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Re: Riches in Mobile Ads, Just No Profits – The Wall Street Journal
Action Ads
Instead of branding, the most valuable ad experience in the mobile space will most likely be a combination of demographic and geo data aimed at inducing a desired action at the moment the ad is shown.
This is all possible by integrating the social sign up (log in via facebook), identifying the location of the person via triangulation, gps or other methods, and remembering their behavioral history. This mixture would allow for highly targeted ads that request an action, such as increasing a sale amount at the checkout lane.
Take for example someone waiting in line to pay at Walmart. The phone can identify the user through the background running walmart app, which knows who the user is, what has he purchased before, what matches his interests, current specials, current store inventory, etc. The union of these variables can be used to determine convinient action ads, which can automatically generate a personal coupon or suggest to the user an item to buy.
Another example would be from a third party app. In this case, the same user at walmart is not running the walmart app in the background. Instead, a user is reading the news via an app like wavii, which both uses facebook login and maintains personal information of the user. That user within the wavii app can also be shown an action ad from walmart, suggesting the purchase of an ideal product match or coupon.
It needs no explanation that an action ad’s impact can be measured almost instantly. This allows marketers a more direct understanding of their ad performance and cost analysis. From an app owner perspective, action ads can serve as higher revenue sources than CPMs or CPC arrangements, given that an action ad can be tied to a commission on the sale.
An Internet of Things
The whole action ad strategy gets even better with the introduction of RFIDs into products. With this “Internet of things”, mobile business becomes the center stage of a large chunk of commerce. In this scenario, a person’s smartphone can identify the products in a household in realtime and keep a history of typically available products. An app can determine when there is a shortage of a product or whether there are special sales on the internet or nearby stores of commonly purchased products. Again, action ads can trigger the purchase of these items, like generating an online order with delivery.
Action Ads can also be beneficial for the travel industry. When arriving to an airport, action ads can display nearby hotel rates for booking, available taxi and drivers (ubercab), individual housing (airbnb), or available dining seats at the hottest restaurants (opentable) targeted to a user’s preference.
BTW: this response was written using a smartphone and the WordPress app after having used the WSJ app to read this article – Riches in Mobile Ads, Just No Profits
Twitter as a Personal Productivity Tool
When people think of Twitter, many associate it as a place to post just about every meaningless thing you are doing, as well as reading the latest gossip straight from your favorite celebrities, but Twitter can be something completely different – a productivity tool. In this small article, I will try to explain how you can use Twitter to gain insight into the world’s trends and the minds of great leaders as well as to use it as a source for managing your most important data consumption.
Twitter as a Knowledge Exchange Tool
Your Twitter account can be your window to the rest of the world on what you find interesting and valuable to share. Your “tweet” becomes a vote towards a stream of information flowing through all of the web users, where your tweet becomes an influence in that stream. In other words, the more tweets there are about a specific subject, the more likely that it will reach a broader audience. Twitter can also be very narrow and specific. You can use it to follow professionals concerned with particular interests. These professionals will likely share valuable information on those topics as soon as they discover them.
When was the last time you spoke to a Nobel laureate, world leader, or a successful business man? With Twitter, you can “follow” these people and gain the knowledge of the valuable pieces of information they share. Sometimes, it will be small thoughts, and other times they will direct you to a wealth of knowledge sources. You can comment back to them on what they have shared by using the format “@username” and this will reach their account.
So how can you incorporate yourself into this knowledge stream aside from commenting? First, integrate your current information consumption applications with your Twitter account. Many applications and web services allow you to integrate your Twitter account so that you can share content with a single mouse click. When you are reading an article or when you stumble into something of value then you can just click on the Twitter share button and the content will be shared. This form of sharing is an automated way that consumes about 1% of one second of your time each time you share content. Other people will be able to see what you have shared and comment back to you. And this is only a very simple way of sharing knowledge, Twitter is highly flexible in allowing how you decide to share information.
