Domain Name Values

Prior to the recent work on the article about ConAgra's use
of the peanutbutterrecall.com name, we had been working on
a study of domain name appraisal tools.

Our working theory is that, while lots of people say the free
appraisal tools are worthless in setting value, we still think
there is merit in trying to take a few and grid a set of names
against them.

The idea is to use services like Estibot, Nameboy, etc., and run
a list through all the free tools. We did, in fact, do that for
several of the big live auctions, last spring and this spring and
summer.

But this is way too big of a job for anyone to take one solo.

So, I'm rethinking the project and may put it out for the community
to discuss. After all, if there is some merit to this system, then
it should be shared for others to use.

And if it's really no go, then I would like to see if the process
can be tweaked.

Anyway, signing off for now.

Penguin

Got a Killer Domain Name? Good. (Pt. 1)

DON’T Use That Domain Name & It Could Be Worth MORE!
By Tim Morse, President and CEO, Penguin Search Engine Services, Inc.

Domain Names. Live domain name auctions. Another week of online bidding to follow. The two Moniker live auctions alone pulled in over three million dollars. Yet some people inside and outside the domain industry are still wondering how much a domain name is really worth. Domain name appraisals will vary according to the name. Is the domain related to a product, service, food type, brand, or idea? Do people search the terms frequently? How much money is the domain name making? How much money can it make for ME?”

Some say that a domain name is worth, “whatever someone is willing to pay for it.” But is that always true?

Deeper Domain Name Values

Domain name sales prices are attached to revenue potential and PPC/ROI models. We suggest, however, that sometimes buyers might push aside revenue models to look at “deeper values” for certain types of domains. Sometimes, buyers may be looking at the advantages of owning but NOT utilizing the name.

To obtain maximum value from this kind of domain name, circumstances would have to call for HUGE tangible and intangible advantages for the organization owning the name. Advantages that would last far longer, and grow much greater, over time when compared to a straight forward accrual of income. Core aspects of the business and interrelated systems are involved at this level.

Owners in this category are very large organizations, including major corporations, international enterprises, or otherwise big end users. Or they could be smaller players who are seeking extreme leverage in a particular niche or market. We’re talking about domain names that are flexible enough to be used defensively and/or offensively. These domain names are those that could either save (or lose) a company vast amounts of money, build or wreck reputations, and severely impact customer loyalty, branding, and brand management. These domain names can ultimately affect not only consumers, but shareholders and employees as well.

For ease of reference we’ll call them “DEO” (Defensive / Offensive) domain names, or deo names.

In this sense, a deo name is a domain name that has a magnitude of power attached to it that is so great that it would be imperative for an organization wishing to gain the upper hand to own it. But, even if there are such types of names, could a domain name REALLY be worth more to an owner by not using it? Maybe.

Granted, this is a major paradigm shift for the domain industry. And, in the case outlined below, it’s a moot point. That name is long gone. But are there others out there? We think so. By following the history and circumstances surrounding this particular registration, we hope that domain investors and end users will become more aware of the potential of identifying and owning a deo domain name.

Finding Corporate Domain Name Buyers

The domain name registration we’re going to examine involved a major corporation and an incredibly big product recall.

More than 18 months ago, in February 2007, domain registrations and strategic activity in this particular niche were pretty intense. If the domain in question had already been purchased and was on the aftermarket, we feel pretty confident that the owner may have gotten an offer for it.

Once you read a bit further, it should become clear that deo domains would be highly attractive for corporate buyers. Buyers who are properly educated, that is. To help in this education effort, we are exploring the registration, even though it’s more than 18 months past, for three main reasons.

First, since this particular domain name registration, other major food and product recalls have been announced, heightening awareness of food-borne diseases and product safety. These recalls have, in turn, competed for “mind share” in the consumer space and have created shifts in they types and brands of products that consumers are willing to buy. This news has sometimes disrupted consumer confidence and forced producers and manufacturers into damage control status, while they struggle to regain profitability and market share.

Also, companies are slowly taking advantage of generic, brandable domain names to help craft corporate messages that augment or widen current marketing activities. Some companies are beginning to understand that they can create unique domain names to build messages and Web sites around.

We also believe, however, that many more don’t yet understand the opportunities, or the potential of acquiring an existing domain name that is more broadly keyword-focused. And we think that many companies don’t have a complete understanding of, or appreciation for pricing in the domain name aftermarket, as compared to the value received, either.

Second, we’ve observed that sellers still struggle to find motivated, serious buyers outside of the domain community. They continue to opine that “end users” should be better informed about their industry. Better able to understand domain name assets and valuations. Further, sellers complain that the majority of available buyers at these live events seem to be other investors, albeit investors at higher levels. Buyers, conversely, are concerned that sellers are seeking too much for the names they put up for auction.

