Media Post May have just found the story of the year for domainers.
A judge presiding over a potential class-action lawsuit by search marketers against Google, has ordered the company to divulge financial metrics associated with its parked domains program.”
“The data that Google must disclose concerns its assessment of the quality of sites within its AdSense network, including its parked domain and errors pages. ”
“Among other information, Google must reveal the “conversion score value of the property source” — defined in the court order as “a metric Google uses to price clicks from Web sites contained in its network.”
“Also, Google must reveal the “smart pricing discount,” or the discount that Google applies to clicks on some of its AdSense properties.
Here’s the bad news, apparently under the court ruling only the advertisers would get that information, not the parked domain owners.
“U.S. District Court Magistrate Judge Harold Lloyd in San Jose, Calif. ruled that Google should share this information with the marketers that are suing. The theory is that it sheds light into Google’s pricing formula for its parked domain program.”
“The legal battle between the marketers and Google dates back to 2008, when several companies filed lawsuits complaining that Google shouldn’t have placed them in its AdSense for Domains and AdSense for Errors programs.”
“The marketers alleged that such pages are low-quality and yield fewer purchases or other conversions than ads that appear on Google’s search results pages.”
“The marketers also said they believed that clicks on ads on parked domains “were unlikely to lead to desirable business outcomes, and that placement on such pages could damage their brands.”
“Google counters that parked-domain ads “perform as well as or better than ads on Search and Display Network sites.”
As every domainer knows despite Google revenue and profits increase quarter after quarter, year after year, our revenue has continued to decline drastically.
Not on has Google Revenue and profit risen but also the cost of the average click to advertisers and the amount of clicks.
Therefore there are only a few possible logically conclusions.
1. Google is being untruthful when they say “parked-domain ads “perform as well as or better than ads on Search and Display Network sites”. In fact ads on parked pages would have be be doing quite the opposite to reconcile Google’s financial reports which are running diagrammatically opposed to domainers income from parked pages.
2. Google is using its lack of transparency, to simply reduce payments to the domain holders and increase it’s bottom line.
Once Google introduced smart pricing, the revenue paid to all domainers has fallen.
Again this is counter intuitive since by definition such a product should reduce the payment for low quality traffic, but then would have to reward the higher quality traffic, thereby producing somewhat of a wash industry wide.
But every domainer’s income has fallen dramtcially over the years to just fractions of what we used to receive just a couple of years ago.
Hopefully though this case or as a result of this case, Google will have to start disclosing this information.
We will get to see how Quality Scores impact per click prices to the advertisers and whether in fact parked domains perform better than search and display ads.
Depending on what the information Google releases looks like, Google maybe seeing another class action suit, this time from domainers.
First we will also have to see if Google appeals this ruling.
Reminds me of the scene in the Wizard of Oz. The curtain is about to be pulled back and it may pay off BIG for domainers! Oil vs mud….EXPOSED!
We know one thing for sure. It profits
Google to keep this info secret otherwise they would have divulged it long ago. Hopefully the release of such information will profit us a little more.
Depending on what the information Google releases looks like, Google maybe seeing another class action suit, this time from domainers.
@Michael
Domainers file a class action suit? Are you kidding? Domainers didn’t back WADND’s suit against Verisign to get rid of the annual 7% increase to .com registrations. Domainers haven’t backed CFIT’s suit against Verisign for the same reason (except Frank Schilling). Domainers haven’t backed ICA to give them a lobbying voice in Washington D.C. and at ICANN. What dream world are you living in??
Howard
This type of case involving these type of dollars would most likely be done on a contingency.
While domainers are reluctant by in large to spend a dime to protect there legal rights, if they can join such a suit for free I would expect a lot of participation.
Hi,
@ Rick Schwartz ~ Very well said…
Still a few more “curtain’s” to be pull back also…not only ‘Google Curtain’s’…but other companies as well.
About Time…. IMHO As always 😉
Regards,
Dan
BTW: Great post Michael…
They’ll probably release obfuscated data that’s organized in cohorts, if any.. Doubtful you’ll get any real data.
“This type of case involving these type of dollars would most likely be done on a contingency.”
Howard and I are still looking for the mortgage company that takes payments on contingency.
“Domainers file a class action suit? Are you kidding?”
========
1. Many people do not understand a “class action suit” – They think “the class” is some SMALL-ish group, rounded up to be the Defendant, to attack.