Twitter as your Information Consumption Tool
Once you are comfortable with Twitter, you could switch to the service as an information consumption tool. If you are familiar with RSS and RSS Readers, you will understand this part (if not, look for an article to learn about RSS first). Many of us use RSS Readers for information consumption. However, Twitter offers a more “submersive” way. First, you can identify the places which you have RSS subscriptions for. Many of them will also have Twitter accounts. For those that don’t, there is a very usefull service called TwitterFeed. That free service creates an instruction that sends the RSS feed postings as tweets to your account. You can have more than one Twitter account if you want to segregate the topics.
Once you have integrated all of the information streams so that they all run through Twitter, you have created a highly efficient consumption tool. With Twitter, you can even specify accounts that are of so much importance to you, that you get an SMS in your cellphone with the “tweet”. This is very valuable for people that need to be notified of information changes instantly, like for example when a site goes down or has been penetrated by a spammer, or when a stock goes down or up to a particular price level. Any information change can be programmed so that you are sent an SMS immediately.
These examples serve as a general introduction to the practicalities of Twitter and are aimed at people who care about time and efficiency. As you can see, Twitter can serve as a gateway of valuable and timely information that you can consume and share. You have access to influential leaders and what they are working on. You can reach the content, or the content can reach you through instant notifications to your mobile. You can reach millions of people and millions of people can reach you.
Where in the world is dot com?
I have just returned from a trip across several countries in Latin America and Europe and noticed a consistent trend – ccTLDs are dominating the visual space of major cities outside of the US. Yes, in the US dot com is king, but not for Argentina, Chile, Greece, nor Spain.
Argentina and Chile
In Argentina, .com.ar dominates almost completely in all forms of commercials and billboards that I saw. The local extension is very popular, even though it has had the limitation of not allowing second level registration (i.e. .ar).
The same popularity for the Chile domain extension can be seen throughout their capital, Santiago. Unlike Argentina, the most popular form of the domain is the direct second level domain. Dot com or any other domain extensions other than the .cl are almost non-existent.
Greece and Spain
At Greece I had the opportunity of visiting several places mainland, as well as several of their islands including all of the most popular ones. Again, the ccTLD .gr was by far the most dominant in all the places I visited. In Athens, I saw a few dot com addresses, but possibly no more than a 10%.
Finally, in Madrid and Barcelona I continued to see the same tendency as the other places. One significant difference was Barcelona – which might be indicative of what’s to come. The official extension in Barcelona was not the ccTLD .es. Rather, the gTLD of choice is .cat, which is short for Cataluña – the region Barcelona belongs to. Aside from the government using .cat as their official extension, and many businesses using .es, there was also a few .com and .info domain names used by businesses.
Conclusion
Important regions like Cataluña could push for having their own regional extensions (and they currently are), opening the opportunity to register domains under those new gTLDs. The new CEO of ICANN has expressed ICANN’s path towards the creation of new gTLDs.
“For example, the chief of the Zulu tribe, His Majesty King Goodwill Zwelithini kaBhekuzulu, recently sent a letter notifying us of his intent to register the dot-zulu domain name so that different but related businesses and other groups can be linked by their domain name to the entire Zulu community. According to His Majesty, “We believe that the .Zulu TLD, as conceived and proposed by the Dot Zulu Project Inc. represents the best interests of the Zulu community and will be able to provide a viable structure for us as an evolving community.” New York City and the city of Berlin have expressed a similar interest in their own domain names. It is impossible to imagine the possibilities that could occur when these and a multitude of other TLDs are opened.”
If we extrapolate from Barcelona, when trying to enter a local market outside of the US, descriptive or generic domain names including the region or country (Berlinicecreams.com) will most likely be less desirable or useful than the new forms of gTLDs covering those regions (icecreams.berlin). I can see a dot com as being more desirable if it is in the travel industry, where the visitors are not the locals, but rather a population of foreigners.
There are many countries out there that still have high value generics available for registration. There are also still relatively low prices for premium generics in the secondary market for some countries. However, one big impediment has been the management of these domains, scattered through multiple NICs all having their own particular ways of renewal. So, if you are willing to deal with that inconvenience, then ccTLDs and new regional gTLDs could be a good pocket of growth for Domain Investors.