Both sides, apparently feel that the live auction process needs adjustment. By looking at “deeper values,” we hope that marketing managers, brand strategists, CEOs, etc. will become more aware of domain name opportunities. That they’ll see the consequences of making or missing a strategic buy in a registration or an aftermarket setting.

Third, with the rockiness of national and global financial conditions, businesses need to maximize their ROI. They need strong advertising/marketing channel assets. Clearly domain assets can help accomplish these objectives.

The Domain Name Buyer & Registration Circumstances

ConAgra Foods registered the domain name “peanutbutterrecall.com“ on February 15, 2007, just one day after both the ConAgra and the FDA published press releases on their respective Web sites about the voluntary recall of peanut butter produced by ConAgra.

On Feb 17, 2007, when we first became aware of recall, Penguin SES tried to register the domain name. We then learned of ConAgra’s registration. Penguin SES proceeded to register the other major extensions of the name. For purposes of full-disclosure, Penguin SES is a company involved in the acquisition, development and resale of Internet domain names and currently holds a domain portfolio of more than 500 names.

It’s not surprising to learn that ConAgra Foods registered this URL. The company is a leading producer of packaged foods and manufactures peanut butter, among other things. In addition, ConAgra’s peanut butter brands were being voluntarily recalled in February 2007.

But what may be surprising is that the URL itself does not resolve (as of the date of this publication), and never has resolved to a Web page of any kind. It has also, apparently, never been redirected to any Web page. Was this a good move on ConAgra’s part? What advantages or consequences might the company experienced in their handling of the domain name? We’ll address some of these questions later in this article by consulting with a few industry experts. First, let’s take a look at the history of the situation.

PART 1 | PART 2 | PART 3 | PART 4 | PART 5 | PART 6 | PART 7 |

Got a Killer Domain Name? Good. (Pt. 2)

In order to learn more about the registration and use of the peanutbutterrecall.com domain, Penguin SES contacted ConAgra. In response to an email inquiry dated August 25, 2008, Ms. Stephanie Childs, director of corporate communication, ConAgra Foods, stated that the acquisition of the URL was initially undertaken to provide the company options for their communication strategies:

“In regards to www.peanutbutterrecall.com, ConAgra Foods purchased that particular URL while considering the best avenues for providing consumers with pertinent information regarding our voluntary peanut butter recall announced in February 2007.

“We subsequently made the decision that the best way to provide consumers with information online was to continue to provide information through www.conagrafoods.com, which consumers were already using and was referenced widely in the media, in addition to the other communication outlets (e.g. toll-free number, media coverage, etc.) we were utilizing.”

ConAgra did continue to post other press releases on their corporate Web site as news unfolded during the voluntary recall. But why not redirect the name to a section on the ConAgra site? When Penguin SES sought further clarification regarding why the company had not used or redirected the URL, Ms. Childs stated on August 26, 2008, via email:

“Unfortunately, I don’t have any other specifics about our decision making processes regarding that URL that I could share with you. Overall, our focus was on ensuring that consumers had the accurate information about our voluntary recall via media coverage and other tools available to us.”

To try to address the issues of “type-in” traffic, or direct navigation, with respect to this domain, Penguin SES requested additional information from ConAgra on August 27, 2008.

We sought to obtain other perspectives from other internal ConAgra Foods departments, including PR, Legal, and IT that might be able to shed some light on the utilization, or non-utilization, of the domain name.

ConAgra’s response that same day reiterated that the company had decided to utilize their main URL as an effective way to get out the word concerning the voluntary recall. Ms. Childs further stated that ConAgra had confirmed that consumers were accessing their corporate Web site to get needed information:

“…our information indicated that consumers were relying on our company Web site found at www.conagrafoods.com for information about our voluntary recall. We focused our efforts on www.conagrafoods.com as being the best way to provide consumers with accurate, online information about our voluntary recall.”


On September 9, 2008, Penguin SES made another attempt to clarify ConAgra’s statement that indicated that consumers were relying on the company Web site for information about the voluntary recall. We respectfully requested comment asking whether or not ConAgra was tracking any traffic to the peanutbutterrecall.com URL. Ms. Childs, who was out of the office for a few days, responded on September 12, 2008:

“ConAgra Foods based its decision to provide online information regarding our voluntary recall efforts via www.conagrafoods.com based on the results of consumer surveys that indicated that consumers were relying on that Web site and other offline resources for the information they needed.”

The Process, the Web, the FDA & Magnitude

Since both ConAgra Foods and the FDA worked together to disseminate information about the voluntary peanut butter recall via press releases on their respective Web sites, Penguin SES wanted to understand the recall process in Web terms, specifically, how the FDA works with companies who go through a recall.

Arthur Whitmore, Public Affairs Specialist with the FDA, explained the details. “In most circumstances communication by FDA with a company undertaking a recall is performed by FDA field offices nearest the manufacturing facility,” Whitmore said. “These are the FDA offices where inspectors are located, and from which inspections of regulated facilities are performed. Recalls of food and dietary supplement products are initiated and conducted by the producing firm. FDA has no statutory authority to recall a food product,” he said.

