Not sure I agree with the legitimacy of this practice, and hopefully we’ll see more browsers & DNS servers fixing our typos. There’s no reason why firefox can’t be smart enough to realize that if I typed newyorktimes.cm, and this domain isn’t registered, that I meant to go to the newyorktimes.com!

Read the article here

Ok, so what’s the deal here? There’s clearly no website here, all I see are ads that are related to the New York Times. Well, what you’ve accidentally stumbled upon is a page managed by the new and highly lucrative Domainer industry. Domainers are companies that acquire massive numbers of domains, create pages filled with ads, and then rake in the cash. According to this CNN article the domain ‘Candy.com’ rakes in almost $300 per day in advertising revenue. In a year that means by simply placing ads on this page, someone can make almost $110,000! Crazy right?

Now here’s the best part. When I went to newyorktime.net, the second ad on the page was for the real New York Times. Check out the URLs we hit when we click:

So first off, notice that the ad is being run through Google. Ok, so Google likes the Domainer space. Next we hit ‘ad.doubleclick.net’, Doubleclick’s adserver. This implies that the advertiser paying for this click I just performed is using their own adserver. Next, we go to ‘homedelivery.nytimes.com’ and I see an offer page for getting the real New York Times delivered to my house. The really interesting piece here is that chances are that the New York Times is paying for this click as part of their Home Delivery ad campaign. Chances are that the majority of visitors to ‘newyorktime.com’ actually meant to go to the ‘newyorktimes.com’, and the actual New York Times is now paying to redirect users to where they intended to go.

Considering you can buy a domain for $8.95, that’s not a bad deal right? So, is this a scam or a valid business model? Lets look at it from two different perspectives, the advertisers paying for the ads and the people looking to buy domains.

The Advertiser: So you might say, “Why does the New York Times have to pay to send users that mistyped a domain to go to the real site?” You’re right, that kinda sucks, but then again, why didn’t the New York Times buy all potential spellings of their domain? Even so, now consider the case where the New York Times advertises on www.thenews.com, another parked domain. In this case, the user is clearly looking for a news bit didn’t actually mistype the domain. If you owned a news site, wouldn’t you want to bring this user to your property? Exactly! Parked domains provide some of the most targeted and highly relevant users in the world, and advertisers are willing to pay big bucks to show you ads.

The Domain Buyer: Here is where I think more debate comes in. For the average Joe, it is now practically impossible to get any sort of normal .com domain name. All of the good ones have simply been taken. But on the other hand, these Domainers do bring a certain efficiency to the market. It’s hard to argue that the true value of ‘candy.com’ is $8.95 when you can make $300 a day in advertising profit! Creating domain marketplaces creates efficiency. The domain names that people will type in themselves because they are that good will cost in a lot of money whereas ‘mikeonads.com’ was still freely available a month ago =). So, if prices only go up how is this good for the buyer? Well — because key domains become available. If Candy.com were $8.95, some mom & pop shop in Kansas City will buy it for their little kid’s candy stand. The thing is, of the thousands of people who go to Candy.com every day, very few of them will live in Kansas City. On the other hand, a large candy producing corporation wants to help it’s brand with a short domain name and can also better monetize the thousands of visitors that will naturally come to Candy.com every day. So yes, there’s no more ‘free lunch’ when purchasing a domain, but if you get funded for a legitimate business, you no longer have to worry that you’ll have to settle for ‘thebestcandymakerintheworld.com’. Instead, if you think it’s valuable enough purchase a domain like ‘Candy.com’ from it’s owner, or domains like ‘Candycenter.com’ from Domain Marketplace companies like BuyDomains.

The one thing that I would like to see is a centralized marketplace for domains. Currently there are too many methods, just try doing a Google search for ‘Domain Marketplace’.

More posts to come on this topic. There are definitely some questionable topics here — search rankings via fake content, etc. etc. which need to be discussed. But at the core — the true value domainers bring to the internet industry is efficient pricing of domain names. And hey, if you could make a free $100k/yr just because you own Candy.com, wouldn’t you?