Acquisition Opportunity for Yahoo or Google- Marchex
Last time I analyzed CNET’s individual assets, the company was acquired 4 months later. Now, amidst the current economic nightmare, there is a fresh new opportunity to grab a gift – Marchex (MCHX). Yahoo, who’s recent conflicts have left many asking for Yang’s head and who’s stock has lost almost 50% since failed negotiations with Ballmer, has a small opportunity to vindicate themselves.
Of course, there’s also Google who needs to continue increasing their revenues in order to support their generous stock PE. Although I would insist that this is a more logical acquisition for Yahoo! to build themselves into a more attractive position for Yahoo! to be acquired, possibly still by Microsoft.
So, what does Marchex bring to the table?
High quality traffic and prime Internet Real Estate.
By its own, Marchex is priced slightly below their current value. However, when you take Google or Yahoo’s advertiser base and traffic sources and fuse it with Marchex’s high quality domain portfolio you get a multiplier effect.
Marchex has made two brilliant moves:
1. Spanish domain portfolio acquisition
This portfolio contains over 100 of the most attractive Spanish domain names and was calculated to generate more than one million unique visitors per month. Of course, these are mostly visitors coming straight to the sites, because of type-in traffic. Take a look at the jewels:
mujer.com (women.com)
fotos.com (photos.com)
deportes.com (sports.com)
salud.com (health.com)
peliculas.com (movies.com)
mascotas.com (pets.com)
futbol.com (soccer.com)
cocina.com (kitchen or cook.com)
tarjetas.com (cards.com)
dietas.com (diets.com)
computadoras.com (computers.com)
The whole list is found here http://www.emediawire.com/releases/2007/5/emw527846.htm
The value of these domain names are like a slow curve that quickly accelerates exponentially as the Spanish market (Spain, Mexico, Caribbean and South America) online advertising solidifies. One must understand that this market has been extremely slow to develop, mostly because of the number of computers available in each household and lack of understanding from old school marketing executives. However, the panorama is changing quickly and will fuel advertiser dollars to the ‘net.
The Spanish domain portfolio could be easily worth $500 million to $2 billion in a 5 year window, depending on the development of all these domain names into fully usable content and social portals.
The second source of value in Marchex is their 2004 acquisition of UltSearch’s domain portfolio.
In this portfolio, there are over 100,000 domain names of high search traffic value. There are also a few generic jewels in the mix like beijing.com, debts.com, and remodeling.com.
It’s hard to value the whole portfolio and I suspect that most of the names would probably not be of any significant worth. However, assuming even 1% of the names are of the quality of debts.com and beijing.com would make the portfolio highly attractive.
I wouldn’t doubt that this portfolio had at least $100 million in value (Marchex paid over $150 million a few years ago for the portfolio).
Finally, someone over at Marchex decided to accumulate zip code domain name. Wrap them up, put a bow on top of them and sell it for a few million to some telephone company still figuring out their online strategy. I’d also garage sale the auto content generation technology.
Marchex is currently priced at $300 million. Year-to-date they are down almost 30%. This is exactly how much it is worth.. a 30 to 50% premium on its current price.
RE: DNZoom
Sahar Sarid is one of the most active voices in the Domain industry and a leading domain investor. Recently, he launched a contest to determine the best features needed for domainers, to be incorporated in the recently launched DNZoom service. As a domain investor, I’d like to jump in with a few suggestions of what I believe is needed to improve the domain investment market:
These suggestions are in no particular order:
1. Have active offers with expiration dates or without expiring. I have seen way too often in the domain forums how sellers of the domain claim that they once received a “$x,xxx” offer for the domain once. Well, make this process transparent. I want to buy xyz.com, I give them a $xx,xxx offer that will expire in 2 months. I give them a $xx,xxx minus $x,xxx offer that will never expire. This offer is visible – it is active. Other buyers can see the active offers on the domain. The seller can choose to execute the sale based on these active offers any time they want.