When asked to comment on any special circumstances surrounding this particular recall, Whitmore said, “One special challenge concerned the nature of the product: one that can be held in cabinets, or food-donation warehouses, for a fairly long period of time. The agency took special steps to communicate with the public and the donation community to be aware that product they may have purchased some time prior to the recall should be not be used.” Whitmore also stated that ConAgra cooperated with FDA in the investigation and recall.

Interestingly, when it comes to the communication requirements of companies involved in a recall, Whitmore said that companies have a great deal of control. “They are not required by statute to communicate news per se. However, almost all companies choose to do so. FDA provides advice, including press release templates, to enable the company to write a release that includes basic information related to the type of product and the type of pathogen or deleterious substance. This communication between FDA and the recalling firm is performed by FDA field inspectors. In the rare instance that a company refuses to issue a press release recalling adulterated product, FDA can, and, on rare occasions, has issued a press release itself announcing the recall and including a statement that the firm refused to issue public warning.”

The FDA also received several hundreds of direct inquiries about this voluntary recall from consumers, according to Whitmore. He explained that the agency uses telephone communication as one point of contact. “FDA operates a consumer information line on food issues (1 888-SAFE-FOOD). The line is normally open from 10 to 4 weekdays. In the case of this outbreak, as with other wide-spread outbreaks, we expanded hours of the call-line and opened it on Saturdays and Sundays during the peak of the outbreak.” When asked about the amount of traffic to related Web pages on the FDA servers for the peanut butter recall, Whitmore acknowledged that he didn’t have that data, but he commented that the agency continues to augment its Web capabilities.

“More and more, however, FDA relies upon its website to place information and advice for the industry and the public concerning recalls, warnings and advisories on regulated products.” Whitmore shared that the FDA also feeds its information out to various news and information outlets, to ensure wide distribution. “Our press releases are distributed electronically and, with big recalls, often include links to site pages with more info. I can also say that FDA is working to increase visibility, accessibility and usability of recall information on the FDA website.”


PART 1 | PART 2 | PART 3 | PART 4 | PART 5 | PART 6 | PART 7 |

Got a Killer Domain Name? Good. (Pt. 3)

Perceived Value & Deo Name Analysis - Competitor Perspective

There is certainly nothing illegal about the non-use of a particular domain name. Companies are well within their rights to use or not use domain names they register.

It may be of interest, however, for those who like to look at search trends, type-in ratios, and etc. to note that searches for the phrase, “peanut butter recall” for the period February 2007 and following show a significant activity spike. This Google trend map highlights the spike corresponding to the approximate publication date of the voluntary peanut butter recall press releases.

From its research at the time, Penguin SES learned that during the period between February 7, 2007 and April 8, 2007, the average number of daily exact match search results in Google was 498,228 for the phrase peanut butter recall. The average number of exact match search results for news stories in Google News was 495. Search results are one way domain investors measure domain value.

Today, a general Google search shows 26,200 exact match search results, while Google News exact match search results yield only a single page. While not all investors measure news results, our thinking is that the higher the correlation between the news results and the general Google search results (especially for an exact phrase match), the higher the value of the domain name.

Penguin SES also tracked the number of exact match keyword searches for the phrase, “peanut butter recall” from the time the recall was announced until the news bubble settled down. Using a well-respected keyword research tool for this analysis, we learned that the predicted number of searches for the major search engines was estimated at between 3,500 and 5,000 per day, for the period immediately following the announcement of the recall. For purposes of very broad illustration, let’s try to assign value from a competitor’s perspective (i.e., a law firm).

It has been estimated that of all Internet traffic, between 10 and 20% comes to Web sites from type-in traffic, or direct navigation methods. Some industry insiders peg the percentage at a lower, conservative rate, near 6%. Using the 6% figure, we can assume conservatively that, on average, the peanutbutterrecall.com Web site could have generated approximately 200 visits per day via direct navigation: 3,500 daily searches times a 6% direct traffic modifier. Using that daily average (200 visits/day), we see that the number of direct navigation visitors in a 30-day period of time would equal approximately 6,000.

According to one Texas-based law firm involved in prosecuting salmonella-related cases, at least 1% to 2% of all claimants who apply to their firm are accepted for representation. Regarding monetary compensation, the firm stated that a single claimant could be awarded a settlement of between “4- and 7-figures” in cases like these. Therefore, if we assume that approximately one-tenth of the direct navigation visitors apply (n=600), that would yield between six and 12 cases taken on by the firm for representation (1% - 2% of the 600 who applied).

