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Old 25th July 2008, 07:02 AM
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Google Parking Changes and Arbitrage

Google Parking Changes and Arbitrage
July 24th, 2008

What effect will Google's changes in domain parking have on domainers?
Over the weekend Julia Mackenzie scooped that Google was planning changes to domain parking.

I reached out to Sedo and DomainSponsor to find out when these changes will be implemented and any details. DomainSponsor declined to comment. Sedo CEO Tim Schumacher said:

"While we cannot discuss the confidential nature of our relationships with partners, Sedo generally welcomes any change which is aimed at increasing the credibility of the domain parking network for advertisers. We also always encourage Google to seek a dialogue with us and other partners in the domain space before any change to the domain parking product is made, in order to ensure that any solution will benefit all parties in the space, meaning domain owners, advertisers and Internet users."

In general, domainers are in favor of changes to domain parking that improve the overall stature of the business. That includes making sure advertisers get a bang for their buck.

So what do these changes mean for domainers, if they are implemented as Mackenzie suggests?

1. Parkers that depend on residual backlinks to their domains may be hurt. It's unclear if Google's algorithm will weigh conversions or likelihood of type-in traffic higher. I don't see why Google wouldn't want traffic from residual links (since most traffic to Adsense-monetized sites is from backlinks and search), but this could be one of the side effects.

2. Parkers with lots of .ws, .info, etc. domains may find that ads are no longer being served.

3. Anyone still using a Google feed on arbitraged pages is toast.

Frankly, I don't mind point #3. It was painful when Yahoo nixed arbitrage earlier this year. I didn't do arbitrage, but it turns out I referred many people to parking companies who were. It was a major revenue hit for me. But the more I've learned about arbitrage the more I understand how most of it was bad for advertisers (and thus bad for domain parking in the long run).

I wrote about some of the "trickery" behind arbitrage last year. One form is making bogus claims in ads that send traffic to parked pages. For example, suggesting that you'll find 0% mortgages on the page, or that the site was featured in USA Today.

Here's another example I came across recently. As I've written before, I own a 529 plan web site. I recently searched for "529 plans" on Google and came across an ad that said its site had information about 529 plans. When you clicked on the link, the site showed ads related to "savings plans", not 529 plans (a specific savings plan for college). If a user landed on the page, he or she would click ads expecting to get information about 529 plans. The user would click "back" when they landed on a page about opening a regular bank savings account instead.

It's not that arbitrage can't convert. But people are abusing the system. In fact, a recent check on one of my Adwords campaigns showed excellent conversions from parked domains including arbitraged domains. This is exactly why domain parking needs to be cleaned up: it can convert extremely well. There's just a lot of noise in the system.
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