Blogs about the domain industry and the various players and companies within it.

A .XYZ Disaster Story

A .XYZ Disaster Story

A client recently purchased a .XYZ domain for an application that they were developing. Everything was working fine until today when suddenly the domain stopped resolving. It just so happens that in their infinite wisdom the .XYZ registry had decided to suspend the domain. So what actually happened?

When you sign-up for a .XYZ domain name you are coming under the terms and conditions of the registry. A part of the terms is they have the right to suspend a domain if they deem the domain is being used for inappropriate reasons. The stated goal is to keep the .XYZ namespace safe…..sounds interesting.

Here’s the problem. For the domain in question SpamHaus, Google Safebrowsing, SURBL, URIBL (all recommended by the registry) flagged the domain as safe. Virus Total has 68 sub-organisations that they relate to and one of these organisations flagged the domain for possible phishing reasons.

Why was this the case? It just so happens that at some time the domain had been sent to advertising networks and I’m guessing that one of these networks may have had a problem with a “spam advertiser”. This sometimes happens and the networks immediately kick these types of advertisers out. In the case of the .XYZ domain this resulted in it being banned.

What was really annoying is that neither the registry nor the registrar communicated anything like, “I think you may have problems with your domain. If you don’t do something, then we’ll have to suspend it.”

One day the domain was working and the next day it wasn’t. To track back to a registry suspending the domain wasn’t trivial when the client was in the middle of a development cycle.

And the client’s registrar wasn’t immediately helpful.  First came the “it isn’t resolving, check with your hosting provider”, then lots of apologies while the client pushed back that the problem was in the DNS somewhere, and finally the registrar pointed to the status of “Server Hold” in the Whois information and pointed our client to the unsuspend site for .xyz.

And on further quizzing the client’s registrar indicated that this was a common occurrence with .XYZ domain names…..which didn’t sound very good, and would have been useful if that was the first thing they checked.

Just for the record, getting a domain unflagged by some of these “monitoring companies” is next too impossible. In fact, at one stage I had whizzbangsblog.com flagged by a company (no idea why) and after months of filling out forms I gave up. In the end I took the attitude that if Google flagged my blog as safe then that was good enough for me!

So what’s the problem with all of this? If any .XYZ domain is flagged by any monitoring company in the world (false positive or otherwise) the domain can be banned. In fact, given our client’s experience, if the domain is not banned then the .XYZ registry is acting in a preferential manner and my guess this is breaking either their contract with ICANN or the registrars.

If you’re looking at your .XYZ domain portfolio and parking them then I’d think again. There is actually an obligation on the part of the XYZ registry to ban the domain and there goes any potential revenue (small though it may be) to help pay for the re-registration costs.

So let’s imagine you’re a business (like our client) working away at developing a brand on a .XYZ domain. A dinky little backwater monitoring company has a glitch in their software that flags your domain as suspicious. Immediately your website is taken down (by the registry) and as a business owner who knows nothing about phishing etc. you’ve got to find out what the heck happened while you’re losing sales! This is crazy!

In the end, our client gave up with the .XYZ domain and went with a .COM….probably what they should have done in the first place. There’s many good reasons why .COM is so big and one of them is they don’t behave in this ridiculous manner.

Recent Comments
Wolftalker
Never did like .xyz.
17 August 2016
mgilmour
Good article!
19 August 2016
mgilmour
Given the uncertainty that this presents to business I would also advise that they did not try and build a brand on a .XYZ domain.... Read More
19 August 2016
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15 Comments

The Percentage of Advertising Revenues Google Pays Domainers

The Percentage of Advertising Revenues Google Pays Domainers

I don’t know why it’s taken me a little while to update some of my analysis but there has been a big reporting change by Google which got me a little excited. In the past Google only reported an overall aggregate Traffic Acquisition Cost (TAC) but now this has all changed.

Since Q1 2015 Google has broken out the numbers for the network members from the distribution partners. You may ask, what is the difference and where does the domain industry sit?