The following is a very broad, basic, conservative model, and makes some major assumptions which may or may not hold true for this case. However, we present it as a starting point for discussion. If we assume that a law firm had obtained the peanutbutterrecall.com domain name, then, based on conservative estimates above, we begin calculations for legal compensation with a pool of 6-12 clients. Assuming all claimants were awarded settlements, minimum payouts could range from between $6,000 and $12,000 (4-figures compensation at $1K/ client, at the low end), to between $6,000,000 and $12,000,000 (7-figure compensation at $1m/client) in aggregate payouts.

It is generally acknowledged that firms retain approximately 1/3 of awards to cover their fees. Calculating at the high ends of the ranges, then, a firm could have potentially earned between $1,800,000 and $3,600,000 depending on circumstances. These figures don’t take into considerations any applicants who may have been directed to the Web site via any online, or other advertising, using this URL, nor do they address visitors to the site who may have found it had search engine optimization techniques been applied when developing a Web site for the domain name. Nor do they take into consideration any type-in traffic that may have occurred beyond the 30-day window. Remember, that the domain was not in the aftermarket and was obtained for the registration fee.

In addition to realizing direct financial gain through compensation, a competitor would also have had advantage and control over content on the URL. While difficult to measure on the competitor side, this control begs more questions regarding intangible values related to branding, consumer loyalty, etc. for the product. Even with ConAgra maintaining control of the domain name, the company still executed a major campaign to regain lost market share. One could only speculate about any additional spending that may have been needed if ConAgra had not successfully registered the name.

Given the above data, therefore, many people could say that ConAgra made a very wise investment in their acquisition of this domain name. Now we will examine just how competitive the conditions were for this domain name at the time of its registration.

Competition to Register the Domain Name

To contextualize the competitive nature of this deo domain name registration, Penguin SES learned that shortly after the press releases of the voluntary peanut butter recall were published, lots of registration activity seems to have occurred. Our research revealed interest and activity by several other players for domain names with words from the phrase. A recent search of MSN for the key phrase “peanut butter recall” shows several organizations still using some or all of the keywords in either a primary URL or a folder name for this keyword combination.

A check of registration attempts for domain names that utilized the keywords in various combinations, reveals a good deal of activity, though some of these names have since expired. Of note: a few of the registrations are in clear violation of trademarks.

Drilling down a bit further, it was also not surprising that legal entities were among those who registered variations of this domain name. Some firms even seemed to be aware of the brandability of such a generic phrase and its viability of being used in promotion.

One such case is that of the domain name registered using dashes. Not only was this name registered, it was also promoted via a press release for the law firm which executed the registration. At present, the URL no longer resolves to a Web page. However, referencing an archived copy of the page from Feb 23, 2007, we learned that the site promoted information about the recall and offered visitors an opportunity to submit information via a web form to see if they had a valid claim. This URL shows another law firm reversing the word order and applying a single dash in the domain name

Some law firms with existing Web sites who did not register separate domain names took advantage of setting up a subdomain or using the keywords in naming a folder.


PART 1 | PART 2 | PART 3 | PART 4 | PART 5 | PART 6 | PART 7 |

Got a Killer Domain Name? Good. (Pt. 4)

Next Steps for End User Domain Name Registrations

In light of the above, it should now be clear that while many Internet domain names don’t accrue this kind of value, some do, or perhaps could. So, for the corporate client who’s looking to gain some defensive or offensive advantage, what steps should be taken when searching for a deo domain name?

First, monitor trends in your industries and stay on top of them. Plan in advance for contingencies. Set up internal protocols regarding domain name registrations, and establish procedures that go “outside” standard circumstances in order to move quickly when necessary.

Also, learn more about acquiring domain names. Learn about online domain name sales outlets and domain registrars: how they work, and what’s needed to get a domain in each system. Some companies that register domain names also assist sellers in selling and buyers in buying them. Some of these registrars have “brokers” available, like a real estate broker, to help interested parties locate and obtain names.

In addition, in recent years, live domain name auctions have been put together to help facilitate transactions in a “face-to-face” environment (though some of these events also now allow “cyber-bidding”). There are several online auction platforms where domain names are sold through a limited-schedule auction. Finally, some buyers and sellers contact each other directly to initiate discussion about a transaction.

If ConAgra had not procured the peanutbutterrecall.com name in an initial registration, even if the domain name were available in the “aftermarket,” (which it may not have been), the selling price would likely have been much higher than the registration fee ConAgra paid, and the acquisition process would have been more complicated.

Expert Domain Name Commentary and Discussion

As you can see, when considering the scope of a recall or other very public scenario, including new product launches, etc., the magnitude of the situation can quickly outpace conventional discussions of domain name earnings and monetization opportunities. Having explored the facts of the voluntary peanut butter recall, we now wish to discuss more broadly the deeper value issues.

It is easy to make the case that ConAgra was wise to have registered this domain name for the cost of a basic domain registration for their registrar. But what if this domain had been on the aftermarket? What kind of price would have been found to be “acceptable” to a company who perceived the deeper values associated with the domain name and would have still allowed the decision to be called a wise one?