This adds value to the market by establishing floors on demand for domains. This further increases the amount of data available for calculating the value of comparable domains. Active offers by reputable buyers could even serve as collateral for the owner of the domain to take out a loan.
2. Expiration dates for domains should be active. By this, I mean that there should be buttons for me to click on and have it add the date to my calendar. Palm, Google, Outlook. This way, as I search for domain names, I can click on this active link and instantly integrate it into my calendar system which will remind me when that domain is going to expire.
Furthermore, you could have a paid service of receiving an SMS alert when a domain is close to or has expired.
3. Group data on an industry and provide a perspective to domainers on how well they are performing on their monetization. (OK this is a bit hard to do) But imagine if I was in the “travel” industry. How are my travel domains performing relative to the entire pool of travel related domain names? Which parking service is performing best for that industry. Perhaps lead generation by xyz parking company is proving to be more lucrative in this industry. Perhaps it is Cost Per Click by abc company.
4. On that same note, let domain holders know when specific industry domains are being sold. If I have a strong portfolio on “car” domains, it is more likely that I will pay a premium for a domain related to “cars”, because among other reasons, I have a multiplier effect in income when I hold many domains from one industry. So, identify or ask domain holders which industries they are interested in, and notify them when a domain has been put on sale or expiring auction.
5. Transparency on traffic and revenues! Offer the option to share certified income reports and/or traffic with prospective buyers, or simply to share it in a public space. If publicly shared, then integrate it into the whole search experience. This way, people can search the whois and see the field for traffic and revenue of that domain. Or search by traffic and/or revenue. Buyers can then make their offers in the style of Suggestion #1.
6. Open is the new black! Once you have gathered enough data, put it out to the world in the form of APIs. This will make the industry stronger, unleashing valuable data for bright minds that want to build applications we haven’t even imagined.
I hope many of you choose to participate in this contest and make this industry better.
Quick Q&A: Could the value of a premium generic domain name depreciate?
This is a debatable subject. The specific question I want to consider is: When a company accomplishes a dominant leadership position in an industry, how will the generic domain most descriptive of that industry be affected in its value?
Here are three examples to consider:
Books.com – This is a powerful generic domain. Yet, it would be interesting to learn how many actual type-in visitors it generates for Barnes and Nobles. The reason – Amazon.com. Amazon has become synonymous to books for most Americans. So, when people buy books, how much type-in traffic has Amazon taken from Books.com due to a powerful brand?
Auctions.com – You probably said it in your mind before actually reading it – eBay.com. Perhaps their success was greatly influenced by fate/luck, when they tried to register echobay.com as their website’s domain name and it had already been registered. This is why they had to shrink it into the catchy four letter word. Again, when you want to buy or sell in auction format, how likely would it be for you to type-in Auctions.com, rather than eBay.com.
Search.com – Some lawyers are even trying to stop reporters from using the term “googling”, as search giant Google overshadows even the phrase “to search” with the increasingly popular phrase “to google”. How would you think this change has had an impact on the value of Search.com?
If in these three cases you agree that the word actually lost value, rather than appreciated in value as a company grew into a leadership position of the industry, and you own a premium generic name for an industry in which a new company is growing to become a leader of that industry; then you should try to sell the domain name before the company establishes itself as the leader. Or at least for accounting/tax purposes, you should be able to begin a trend of depreciation from your asset as the company’s leadership position solidifies.
Idea on Spam Reduction
This is an idea that just occurred to me on dealing with Spam from a large email provider, such as Gmail, Yahoo Mail or Hotmail. Back in 2005, I had written a post on how effective Gmail had become on spam and how they could use that understanding to offer an attractive option to domain owners to have mail on their domain (which as we know now is a Google offering).
Currently, Google’s Gmail is ideally positioned to benefit from a largely ignored market of e-mail outsourcing. To that effect, the implementation of effective spamming tools, together with Gmail’s clean and organized web-format would benefit many individuals. More importantly it would benefit businesses, both large and small, for which Gmail could handle all of their e-mail traffic, hosting and storage needs.