2. When people are informed “the class” is LARGE-ish and they can be part of it, they become more disoriented. Some people are just not “joiners” & don’t want to be part of a gang.
3. Experienced people also conclude that class action suits result in a Small-ish group of attorneys reaping all of the rewards, while they get a $5 gift.card from the defendant that was sued.
4. Another problem with class action suits (as seen in the ICANN – RegisterFLY case) is that THE.Court (being uninformed i.e. clueless) can make arbitrary decisions….such as…”class action is not appropriate” EACH Domainer should file their own suit against ICANN & RegisterFLY et. al.
In other words, one goes to all of the “class action” time and expense, they get organized, and THE.Court says: Please come back One.by.One not as a Gang
Not many people will jump thru hoops to enrich attorneys more in hopes they get a $5 gift.card in 10 years.
John
Personal injury attorney’s don’t have mortgages?
Many domainers are (or were) advertisers, too.
As an advertiser, you saw the click prices climb to extremes over time, especially for certain niches.
As a domainer, you saw just the opposite.
Prices They Paid You for clicks on those very same types of niches continued to spiral down.
Something’s gotta be wrong with that picture.
This Article Quite Interesting For Me Thanks for share Nice content : )
@”MHB”
“Personal injury attorney’s don’t have mortgages?”
TOOOO Funny!
Peace!
Dan
Big can of worms here. . . . trademark owners will love to see some specific details too I reckon.
“Personal injury attorney’s don’t have mortgages?”
Apples and oranges. PI is a relatively simple gig, since insurance companies generally pay standard settlement amounts which the PI attorneys all know. If you hit me with your car and I have a soft tissue injury, even if your insurance company doesn’t pay out the 20K nuisance value, we are going to have a one or two day trial with limited discovery and no novel issues. Even a small firm can close enough PI cases in a month to clear overhead and pay the lawyers. Once in a while they’ll get something interesting enough to take a flyer on a bigger payout, but only if there is enough underlying volume of cases where they get the standard settlement amount and inform their unsophisticated client, “Looky at this big payout I got for you.”
A complex piece of commercial litigation that is going to stretch over months and years is not comparable to slip-and-falls and dogbites. Plus, unlike tort defendants and their insurers, who are pretty much just interested in disposing of cases while maintaining a bottom line, something like this goes to the core of the defendant’s business practices, they are well funded, highly motivated, and will definitely run every ruling up and down the appeal court flagpole.
But if you have the number of the contingent fee attorney who wants to take over the CFIT case, please let us know.
Good one MHB, good lawyers take cases on contingency basis.
Howard, if a post in his blog was correct, used to represent a crippled kid a lawsuit too. How did that work out for you Howard?
But if you have the number of the contingent fee attorney who wants to take over the CFIT case, please let us know.
===
BTW, was the “CFIT case” a Real.Case or a Discovery Club ?
…
or some Judge JUDY thing ?
Even if we find domain investors have gotten the shaft, does that mean anything? Do we have some obvious rights once the veil is lifted?
Can’t they pay us whatever they want legally, great conversions or not?
I don’t see how it will benefit the parking industry. Google will say, “Okay, here it is. Satisfied? You staying or leaving?”
It’ll be very interesting info to say the least, but I just don’t see how it gives us any rights or bargaining power.
Even if we find domain investors have gotten the shaft
“I just don’t see how it gives us any rights or bargaining power.”
======
It gets much worse.
It is not clear why ‘famous’ Domainers do not want you to know what is really going on.
Are they in denial ?
@BigLie….. could you eleborate, clearly? 🙂
.
If someone told people the Roulette Tables in Vegas are “rigged” (magnets, balls, etc.)
it seems reasonable people would say NO.WAY!!!
If Casino owners worked to silence any notions of that, one could understand why.
Avid players might want to discredit such claims because they may feel foolish for being suckered ?
Obviously, there would be one way to check. Experts could tear the table apart, check the balls, etc. That of course would not verify 100% of the tables.
One could also keep massive amounts of stats and question tables that are not purely random. A regulator could disclose those stats.
It is not clear why ‘famous’ Domainers do not want you to know what is really going on.