As for a domain owner who may have had this name in his or her portfolio, what selling price would have been put forward, and how would the owner have arrived at such a price? At what price would the owner have been accused of selling out “too cheaply?” Again, it is beyond the scope of this article to answer specific value questions, but they should be asked.

However, in order to develop some depth of perspective on the matter, Penguin SES contacted a few Internet experts, including Brian A. Hall, attorney with Traverse Legal; Bill Hartzer, Search Engine Marketing Manager with Vizion Interactive; and Mark Stedelbauer, an ebusiness professional, to get their input concerning ConAgra’s domain name registration.

We also interviewed noted author and Wall Street Journal reporter David Kesmodel. Kesmodel was not able to comment directly on the specifics of the ConAgra situation because of potential conflicts of interest. He did, however, share general domain industry insights.

Domain Name Registration and Value

Brian Hall pointed out that, “the domain name market is a first-come-first-served market. Unless we are dealing with a case of cybersquatting,” he said, “the registration and use, or nonuse for that matter, is entirely within the purview of the domain registrant. That said, it is entirely possible that ConAgra made a strategic decision and procured this defensive registration in order to avoid bad press.”

Bill Hartzer said he thinks that overall, the domain name registration was a good move on ConAgra’s part, but he gives the company more benefit of the doubt when it comes to the issue of redirection. “I think it was a good idea for them to register that domain name. Not only was it a good decision, I suggest that other companies in a similar situation (e.g., a company that would be potentially subject to a recall at some point) should register domain names as a strategic offensive move,” Hartzer said.

Hartzer stated that companies have to be in a competitive mode when it comes to staying ahead of the curve. “As we can see, there were others who were looking to purchase similar domain names. There are other types of domains that a company should own, which includes domain names like companynamesucks.com and companynamestinks.com, and so forth. These are good public relations and reputation management moves for companies.” Hartzer added that when it came to redirecting the URL, “…most likely it was just the failure of the company’s IT department to redirect it. I wouldn’t look too much more into that. Certainly it would have been a good move to redirect that domain name with a 301 Permanent Redirect to the section of their site that talks about recalls.”

From an archival and historical perspective, Hartzer pointed out that there are benefits of using the redirect method as compared to developing a separate site. “As for actually using the domain name, I would have recommended that it only be used as a redirect and content not be put up on the domain name. This way, for SEO value and other reputation management purposes the links from media and other references would go to the company’s web site and not that domain name.”

Stedelbauer, on the other hand, saw the registration and non-use as more intentional. “It would be my conclusion that ConAgra registered the domain as a defensive measure to ensure know one else could use the domain against ConAgra. While no one would criticize the rights of a company to offensively and defensively protect itself and its interests, the question becomes - when is it ok to pull such defensive maneuvers as this, and when, if ever, is it not ok?”

On the topic of defensive and offensive registrations of generic domain names, David Kesmodel shared that this practice has been around for quite some time, and that can sometimes be hard to tell who’s playing defense and who’s playing offence. One example that Kesmodel cited are the “sucks sites.” He said that companies got wise about people registering “xyzcorpsucks.com” in order to use such names with negative comments about the company involved. “So, some companies have gone out and registered a lot of negative terms around their products that relate to their product or their business.” Kesmodel said that it is even common practice for presidential contenders to initiate this kind of defensive registration.

He added, however, that, “…often it’s not clear if the registration is defensive or not. One example, was in the mid ‘90s. Proctor and Gamble, the multinational consumer products giant acquired hundreds of names that other people may have gotten…. The reason for getting those was to gain a market advantage, but it’s not clear that they were worried about it from a defensive perspective,” Kesmodel noted that P&G’s position appeared to be more offensive.

Kesmodel said that in general recall situation there are advantages to having a related recall domain name. “It’s a way of controlling the message that the particular company wants to make. If you’re a company that is having to recall products you sold to consumers, getting a name like that -- well, for one thing, it could be a way to get people to go to your site … and get the info they need to make the recall work effectively,” he said. “So, if you’re a company that’s had a recall, and consumers are confused… it might be easier for your company to have a dedicated Web site for that, and maybe link to that Web site from your own, main corporate Web site,” he said.

PART 1 | PART 2 | PART 3 | PART 4 | PART 5 | PART 6 | PART 7 |

Got a Killer Domain Name? Good. (Pt. 5)

“Another reason to do it if you’re a company that’s in a recall situation, could be … [as part of a ] defensive strategy to limit negative publicity.” Kesmodel explained. “Let’s say you’re a producer and the recall … is of major, negative consequences for your business. You might want to just minimize the negative publicity by registering a name like that, especially if you’re concerned that there are consumers or advocacy groups that would use such a site to criticize your company, or generate some kind of negative publicity about your company,” Kesmodel added.

