CAN YOU TRUST MARKETING MESSAGES? CHALLENGING A CLAIM IN THE DOMAIN MARKET?

Diploma

Abstract

 

Today, millions of purchased domain sites names are sitting unused with no real web designs or concrete purpose coupled with them.  Why would not owners engage a web-hosting domain-parking hotel so they can earn money through eyeballs advertising or click revenue while their sites sits unused?  Parking hotels claim access to passive domain monetization through advertising programs tailored to generate revenue via automatic web page generations

containing tailored advertisement.  When visitors access these web sites, revenue is generated for domain owners.  This study sought to investigate if parking hotels’ advertising claim, that you can make money through them, carries substance.  Hence, is it possible to generate sufficient revenue using a parking hotel’s advertising revenue model to pay for the cost of domain ownership and, if possible, generate excess revenue?  The study’s epistemological approach, trying to distinguish the truth about the hotels’ claims, stems from a ontological discussion around web hosting hotels’ advertising vehicle existence and its ability to generates revenue.  The study challenged a parking hotel’s claim through an inductive quantitative approach by watching advertising revenue for 59 domain names over 105 days.  Quantitative data concluded, through a statistical approach, that there were insufficient advertising income, approximately a nickel, to cover the annual cost of approximately $6 USD.  Therefore, the study concluded that the advertising claims were misleading and recommends that sites are not purchased, or renew, for the purpose of making money through web hotels’ advertising models.  

A staggering 105 million sites have registered on the worldwide web today

according to Verisign (2006, p.2), the global register operator for .com and .net.  Though there seems like there is a site for everything on the web, many of these sites are non-active, meaning they do not provide an active web page if you surf to the web address.  Verisign (2006, p.5), estimates that there are between 7.5% and 14% of non-active sites on the web today.  Extrapolated, nearly 8 to 15 million sites sits idle without a “direct” purpose at any given time on the web.  Although, corporations and individuals buy many sites to protect existing and future products names, misspellings of product or company names, speculation for selling, or otherwise, many sites just sitting there doing nothing other than costing the owners money.  Each site comes with a yearly fee for ownership.  One way out of this cost dilemma could be to place inactive sites with domainhosting hotels.  These “soup to nuts hotels” supposedly provides services that give owners advertising revenue service – many hotels like Sedo, claims to have a 1.5 million domain names in under their management.  

Problem Formulation and Purpose

 

On one of the parking hotel’s web site, we can find advertising that reads “Earn Money while you Sleep” and “You can make money without even lifting a

finger” (Sedo 2006).  So would it not be smart to generate some ancillary revenue for unutilized sites?  One logical question could be, why not?  It is free, right?  Even better, would it not be nice if one could make this into a money making machine by generating more revenue than the site’s annual ownership cost.  A true money machine is created?  Here is the concept, just buy domain names, place them at a domain hotel, lean back and collect the advertising money!  Of course, and without argument, this money machine must create excess profit [from advertising revenue] to cover the ownership cost otherwise it logically would be a losing proposition.  In other words, it must be profitable.

 

So why are domain names so important?  The purpose of using domain names instead of addresses based upon numbers is to assist humans to remember a domains address.  It is obviously easier to remember a name than an 11-digit number, at least for most of us.  When a domain name is entered, the address is translated into a universal resources locator (URL) number.  This translation relieves the users from remembering numbers and keeping up with IP changes, should they occur, as they only need to remember the web name.  It also

introduces the ability to guess what a web name could be.  One example of this is

the daily newspaper in Sweden, Dagens Nyheter.  It’s URL are www.dagensnyheter.se or www.dn.se.  Without common knowledge, both

names are translated into IP address or 62.119.189.4 by the URL translator on the web.  This translation is done at the Internet Corporation for Assigned Names and Numbers (ICANN).  This translation and linkage with the world wide web’s URLs carriers a translation cost.  This fee is for a site is a cost that without income

is a losing owner proposition.  Understandable, some of these domain names can, and most likely does, have legitimate purposes long-term.  The research asks, though, what if a domain could generate more revenue that its cost?  

A little deeper description of the revenue model yields that one must transfer one’s domain to a domain hosting hotel in order for it to be managed.  A simple redirection of its unique web address (URL).  Hotel then takes over and

generates advertising, monitor site statistics such as visitors and their activity, and reconciliation.  After deducting their advertising commission, they return advertising revenue to the site owner.  There is no cost for placing a site with them other than a commitment to pay commission.  As the study will point out, owners’ involvement is to provide key words linking advertising content to the site name.  These key words are then what the hosting hotel use to automatically tailor/link appropriate advertising content to the domain site.  The study will point out there is a belief that there is a propensity to visit a site based upon its name (See domain name Value below).  It is therefore important to try to link domain names to specific key words.  For example, if a site is named www.ITAKE-AWAY-DUST.com thinking that it is a cleaning company, one could link

key-words such as cleaning or dust– to increase traffic to the site.  Alternative to the hosting hotels, although more laborious, is to create one’s own web site layout.  This path requires agreements with advertisers, monitoring of site traffic, and collecting of advertising revenue.  The benefits would be less intermediary commissions since one bypasses the hosting hotel.