Distribution partners are people like Apple, who charge Google for real-estate on iPhones etc. Google has hidden the amount that companies like Apple take by publishing the amount of revenue as a percentage of the overall Google website revenues (an odd metric actually). This means it’s impossible to reverse engineer the financial relationship…..which actually makes commercial sense.

On the other hand, for the first time ever Google has released the TAC to network members and this is the segment that the domain industry sits within. According to the reports, Google is paying out between 68-70% of the advertising revenue to this channel.

This begs a really simple question, if Google is paying out this amount then why have many domain investors experienced drops in their revenue?

To answer this question, we need to appreciate that the domain channel is one small part of the overall Google Network. This means that although on average Google is paying out between 68-70% of the advertising revenue the domain channel may be getting more or less of this figure.

So it’s time to do a dive into the data. The first stop was to pull out the average Google normalised RPM (nRPM) figures for a VERY large domain portfolio for each Google reporting quarter. I then graphed the quarterly percentage change over time (see the blue line on the graph below) and I then compared this to the payout figures that Google released for the network (the yellow line).

Google TAC and nRPM

What we can clearly see is that the two lines nearly mirror each other. When Google pays out more, then the normalised RPM increases and when it pays out less then it immediately drops. But the huge swings in nRPM don’t really make sense when you compare it to the small swings in the Google average payout…..unless there is something else going on.

The only reason this would occur is if there is an artificial gain control for the overall domain industry that is being triggered by Google. In fact, one of these exists and it’s called smart pricing. In other words, a small change in the overall Google payout results in a massive change in what the domain industry receives. I think this has less to do about quality and more to do about Google making its numbers.

So here’s the really fun part. Since we now have a percentage change in the nRPM and also the % paid out by Google for a quarter we can multiply these two figures together and get a pretty good read on what the industry is actually paid out as a percentage of the gross advertising revenue!

Now here's the catch. We also have to assume that the Domain Industry was initially paid in Q1 2015 about what the average for the whole Google Network. There could be some scaler at work here but I tend to doubt it.

The below graph shows that in the recent 2016 quarter the domain industry received 91.4% of what Google received from advertisers. In fact, we’ve been on an upward trend since Q2 2015.

Overall Google Payouts

I know that many of you will cite specific examples where you’ve seen advertisers paying $50 for a click and yet you only get pennies. These specific perturbations in the data will continue to occur because what I’m looking at is averages and trends.

So right now we should be living in the golden age of Google payouts so get ready for a sharp trend down.....unless there is some corporate reason why Google would keep the payout rates high.

Now here’s where it gets REALLY interesting. Armed with this data the domain industry knows a big chunk of the Google quarterly report BEFORE anyone else does. In fact, with a little more effort I wouldn’t be surprised if we could pull just about the whole report apart!

This really got me thinking about whether we as an industry actually sit on a gold mine of data that would allow us to predict the movements in the Google share price……now that would be interesting!

I should say that if you plan on using this data for investment purposes you should first of all get some professional advice.

Recent Comments
vanclute
... am VERY curious to hear what you can predict regarding the google share price. That could be some real fun right there... K... Read More
12 August 2016
mgilmour
Yes.....it will be facinating! Wish me luck :-)
12 August 2016
1977 Hits
3 Comments

Tony Lentino Passes Away

Tony Lentino Passes Away

My friend and the friend of many, Tony Lentino, passed away yesterday. I know that I speak on behalf of the entire domain industry to pass our sincerest condolences on to his wife Emily and their children during this difficult time.

I first met Tony while training for my pilot’s license at Moorabbin airport. He was an amazing man who loved life and accepted everyone just where they were. The one thing that really struck me about Tony was his exceptional generosity and this permeated every aspect of his life.

I remember flying together from Melbourne to the Gold Coast to attend TRAFFIC downunder. My wife Roselyn and I were in a little Piper Archer while Tony and five other domainers were flying his larger Saratoga. He loved his plane (AQM) and it was an absolute joy for him to take people for a fly.