When it comes to the issue of potential value that ConAgra may have received (tangible and intangible), Hartzer and Hall both acknowledge the company did benefit. Hartzer focused on the protective advantages obtained. “By keeping the domain name out of the hands of others, I believe the company received a lot of great value: stopping others from setting up a web site that would include potentially damaging information is almost priceless,” Hartzer said.

Hall, on the other hand, commented on the single domain registration in the context of a broader corporate effort. “[The value] is nearly impossible to determine. Assuming ConAgra did register this domain name in an effort to avoid bad press, they did not suppress any information, but rather simply limited one means through which that information could be disseminated. Numerous other mediums covered the story and other domain name variations were registered and provided information. At best, ConAgra limited one particular, and very specific at that, medium through which someone could publicize the issue and even market services in connection therewith, as a law firm tried to do.”

Potential Downsides to Not Using the Domain Name

There was also a difference of opinion as to the potential downsides of registering, but not utilizing the domain name. According to Hartzer, keeping the name disconnected may have helped ConAgra, while putting minimal strain on consumers. “I do not see a lot of negative effects on the lack of redirecting the domain name. It might have benefited some consumers if the domain name was redirected; but redirecting it could have also allowed the media to link to and publicize that domain name, which would have then been directly connected to the company.”

Hall, however, stated that this strategy left questions unanswered. “By not putting up an informational website or redirecting it to their own official website, ConAgra has opened the door to speculation. In fact, the main question that now exists is did ConAgra register the domain name in an effort to limit bad press and make it more difficult for those affected to gather information or legal representation for the suspected contamination. Doing so is within their rights.”

Stedelbauer agreed that the move on ConAgra’s part not to redirect or develop the name in some way did raise suspicions. He stated that this action could cause some people to think the company had buried the domain after quickly registering it. “What may have been a more strategic play would have been to post basic information under the domain about the recall. By ensuring the domain did not fall into the hands of aggressive lawyers the main job was done. Then being able to control what was on the page and repeat the basic recall details, ConAgra would have avoided, had they even begun to experience any of it, appearing underhanded, and could have even pointed out their public interest by posting a special domain, had it become necessary to do that.”

Branding and Value Concerns

Stedelbauer, Hartzer and Hall agreed that the impact of the domain name not resolving to any Web page seemed to have little impact on the brand for Internet visitors who may have tried navigating directly, assuming that there was no direct association between the URL and the company who registered it.

“Many people who ‘type in’ domain names do not take the time to look up who owns that domain name,” Hartzer said. “So, making sure that there was not anything on the domain name might have been a good strategic move by the company,” Hartzer said.

Hall added some clarification. “An Internet user who uses direct navigation and ends up at a nonexistent website is likely to use a search engine to find what they expected to find from their direct navigation. I find it hard to believe that a user will give up after arriving at a nonexistent page. Rather, I foresee a search being done in an effort to get the information he/she thought to have been available via a website at the directly navigated to domain.”

Still, one could argue that direct navigation visitors who could not access a Web site could have been exposed to more adverse messaging when they went to conduct a search, since, as discussed earlier, both PPC and SEO efforts were underway on the part of competitors for the targeted search phrase.

When it came to the issue of domain name ownership, the experts also stated that ownership of deo domain names could greatly benefit companies who chose to invest in them. “There is a great deal of potential benefit - again, offensively and defensively,” Stedelbauer said. “Being able to control what is said, how it is said, when it is said, why it is said, is all PR/Communications 101.”

Hartzer agreed with Stedelbauer, but added that this value would, of course, fluctuate with the company’s relationship to the domain keywords. He added that there was plenty of room for growth for companies wanting to adopt more deo domain names. “In my opinion, not enough companies use ‘generic’ domain names,” Hartzer said. “They do not see the value in owning a generic domain name, one that contains their major keywords phrases (keyword phrases that people search for every day). There have been a lot of companies who have benefited a lot from the generic names; but still, more need to realize the value of these names and the effect it has on their business.”

Hall said that he believed in the inherent value of these deo domain names. “Generic domain names have intrinsic value,” Hall said. “The broader the possible uses and the more attractive the domain to a wider audience, the better. Domainers who make a living, or at least supplemental income, by registering and monetizing generic domain names tend to want domains like this in their portfolio. A company that chooses to register generic domain names that are relevant to its products or services can save themselves from having to purchase the domain names in the future. Moreover, it is common for companies to use generic domains for marketing campaigns or other advertising purposes.”

Use of Separate Domains for Specific Information

When asked about ConAgra’s use of the peanut butter recall domain name, and then asked to compare that use with two other sites which are currently involved in product settlements, www.petfoodsettlement.com (Menu Foods) & www.recalledpetfoodsettlement.com (Diamond Pet Food), the experts didn’t reach consensus. Penguin SES believes that may be because, in situations like this corporations need to provide information easily and accurately, and at the same time maintain a healthy distance between the issue of the moment and the long-term focus of the organization. [Note: Penguin SES has not studied either of these two sites in any detail. We merely presented them as Web sites that had information relating to a producing company of a product, and the URLs were composed of keywords that matched the product and the issue, in this case settlement vs. recall.]

