this will elimnate all that fake traffic and junk traffic that real people pay for.
Why would you pay for a click when you could pay for a lead or a completed transaction. Sure it’s more but you know what you are paying. Your models are so old. It’s like talking with people that still us pagers that still park domain names. Yea watch your earning all go down about 50% in the next 6 months..
Goodbye parking companies. You forget who indexes these things don’t you.
Real traffic equals pay per transaction or lead.. Done and Done.
epminut
Tommy
That is a different issue.
If the “pay per transaction model is coming” that’s fine but my issue is with honest reporting
So instead of PPC I get more money but per transaction.
OK
but I’m not entitled to a fair and ACCURATE accounting?
So if I got to a “pay per transaction model” and I agree to take $10 per transaction, am I still dependent on you telling me how many transactions I had without any right to review or audit this info?
However you want to pay me you can pay me
Just please be honest about it.
Py for transaction (aka Affiliate programs)has been around for a long time. Look how much under reporting there is in all of that.
Plenty of people have written how they sent commission junction 100,000 visits, no sales. Some have even had friends buy through their link and still not credited for the sale.
There is just as much fraud there IMO as there is on the other side. You send a visitor to a website, he buys a product, you have no way of knowing this, you trust the site to credit for the sale.
Pay for transaction, excuse me.
@RH
Judgement day sounds good to me now.
Human Cleansing!!
Hi
@MHB
” then you bet I’m going to be highly critical of parking companies. and I won’t be alone.”
___
Some of us are already there & have been there for quite sometime, regardless of the success and transparency of “FS’s” New platform.
BTW: Not a secret that I hope Franks new venture is highly successful 😉
Regards,
Dan
My InternetTraffic earnings reports are showing ….. earnings up about 80% from previous levels.
Enough said.
@ rh:
“…There is just as much fraud there IMO as there is on the other side. You send a visitor to a website, he buys a product, you have no way of knowing this, you trust the site to credit for the sale…”
That’s the flaw in all this, right there. Whether you’re talking about pay-per-click, or pay-per-transaction, it depends entirely upon an honour system….We rely completely on trusting that the partner is being honest….And, we suspect – so often – that they are not.
The issue is not only about % splits – Its about under-reporting, hiding statistics, shaved payments, not recording legitimate clicks & payouts etc……Its about fraud & stealing.
I think we should go much further than accepting a simple % split number.
We should REQUIRE that every parking company publicly discloses exactly what their % arrangements are with their upstream providers – and, disclose precisely what % of that they share with us, their customers.
I would like to see a monthly report – per domain parked – that details every click, on every link – and, the revenue details paid & earned by the parking company, from each organisation represented by each click. And, I would like to see monthly/yearly comparisons.
We should be able, at our discretion – if we wish – to verify the numbers we are given with the upstream providers.
Integrity is integrity. Why would parking companies hide this info?….And, why do we simply accept their payouts without requiring any verification, or justification?….We are the fools for doing so.
@Elliot “…but I also know that many domain investors wouldn’t be where they are today without parking companies.”
At the same way I could say that many parking companies wouldn’t be here today without domainers who thought getting PPC (peanuts-per-click) was ok.
I’ve moved all my domains out of SedoPro because of the lack of transparency (my acc. manager there begged me to go back and even said they were ready to talk about “guarantees”). It’s too late to apologize, you know the song right?
@RH, you are right. I’ve been an affiliate marketer for most of my “online life”, and merchants using affiliate networks (CJ, LinkShare, TradeDoubler, etc.) seems to f@@k your commissions every time. The Aff. Networks say they run audits on merchants servers to track any fraud. Who is going to complain about the hand that gives you the cheese?
I’ve been working in the past with a big UK Aff. Network. They were running a merchant who didn’t track any transaction at all. When I threat to sue them all, they took the merchant down from the network.
@ RP
In your expert opinion, how long must a person hold domain names to be considered a domain investor, and how many domain names must they have for this period of time?
@Elliot- never accepted a trip of comp domainfest from Oversee? You paid for NY full admission?
@ “Leaf”
Because I agreed to spend 3 hours as an “expert” panelist answering question and giving tips, Oversee gave the ticket to me at no cost. I assume this is the same for all other participants and likely their top customers, and it’s the same policy for many other conferences aside from TRAFFIC.
BTW, if you are going to try and use a pseudonym like Leif Ericson, you should probably try and make sure your hands don’t create silly typos like “Leaf Ericsonon”
http://en.wikipedia.org/wiki/Leif_Ericson
Elliot/Leaf
In full disclosure when I have spoke at Domainfest in LA (2x) I was given a free pass.
When I did not speak I paid to get in.
I do not nor have ever gotten a free pass or any discount for speaking at TRAFFIC.
TheDomains.com has had Moniker/SnapNames/Oversee as an advertiser since the beginning but I write what I think needs to be written regardless of who is advertising.
If we have to go without advertisers then so be it.
@ Mike
Getting back to the point.
When you were negotiating your revenue share, did you know there would be no transparency in the way your numbers were reported, and if so, why didn’t you stipulate that you needed to have a way to account for their contractual obligations?
It seems strange to agree to a deal where you would have no way to know if they were actually honoring the deal.
Elliot
You mean like right to audit the parking companies books to make sure we are getting the amount they agreed to pay us?
I don’t know if anyone has such a deal with a parking company, nor do I know if a parking company has an right to audit the payments from the upstream partner
We do know that Google payout are heavily effected by smart pricing.
Google has refused to disclose any information on smart pricing even what a domain portfolio’s Score is.
Hopefully the lawsuit by advertisers that the judge ordered some of this smart pricing info to be disclosed will move forward and along the way some of this top secret Google info will be force out.
Since we do not have these audit rights we therefore have to make reasonable assumptions and conclusions based on the data we have, which is why this Internet Traffic experiment is quite interesting.
“I’m amazed how opaque the parking business is. It’s great to see someone enter who claims to do things differently.”
Me too, we are like blind beggars with a tin cup waiting to get whatever pittance they decide they want to give us. That does’nt seem like much of a partnership to me.
Its nice to see someone take the bull by the horns and do something about it. (although I doubt it will affect the majority as they won’t be able to join)
“Frank is coming on the DomainSherpa show this Friday so we can learn all the details of his latest venture.”
Cool, that should be an interesting one !
The whole problem which no one seems to be discussing here is traffic quality
Why should prime genetics and brandables get the same rev share as typos of cartoon network domains? Many parked names are pure crap and water down the value of good domains and highly targetted traffic