Tony's pride and joy

He didn't ask for anything from those that traveled to the Gold Coast and back. He happily invited them to jump onboard and have an experience of a life-time.

In those years, Tony came across as a bit of a larrikin but he was also one of the smartest and most astute business people I’ve ever met. He was always expanding his knowledge, whether it was a passion like aviation or something technical from within the domain industry. He was one of those rare individuals that had an insatiable appetite to be curious.

After moving back to New Zealand we didn’t communicate as often but I’ll never forget the day that he dropped around with his wonderful wife, Emily. It was clear that he was completely smitten by her and had met the love of his life. Naturally, she was a tremendous positive influence on his life and really brought out Tony’s gentler side. It wasn’t long before they started a family and had two gorgeous girls.

During the last few years, Tony’s zest for life continued with the establishment of the Super Black car Racing team. His goal was to both “give it to” the Aussies across the ditch (in a good natured way) and provide opportunities for Kiwis behind the wheel of a super-car.

Today, when I reflected of my many times with Tony I know that it’s been a real privilege to have known him. He was an amazing man in so many respects and it gives me great comfort to know that we will meet again.

 

Flying to the Gold Coast

From Jothan Frakes on Tony's Life

I am absolutely slammed right now - busy working hard to create a very special DOMAINfest again with a very amazing team of people, and some sad news came across my desk today.  The world lost a star today to their long fight with Cancer.

I had to stop for a minute and write this up as a tribute.  I asked Michael to be kind enough to allow me a few words in on his post about Tony Lentino because of a shared experience the three of us had after the T.R.A.F.F.I.C. Down Under conference in Gold Coast back in 2008.  More on that a few paragraphs from now.

Cancer sucks – full stop.  Before I continue, I hope that people who share their passionate hate of cancer will take a moment and support Elliot Silver will join in on his fundraising race in support of the Dana-Faber foundation here:  http://profile.pmc.org/ES0223

Back to Tony.  I cannot really think of DOMAINfest without thinking of Tony Lentino and smiling, because there is a wonderful backstory around it that I’ll share.

DOMAINfest has had the likes of Kim Kardashian, Biz Stone, Steve Wozniak, the Stone Temple Pilots, and I’ve met Rick Springfield and John Travolta in and around the event.  But the person who has stood out to me more than anyone as I think fondly back on the stars that I have met along the way - one person that stood out to me across all of my years of DOMAINfest – it was one of the attendees at the first DOMAINfest Global, Tony Lentino.

The team at Oversee.net and I had put together a number of small regional DOMAINfest events in 2006, and we launched the DOMAINfest Global (DFG) in Hollywood in January of 2007.   Because it was the year 007 we held a faux casino night at DFG with a ‘Casino Royale’ theme, and there were models hired who were ‘bond girls’, and among them was Emily, Tony’s wife.  They met there at DFG.

I also met Tony there at DFG – he stood out to me because he had such a vibrant and enthusiastic presence as such a good natured person – and the fact that he came all the way from New Zealand for the event had really impressed me.  (Also, how much he expressed respectful and gentlemanly interest in Emily stood out.)

I had the chance to see Tony again in 2008 for DOMAINfest Global in Hollywood, and later in 2008 for the T.R.A.F.F.I.C. Down Under in Gold Coast Australia, where I had been sent to continue my live auction development work with DOMAINfest, and speak about new Top Level Domains.

 

Among the amazing people in the domain name industry, Tony was there, as was Michael Gilmour, and Tony invited me back to Melbourne to visit his offices.  To get to Melbourne, Tony and a friend flew with Kevin and Julie Daste and I in his 6 seater plane, and we flew tandem with Michael and his wife in their plane across parts of Australia I would not have likely had the chance to visit.  We flew through the weekend and stopped in Port McQuarrie, Mudgee, and Parks, Australia and enjoyed local food and hospitality, getting the chance to visit and all get to know one another.  Tony was an exceptional host and very experienced pilot and the trip is on the top of my lifetime lists of experiences. 