Stedelbauer thought creating a separate site achieved a good balance. “This makes good business sense to me - the company shows itself to be proactive in addressing the situation, deflects all discussion of the topic away from the main brand sites, and controls what appears on those pages.”

Hall said that this type of strategy had definite benefits. “Having a domain name dedicated to a particular issue allows some separation for the company. Users are less likely to search the archives of a company’s official website to find out that there have been problems with their products. Moreover, the everyday user who is not visiting the site for information about the contamination or other problem will not be exposed to the issue,” he said. However, Hall also pointed out that the strategy is not without its own set of risks. “This obviously raises ethical concerns, but it is not illegal. Companies have made a calculated decision to direct consumers to a loosely affiliated site where the facts can be presented without ‘staining,’ so to speak, the brand anymore than necessary.”

Hartzer agreed that the name would benefit from being used. But he highlighted the issues of ease of management and Internet archiving, advising companies to use a redirect instead of building out pages on the URL.

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Got a Killer Domain Name? Good. (Pt. 6)

“I would generally recommend, from an SEO and reputation management perspective, that these domain names be redirected to a page on the main company’s web site,” Hartzer said. “This way links and any other mentions of the company made by others are directed towards the main company web site, and not another web site.”

Kesmodel mentioned that user behavior is a bit difficult to predict, and that some newer browsers don’t necessarily take a user to a specific page if he or she doesn’t type in the keyword string as a single entry and add the .com. He pondered the process the Internet user would go through and then shared his own method for obtaining the necessary information.

When asked about the case of recalls where consumers may be aware of the class or category of product, but not the actual brands, Kesmodel commented that he thought some people would just type right into a browser. However, he explained his thinking on the topic this way. “Let’s say you were a consumer affected by that spinach recalled from a couple of years ago…. If that was me, and I know I’d eaten a bunch of spinach, I probably would have just typed the words ‘spinach recall’ into Google, myself. [But], there are some people who would have gone into the browser, and typed ‘spinach recall’ and maybe their browser would have automatically referred them to a specific site related to spinach recall.”

The “Get It” Factor: Outsiders

Stedelbauer believes that the larger a company is, the more aware they are of the benefits of registering/purchasing and using deo domain names. However, he wonders if these same firms have solid action plans in place to actually acquire and develop them.

Kesmodel stated that companies seem to be much more aware of the value of domain name assets than they were 10 years ago. “I think a lot of companies do get it now,” he said. But, Kesmodel added, “companies were slow in the mid to late ‘90s to recognize the value of a good domain name…. there are a lot of examples of companies in the last few years that are using domain names effectively to market themselves, or sending people to a generic domain name from their ads (print or TV).”

Still, even the biggest and best of corporate America have to keep a quick pace with the domain industry, for fear of losing the advantage. “I will say… generally speaking, a lot of companies and their lawyers are outsmarted by all these entrepreneurs that deal on a daily basis with domains.” Kesmodel explained that sometimes it comes down to the numbers. “If you’re a big corporation with a lot of issues, you might have one or two people that deal with domains, but you might have a hard time going up against some of these companies that, that’s all they do is focus on the domain name market.”

He also raised the issue of a paradigm shift that still needs to take place in some corner offices and boardrooms. Kesmodel commented on how there is a need to include additional domain strategies in a company’s overall Web marketing efforts. “A lot of companies still think they can largely drive traffic through having their corporate name (Web site, the domain affiliated with their corporate name and brands) use paid search, or display ads on the Web to drive traffic to their sites.” Kesmodel said that this is simply trying to drive traffic through regular, traditional marketing channels and doesn’t take advantage of the dynamics of mini-site and direct navigation practices.

Hall said that investing in domain names is almost always a good idea, for a variety of reasons. “Companies should invest in domain names like they invest in other assets. In fact, the possible return on investment for domains, which can be purchased for $10 with some Registrars, is far in excess [of] nearly any other kind of investment today. Domain names incorporating all of a company’s trademark should be purchased; companies must police the registration and use of domains that incorporate their trademarks, and the use of generic domain name should be understood.” Hall described the discrepancy between the corporate mentality and the growing domain industry as one of ignorance that could and should be addressed.

“It is not that those outside the domaining industry are stupid,” Hall said. “Rather, they are simply uneducated when it comes to the domain name market, domaining, and domain name law. Domain names are valuable intellectual property and extremely powerful marketing tools. Not having them can be costly to a business, whether it be lost traffic, diverted customers, or some other undesirable effect.”

