Ive had a few emails and follow up postings asking for more information about what I discovered when attempting Parking Arbitrage, so I wanted to follow up with posting about it. The first thing I discovered is that there is a big learning curve at first. It took me about a week of experimenting with domains and keywords and traffic providers until I found the right mixture, and began generating profit. I was making about 100% ROI (Net). Which basically means if I put $1 into the system, it generated $2. I was quite happy with my results, and was making about $50 per day in profit and had noticed that everyday I would make just a little bit more money.

What happened? Yahoo shut the gates. I suppose the argument that has been floating around is that its better traffic wise if the advertisers don’t get arbitrage traffic. However, this surprises me because this is traffic the advertisers wouldn’t get, if it wasn’t “funneled” from google or msn anyway. Basically now they are limited to only traffic from Yahoo.

I found that the most challenging part of Arbitrage was getting enough traffic at a reasonable price. My best keyword domain happened to be with “Boots”. I was buying traffic from boots and advertising “Knee High Boots”. I was able to get about 100 visitors per day from Google at about .18 each, and turn a click at parked into .24. Now you might say thats not much of a profit if your buying the keyword at .18 - but you must consider, the CTR was upwards of nearly 200%. That meant every visitor was clicking on about 2 ads each. I found that because I didnt have hundred of visitors per day, the 1 click landers worked out very well.

I managed to ways to get a 1 click lander instead of a 2 click.  I was buying keywords that were hyphenated and in the .info extension. For example: engagement–rings.info.  Because yahoo didnt care about the hyphens, it read the keywords and produced a 1 click lander. (This particular domain was not much of a success, it made little compared to others because of the cost of clicks).

When the system came to an end earlier this month I was quite disappointed. I had gotten to a point where I was making enough per day to cover rent on my home. I have no doubt that within another month I would be making a couple hundred dollars per day, with enough effort and luck.  Its a shame they closed the doors on this process as just about the time I figured out how to do it, it all ended.

Justin

Over the past few weeks I have been pondering the entire social system of our little industry. Ive given this quite a bit of thought because as of late, Ive been trying to understand where I fit in the puzzle. Ive come to believe there are several levels of “domainers” and I have named them in the following “pecking” order:

1. Newbie/Rookies
2. Hobbiests
3. Part-Timers
4. Quality Holders
5. Full-Timers
6. Whales
7. Elites

The Rookie is exactly what he sounds like. Hes Fresh into the domain field, hasnt much of a clue, other then he smells money, and he wants to catch a piece of the action.

The Hobbiests are a group of Domainers who have dabbled a bit buying and selling on Forums. They have their entire portfolios listed on Afternic or Sedo and typically own less than 100 - weak quality domain names.

The Part-Timers have a reasonable investment, and a reasonable amount of knowledge about the game. They invest in domain names and make their presence known on domain forums.

Quality holders are investors, who simply by domain names they feel are or will be valuable and sit on them until a large resale materializes. They rarely monetize their portfolio, and if they do its simply parked usually don’t even bother trying to optimize it.

Full-Timers are well versed domain hustlers. They constantly are looking for a good buy and an even quicker flip. They post constantly on forums, and there sales typically range in the hundreds to mid level thousands.

Whales are big fish, who either have been in the industry for some time or have the financial backing to quickly buy up a quality portfolio. They dont sell on publicized forums, and their holdings are usually in the 10’s of thousands (higher quality domain names)

Elites are the top of the Domaining food chain. They own or operate some of the biggest companies in the field. They possess THE best domain names available, and often times are not just people, but large business entities. This group of domainers has had some influence on this industry on or before the .com bust.

So, which group do you fall into? If you feel I have missed a group please feel free to make recommendations.

Justin

Parked.com just sent an email to its customers, advising that Arbitrage as of Feb 14th, will no longer be tolerated at any parking providers using a Yahoo feed (including Parked.com). The following email was just sent:

Dear Parked.com customers,

We were notified today by Yahoo that all Yahoo based parking companies, including Parked.com, must begin enforcing the no arbitrage/no paid traffic general provision. As a reminder, Section 2 Subsection g. in the Parked.com Terms of Service states:

“All other types of traffic including bought traffic, traffic driven by PPC campaigns, traffic directed from hyperlinks are not permitted. If your traffic originates from any sources other than type-in and search engine traffic, you will not be entitled to payment as per this Agreement. Regular checks are carried out and we reserve the right to suspend any domain from our Service at any time, on our sole discretion, if we reasonably believe that you have violated this Agreement; for example, if we suspect that the traffic on your domain is bought, generated or redirected in any way that contravenes these terms and conditions.”

For more information please see http://www.parked.com/tos/.

Accordingly, all arbitrage must stop effective 1pm PST on Thursday, February 14, 2008. Even though arbitrage will no longer be allowed, all accounts will still be paid.

If you have any questions please do not hesitate to contact your account manager.