://sites.google.com/site/ytpartnercommunications/Announcements/youtubelive
Domainers seem to be in denial that the Big.Boys will walk away & create MANY Internets
do advertisers sue tv networks because super bowl ads are “too expensive” or the method of setting rates or the network’s profit margin is “not transparent”?
nielson ratings are weak data, but advertisers still pay high rates based on such spurious evidence. it’s been that way for decades. how many competitors does nielson have?
as long as so many people type “google”, goog will prevail.
what else are they going to type, and why? consumers, not advertisers, have the final say in who wins at this game. they continue to choose google.
a payout won’t fix the problem for anyone except goog (until the next lawsuit comes along). advertisers, marketers, domainers, whomever… need alternatives. alas, they don’t (yet) exist.
://www.poundsand.com
FAST.COMPANY.NEWS
“Larry Page had barely stepped into the corner office at the Googleplex Monday morning before the re-shuffling began. Jonathan Rosenberg, the much lauded SVP of product management, whom Silicon Alley Insider had just pegged as one of the Ten Most Powerful Executives, announced that evening that he was leaving. And now there are rumors that Page, who last held the CEO mantle ten years ago, is fomenting a massive reorg….
…
what is good–if Page is indeed implementing a swift and decisive reorg–is that he’s doing just that: making the changes swiftly and decisively. What kills an organization in transition is lack of clarity.”
i don’t always agree with everything he says but there’s a piece at p a u l g r a h a m.com on his time at yahoo in the late 90’s which pretty much sums up the situation at a search engine company.
ever-increasing revenue flowing in from clueless advertising depts, leading to irrational valuation, leading to cognitive dissonance. back then the methods were banner ads and animated gifs. and there was the “portal” gimmick.
but, really, on these points, not much has changed. there’s still the same valuation issues. and advertisers continue to pour money into the web. the search engine still can’t answer with certainty: what’s a web ad worth?
but does that matter to the search engine? should it?
p.g. used the word “ponzi” several times when commenting on yahoo.
but he praised google for their culture.
Me thinks there could be some parking sites that could use an audit,aaaaaarrrhhhgg
Very significant news potentially good for domainers.
For 10 years I have heard that type-in / Direct navigation traffic is the best converting by far….
It’s an specific need for information a moment in time (qualifiable and quantifiable) vs an accidental visitor like the ones coming from SE’s in a large part …
There is even research about this.
Have they lied to us all this time? he he
This could make or break…seriously.
Could reeedem premium traffic , long term good news.
Is this information eventually becoming public?
Robert Fernandez /Domo Sapiens
Can of worms. One. If you were monetizing through the likes of DomainSponsor etc….. what are you gonna do? As a domain holder, I was doing quite well with DS, and then G started effing around, and gave opt out rights, smart pricing, traffic quality, banning generic names etc… ANd God only know what DS was also doing to hurt our bottom line as they had to pay for overprices acquisitions, fraud paybacks, and declining share as well from Gs adjustments. Who is going to unravel this adequately, and then get us a return that means anything???? Are you kidding me. Domain holders are the red headed step child of the net. Our problem is we have never banded together for a myriad of reasons to do anything meaningful exclusively by and for us. When you think its gonna happen, you find out the new “partner” is just ready to take his turn pilfering your traffic revenue. If you dont have resources you are shit out of luck. ANd one more point. WHile running an adwords campaign for a friend, the first thing I did was opt out of parked landers. Clicks from ohio did no good for a local service provider. Just be glad Google cant come back and “claw back” our 06-07 revenue and give it back to those advertisers who probably did pay for a lot of garbage clicks. SO yes, I feel we have been cheated, and yes, we probably also were benefactors of too generous times at one point. A middle ground would be nice, but it doesnt look promising. Getting about 20% reve compared to 3 years ago. Pretty sad.
as the dodgey arbitrageurs know, some words are more valuable than others. by very large margins.
yet advertisers still focus on the context in which ads appear, and various other tactics used in older forms of media. great, but what about the search words? could it be that simple?
perhaps the lion’s share of google’s revenue comes from a minority percentage of search words. could it be? have you heard of sandboxing? schmidt has more or less told the media this sort of 80/20 dynamic is what they observe, several times. but “long tail” is a warm, fuzzy meme. such idealism draws in more advertisers.
then we have to try to please everyone, when really only a small percentage of words really matter on a large scale to a large search company. what can we do with all those long tail advertisers? adsense! that will keep them happy! apparently not.
it could very well be a ponzi scheme if looked inside. if we dug deep we might find the only real “returns” (high conversions) were coming from a very small percentage of search words. and the rest might be coming from the interest and new subscriptions that generates: more advertisers willing to try the programs. (only to be later disappointed.)
we might see parallels to the domain market and the neverending queue of “greater fools”.