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I'd like to share our experiences with Sedo and how we've lost faith in our parking business model as a result. As it stands today, we literally are a standstill and wondering if it's still worth our while to work in the domain market. I am open to your perspectives on this.
As a bit of an intro, I will give you some numbers. Our colleagues and ourselves own quite a large number of european domains. Slightly in excess of 100k. The majority that are parked, are parked with sedo and the makeup of the portfolio is ubiquitous. Covering every topic you can think of and in multiple languages. We park with sedo because I don't see any other choice for European traffic. I would love to be proved wrong and be shown an alternative (yes, I'd be happy to try parking logic), and this post will elaborate why I'm frustrated.
We have been relatively content to acquire domains, park them, and move onwards over the years. This would be fine except for the fact that parking revenue never, and I mean literally never, does anything but go down. Regardless of the size of the portfolio, from a single domain name to a portfolio of 1000 domains to a portfolio of 10,000 domains, etc. Guaranteed, if we place these domains at sedo, the income will drop over time.
1. As mentioned in another thread here, it will spike initially then drop off in a few days.
2. After a month or so, the income will drop further.
3. After a few years it will drop yet again further.
Paraphrasing discussions with Sedo, the gist of negotiations are "we are bound by our contract w/ google" so "you will have to trust us". I don't trust them. I will post a few more tangible examples.
Recent Tests
We recently tried a new set of domains out with Sedo. In doing so, what we did is ran some random sample tests at sedo to start. The first, we took a filtered a mix of generics, typos, and "other" and parked them with sedo. (Total domains roughly 1000). The results of this test was an average earnings per day of about 14 EUROs, with a range of about 11-17.
Results were relatively positive for us so we then did a second sample. This time, instead of filtering we took a completely random draw from the portfolio, not looking at all type of domain. Again about 1000 domains. This time, the results we found were an average of about 14 EUROs, with a range between 11-17.
Again something we were content with. The next step was to insert the full portfolio to Sedo, bringing the total to > 30,000 domains. We of course expected something similar, there's really no other number that we should be looking at here. The results were an average of 3.8 EURO per day, range of 3.33 to 4.40 EURO.
Further, my colleague happened to log into Sedo to check earnings on the broader portfolio. It came in at ~290 (9.5 euro average). Then he received an error message that they were doing nightly update of stats. When the update was complete, the earnings now read as 140 EURO. The 290 really did corroborate our initial beliefs from the sample test, so what happened?
147 -> ~4,x euros a day
292 -> ~9.x euros a day
I really hate the idea of this, but it really seems to me Sedo is not playing fair ball here.
Example 2
In 1st quarter of 2008, we've seen a drop of 33% revenue on our other portfolios. Yes you read that correctly, 33%, 1/3, revenue drop in 4 months). This income has been steady for over a year. 33% drop with no decrease in traffic levels and very large number of domains. Sedo's response was a market downturn, I'd love to hear some other responses to this. We own traffic in lots of places including purely US based traffic & advertising, our revenue hasn't seen a downturn at all. This is european traffic being sold to european advertisers, even if there is a downturn, 33%?? Is the parking market really that bad, please give me some feedback if you have similar experiences.
What's next?
We're only just starting, we can bring it more domains and more traffic and more revenue. I would have thought this kind of model would be appealing to a parking company as it's good for them too. When we see these kinds of results though, it's impossible to take the business model forward.
At this point, the only thing we can conclude is that Sedo is messing with EPC. I'd approach Sedo about this further but honestly, at this point I don't expect a frank response from them. We've seen enough empirically to know that something is definitely not right with their systems. Rather than speculate whether its' an intentional screwing or one due to inefficiency of systems, I'd like to find our own solution to it. Whether it's gaming the sedo system so we're continually riding the spike, submitting only smaller portfolios of 1000, alternating domains in and out, or ideally finding a genuine and legitimate competitor who wants to work with us fairly and honestly.
Post edited by: lotom, at: 2008/06/25 06:19
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