We thank you for your business and continued support.

What does this mean? It appears that Parking Arbitrage is coming to a clean quick death. Quite a few people were making a substantial amount of money using this “frowned upon” technique. Expect many people to be upset, and looking for a new way to recoup that cash flow. Interesting to note, I recently gave parking arbitrage a try, and found it to be a very complicated and a difficult challenge, to convert cheaper traffic to higher paying traffic. Although I never came close to mastering the practice, I am sorry to see it go. On another note it is interesting that Yahoo has opted to stop taking advantage of this gravy train. Im sure more news will come in in the coming days and weeks.

Justin

Godaddy and TDNAM was robbed again. Not literally of course, but thanks in part to when they auction off their domain names, many of them get reclaimed prior to ever completing a sale. FreeClinic.com sold today for just over $20,000 and moments after it sold, was reclaimed by the owner, who more than likely was flooded with phone calls today from eager domainers, trying to cash in on a loop hole.

Basically what happens is TDNAM Expired domain auctions end just over a week before the domains will be transfered to their new owners. This gives the original registrants a few days grace period to pull the domain out of redemption for $80. Most of the time this doesnt happen, but whenever these big domains hit the auction block, you can bet atleast one person is calling the owner, offering to purchase. Sometimes some great deals can be had this way.

Bottom Line? If Godaddy wanted to be just a bit smarter about it then this, they push the auction date to coincide with the “drop” date. This way if you won an expired domain at TDNAM, it would be in your account later that day.

Justin

One of the most important things when managing your domains is insuring that they don’t expire if you intend to keep them. Several months ago, I contacted a domain owner by email, inquiring about their domain name. At the time the domain wasn’t resolving anywhere. The owner responds with a lengthy email about how they intend to keep the domain name and eventually use it. They appreciated my offer, but they wanted to pass. The domain had was registered through Network Solutions, so I went ahead and placed a backorder on it, considering it costs me nothing unless the domain name is captured (and won in auction).

Guess what happens? They failed to renew, the domain expired, and just the other day it was locked in an auction at NameJet. Unfortunately there are 2 other people bidding on the domain, as I was the first to bid, my bid is currently the highes at $69. Interestingly enough, my offer had been more than this bid. If the auction does end without further bidding, then I was acquire the domain name at a significant discount.

The Lesson? If someone offers you money for your domain name, make sure you renew it on the spot. Even if you opt not to sell, you insure that a mistake doesn’t happen or that you don’t forget to do it later.

Justin

Christian Higgins, an account manager at Parked.com (Domain Parking Company) was recently on the Television show “Who Wants to be a Millionare” where he walked away with $50,000 in price money and a pair of gold rings (reported by DomainNameNews.com). Its always nice to see people in our niche industry out in the real world, when good things do happen.  I tip my hat to Christian and the fella’s at Parked.com who do a fantastic job.

Anyone in the drop catching business, was aware of this bizzare turn of events. Shoppers.com which was a Network Solutions domain name, had expired (and had an invalid email addy). For some reason, instead of being sent to NameJet (which is their expired domain auction platform) the domain went to pending delete. This meant that any drop catcher could grab this domain name.

So, who was the lucky catcher? Pool.com - They then sold the domain name for $166,000 dollars. The issue was uncovered by DomainNameWire.com - who reported that after a review, Network Solutions determined there was a glitch, and it did not recognize the domain name (to send it to NameJet). Thats an expensive glitch, one which now is supposedly shut.

Its ironic (or is it) that the day after I post on this subject matter, I get a little slap from Google. The niche category I was seeing some success on, was reviewed by google, and they decided I neeeded to pay a bit more for my keyword. Although it wasn’t a huge jump (.06 per click) it effectively made the campaign less profitable by about 30%. Although frustrating, each day I seem to settle in with better numbers. This game is definetly trial and error but each day I have been dedicating about an hour worth of work (setting up new campaigns, and adjusting old ones) and it seems to add a $1 or $2 each day to the bottom line. What im starting to notice, is with my strategy, I dont see ever finding a campaign thats going to generate $100 + per day on its own. Which means I’ll have to settle for a thousand small campaigns. I’ll update more on this category in a few days.

Justin

Well, some of you may have noticed this blog hasnt been updated in about 2 weeks. Ive been swamped. I had decided to throw my hat into something called Parking Arbitrage, which is basically buying traffic, and sending it to a parked page. Be Advised, its very complicated, and VERY hard to pull off. In about a week, I can say I have successfully created about 3 campaigns that appear profitable. (1 is making about $5-15 per day and the others, randomly making a few dollars) The issue here is mainly trying to figure out how to get as much traffic as possible, to the right pages, for the right prices/return.

I can promise you this. It took a solid 3-4 days of frustration before I was able to create a “successful” campaign.  I will update further this week when I begin to open up the doors more, as Im just starting to find a workable formula that seems to work for me.

Justin