The question then becomes how to extract the maximum value out of move to significantly reduce spam? To maintain Gmail’s current business model and improve their companies image Google should still maintain their free individual email accounts. However, to address the business communities’ needs for an efficient anti-spamming email service, Google could offer a subscription email solution.
Technically this would involve Google setting up private label paid accounts where companies and individuals could set Google as their mail server and view their e-mails in a Gmail’s online interface or through the clients PC based email programs; such as, Eudora and Outlook. (read more)
Despite advancement in this field, spam reaching our Inbox is still much higher than desired. Following on that note, I believe that an effective spam blocking tool could actually be your users. In a large enough pool, employing your users in a style similar to Amazon’s Mechanical Turk, spam filtering could actually make your spam machine more precise in reducing spam. Here’s how I envision it:
- Identify the spam reporting activity of your user base
- Separate the x% of most active spam reporters within your user base
- Analyze your active spam reporting group’s precision in actually reporting general spam, rather than personal specific mail which they report as spam incorrectly and filter out those who use the spam reporting tool incorrectly.
- Now you should have a clean spam reporting pool (SRP) of users at a 9x% confidence level
- Plug in those users who you identify from the SRP to be online, into your spam filter engine so that emails with a high spam score that are not high enough to be discarded in the automated process are first sent out to your online users in the SRP.
- You should then receive a percentage response of Spam from these users that would tip over that email message into the Spam pool, before it is sent out to the general population.
This method can be most effective from a large user pool like that of Gmail, Hotmail or Yahoo Mail, because many Spam efforts are directed to the email provider domain (gmail.com, hotmail.com). Gmail is in an even more advantageous position, given their management of Gmail for your domain, which could serve as an extra window on spammers focusing in a more heterogeneous domain attack.
CNET Acquisitions
For the past several months, I have been watching and considering an investment in CNET Networks, precisely because of its attractiveness of individual assets, which if spun off could suggest a much higher total worth than the current $1.3 billion. However, upon closer inspection of the individual parts, I am still not convinced that the sum of its parts, under current conditions, is worth more than its 1.3 billion. CNET is currently carrying too much fat and producing mediocre returns on their prime jewels. Take for instance News.com, which as suggested by the NY Times produced in October a mere 6 million page views, compared to 8 million page views produced by a small group of bloggers with minimal costs over at TechCrunch.
The key of course, is finding buyers for CNET’s crown jewels, which are:
- TV.com – This is currently a site which alone could be worth more than CNET’s current market cap, but the focus of the site is its main problem. TV.com is aimed at providing a TV guide resource – big mistake!
Instead, TV.com could become the place to go for TV watching, think YouTube or Hulu. Capitalize on the millions of confused visitors coming in from the highly marketed .TV extension. Strike deals with media companies to stream television through TV.com. Stream everything under the sun! Sell the idea to Mark Cuban, sell it to Murdoch. Try to get a link from future generation television sets that are integrated with wireless internet, so that TV.com is the link to online television. How many people are looking to buy a TV and just type TV.com? Have a section in the site for TV purchases, cable subscription services.
The current site is probably 10 to 15% of the traffic and revenues it could achieve.
My current price – $100 to 500 million. Future worth with minimal refocus – $1 to 5 billion.
- News.com – When you type News.com, the first thing you see is technology news. Get over it. If I want technology news, I will type TechnologyNews.com, Technology.News.com, or TechCrunch.com. I don’t even want to know how many of CNET’s 2,600 employees it takes to run this charitable venture costing investors $16.65 million last quarter. Again, as TV.com, News.com is being used for less than 15% of its capacity.
When I type in News.com, it should be news about everything. I want to see videos of what’s happening around the world. I want to get international perspectives for what is happening in the war in Iraq. People should find ALL possible resources on news information and be able to interact and contribute. Oh so many possibilities!