 

I did not see Tony again until a few years later when he and Emily came to Seattle and they let me know that they were getting married, and then at the 2012 Webfest Global where he and Emily introduced their first daughter to me and we had dinner with some long time friends in Santa Monica.

You can read more about Tony in the article on SpeedCafe, and Tony is remembered as the founder of Instra and the owner of the Super Black racing team in New Zealand – but to me, I will always remember him as a robust and spirited part of why I love doing conferences and why I am grateful we have such a fantastic industry of people.   The way he met Emily and how their love grew and thrived, and his wonderful daughters are all things I will smile and remember him for.

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What Brexit Means For Domain Investors

What Brexit Means For Domain Investors

Well, the news is out! Britain has just exited the European Union and the global financial shockwaves are only rumbling through the markets. It’s only been hours since the announcement but what does this mean for Domain Investors?

For a start, the forex interest in the event has been so enormous that popular website XE.COM crashed. I spent the last ten minutes trying to get any sort of activity and finally gave up. My guess is that it’s experiencing the impact of a very real DDOS (Distributed Denial Of Service) attack from genuine requests rather than a large botnet.

Escrow.com

After flipping across to Yahoo Finance I was able to see that as of this article the Pound has dropped over 12.65% against the USD. Likewise, the Euro has fallen by 3.6% and this will mean a possible boom ride for European domain investors.

The majority of the online advertising market is still in the United States and so any advertising dollars earned will need to be converted to Euros or Pounds. If a UK based domainer earns $US1 they will effectively get an additional 12.65% free of charge.

What it will also mean is that European investors will baulk at the idea of buying US based domain assets as they will be paying more for them.

I must admit that I’m pretty happy with the Australian dollar crashing by nearly 4% against the USD and nearly 3% against the Euro. The majority of our expenses at ParkLogic are in AUD and so this means we have more to pay the bills.

What we don’t know as yet is whether these rapid movements in the forex markets are a precursor to something else. Is this just the rumblings before the major quake? Remember, the majority of the European countries are so debt leaden that a decline in both the Euro and Pound is going to place a lot of pressure on their finances as debt payments come to term.

The currency interactions to really watch is the USD/CNY (US to China) exchange rate. It’s already increased by nearly 0.5% and with China’s massive debt this may be the straw the breaks the camel’s back. China is really caught in a difficult situation where they need a high currency to pay off their debt and a low currency to keep the economy flourishing with exports.

The CNY is also appreciating against the pound by 9.07% and this will mean the Chinese economy will be that much less competitive exporting to the UK and Europe. This will have a flow-on effect to the Australian commodity based economy that many economists are suggesting will cause the AUD to fall to around $US0.64.

All in all, I think we are in for a really interesting ride and US domainers are getting set up to be in a really strong position. With a strengthening USD bargains can be snapped up from around the world while living in a parity environment within the US. What is certain is we’re all going to be in for a really interesting time as the global financial markets rebalance on the news of Brexit. The question is whether the rest of the EU will begin to break apart…..time to get the popcorn out!

Sorry.....just edited the post and couldn't resist adding the following chart for the movement of the gold price over the last few hours. You'd think that something was happening in the global financial markets wouldn't you!

Gold price

Recent comment in this post
Wolftalker
Thanks for an interesting take on it Michael
24 June 2016
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How Much Are Your Domains Really Worth? Part 1

How Much Are Your Domains Really Worth? Part 1

Over the last few years there has been a rush of capital into the domain industry from two major sources, Chinese investors and speculators. I have written quite a lot on the Chinese investors but have largely ignored the speculators.

Escrow.com

Speculators have hoped to win the lottery by having a domain that a cashed up major company wants to desperately buy. They hear about the successes of “old-time” domainers and dream about find the pot-of-gold at the end of one of their domain rainbows. I don’t mean to rain on your parade but this is unlikely to happen and here’s why.

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