My current price – $50 to 300 million. Future worth – $0.5 to 1 billion.
- Download.com is fairly well developed and should fetch a good price. I don’t have specifics on how much it costs them to offer what they claim to be a, “a rigorous testing process to ensure it is safe and spyware free”. Unless this rigorous testing process is subsidizing a considerable number of employees, an automated system should not represent a considerable cost. Advertising money here should be flowing comfortably in the black.
My current price $50 to 150 million.
- Search.com – Wow, these people really knew how to pick their names. However, as Google becomes a household synonym for “search” I am less confident in this domain than what I would have been five years ago. I would assume that this is a rapidly depreciating asset and should have been shopped around much earlier. Sell it to Sahar Sarid for his search venture Assista. I am sure he’d appreciate the value it can bring to own the direct synonym to Google in his quest to take a bite of that space.
My current price $10 to 20 million (perhaps more depending on current traffic and revenue numbers)
- Chat.com – Give me a break! This baby redirects to cnet.com? Yes, it should be a crime punishable to death. Chat.com has no home of its own. I’ve personally shopped around to buy chat ccTLDs and have already developed one into a chat site. These sites are great, because they are cheap to build and to maintain, and user loyalty is huge. Chat.com is a dream domain with immense potential. I want it.
Suggestions for this site are obvious – build chat channels and capitalize on the type-in traffic, which will serve as the commencement of an avalanche of visitors. These people spend 20, 40, 60 minutes straight in a page. Even at $2 CPMs, this is one site that could produce millions. Instead, old grandpa CNET reasons – if they type in chat.com it must be they want to read technology product reviews! Shame on you CNET.
My price $300k cash, right now! OK, seriously – $5 to 10 million – and the 10 is pushing it, because there’s no community. This is just a domain name purchase.
Future worth – $10 to 50 million easy.
Mp3.com – $5 million
GameSpot.com – $4 million
ZDNet.com – 3 million
TechRepublic.com – $2 million
mySimon.com – $1 million
UrbanBaby.com – $500k
Chow.com – $300k
As you can see from current conditions, a $1.3 billion market cap is reasonably priced. Yes, many of us see potential in a much higher worth, given the properties they own, but right now there is no bargain investment in CNET unless you have the power to enforce radical changes to current management or have faith in Jana’s capacity to push for that change.
2008 Internet Predictions
To continue with the tradition of those who like to make predictions for the New Year, I have recovered an old crystal ball which has shown me the following Internet changes coming for the year 2008:
1. Big search engines will update their algorithm to favor country code top level domains (ccTLDs) in local search related queries.
2. As a result, in part, of number 1 prices and liquidity of ccTLDs will rise.
3. .mobi will continue to gain momentum, even though I have opposing feelings about this extension.
4. People will learn to understand the importance of IDNs and the value of these will rise – specifically for one word IDNs under the corresponding ccTLD or under the .com and .org.
5. Thousands of wannabe land rushers will flock to try and get a piece of China’s Internet population – and like in the West, most will fail.
6. General Internet users will be more knowledgeable of the Internet and search – reducing Type-in traffic for common words under the .com extension.
7. Many successful Internet ventures will start as tools built for users within Social networks, and no longer start from a single proprietary website.
8. A top Internet executive will be arrested.
Hey, don’t argue with me. This is what the crystal ball showed me, and it was very dusty.
May this New Year bring much love and happiness to all.
HAPPY NEW YEAR!
IDNs are coming to a home near you
An IDN, or Internationalized Domain Name, is a domain with characters other than the regular A-Z and 0-9. For example, in the Spanish alphabet, there are symbols like “ñ, á, ó”, which up to now could not be represented in a domain name. This will change now, as ICANN (Internet Corporation for Assigned Names and Numbers) and the newer versions of Internet browsers support the IDNs. Therefore, if you are not familiarized with IDNs yet, or doubt the immense significance it plays internationally for the Internet, then watch these two introductory videos by ICANN:
Part 1
Part 2
Rafael Sosa's Weblog 