The “Get It” Factor: Insiders

On the seller’s side, both Kesmodel and Hall believe that value is not always easy to pin down. Hall said that he feels that domain investors, for the most part, are up to speed on generic domain names. Kesmodel acknowledged that the playing field is not exactly level for all types of sellers.

“I think there are definitely people who sell their names for less than … those names could [sell for],” said Kesmodel, “if they were a little more cognizant of the marketplace.” He added that sellers don’t just have to be educated for end user sales. “There are cases where really experienced domain investors will approach a domain owner and make an offer for a name, and the owner thinks, ‘Well, that’s a great offer, man.… and no one’s ever offered to buy my name.’ And there are naïve people who will sell at that price,” he said.

Kesmodel said that one of the reasons for this situation is that there are millions of names out there and it’s not a very liquid market. “They aren’t changing hands the way stocks and bonds do, so potential sellers, when they get interested buyers flocking to them [can] find it a little bewildering, and they’re not necessarily well-experienced to handle that,” Kesmodel added.

“And, I think sometimes, too, if they haven’t had an offer for five or ten years, and suddenly they have it, their thinking may be, ‘Well, I better take this opportunity while I can.’ There’s also a lot of arguments about the dollar value of specific domains. Some names will sell for millions of dollars, and people are baffled; other names that people think might be worth more than those sell for $100,000 or less.“

According to Kesmodel, the wide fluctuations in pricing domain names results from buyers having different views on what they can do and how much money they can make with a name. “Someone may be willing to spend more for a particular domain than anyone else because that name has particular value to that buyer,” he said. “Maybe they run a business that they’re going to start up and no one’s ever heard of, it’s a stealth business, a new industry, but that name has a lot of value to them, and eventually, people realize why they got it, why the wanted to buy that particular name.”

Hall said that those inside the industry generally have a better understanding of pricing and yield than typical end users. “Domainers in general are educated about their industry. They understand the value of generic domain names and look to register them, monetize them, and capitalize from a sale where possible.”

While understanding that the price of domain names is driven by market forces of supply and demand, Hall explained that there are some basic parameters help buyers ascribe value. “While there can be subtle variations to a domain, domains are much like real property in that they are unique with attractors and detractors that can affect price. However, short, east-to-remember, generic domains in the .com TLD remain the most valuable. Again, the more educated you are about domain names and their value, the better chance you have of selling high or purchasing low.”


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Got a Killer Domain Name? Good. (Pt. 7)

Hall also said that buyers both inside and outside the domain investment community could learn a few things from the ConAgra registration. “Above all else, the domain market follows the news. If news is groundbreaking, you can count on the domain names corresponding to that news being registered. Companies need to recognize this and have a plan regarding registrations,” he said


“Regardless of the underlying reason, ConAgra registered a valuable, generic domain name. In doing so, they likely prevented one medium through which consumers would hear about the bad press concerning contamination. They also purchased intellectual property that has value in and of itself. It was a win-win for them at the time, and in the future, the value may increase if they wish to provide information regarding another recall or about something else.”

Hartzer reiterated that he thought the ConAgra registration was a good one. “ConAgra was very smart to register that domain name once they had information that allowed them to make the decision to buy it. However, I might have actually redirected it to the company web site,” he said.

A Final Thought

The domain name industry, especially the aftermarket, is an extremely competitive world. And, as more companies use domain names that are beyond their corporate brand structures, they push an envelope that allows them to sometimes gain market advantage. At the same time may also be tipping their hand concerning strategy.

Kesmodel said that’s what makes this industry so appealing to write about. “Companies think of all kinds of things related to domains. It’s not too surprising to see a lot of different permutations of domain registrations by all sorts of entities. That’s to me, what makes it an exciting area to look at, because domain registrations say a lot about the people behind them, and the companies behind them,” Kesmodel said. “In many ways, they convey messages and strategies.” This perspective points out that there are strategic benefits to knowing what domain names competitors are registering and what audiences their Web sites were attracting.

Hall urged companies and organizations who were considering a new domain to be very proactive. “If a company’s marketing department is moving forward with an advertisement campaign assuming they will be able to get the domain name or purchase it for pennies, they need to think again. First-come-first-served still rules. Companies should play it safe and register domain names that correspond to their trademark, their ideas, their marketing campaigns, etc. Proactive registrations will always save time, effort, and money,” he said. “The domain aftermarket is competitive and costly. Think ahead and consult with those who have done it before if need be, but be sure you are first.”

Concerning the benefit of advance planning, Hartzer related the costs of this kind of planning to the ultimate benefit. “A domain name does not cost much; not registering the domain name can cost you a lot more in the long run.”

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New Sites - Developed for Domain Investors: Examples using WhyPark.com

Quick entry: We're still working on what we think will be a big article for publication on Monday, right before the TRAFFIC conference. And we've gotten some great feedback that may be of interest to both domainer-types as well as those in corporate America.

But, wanted to update you all with the development project using WhyPark.com - we've been working hard to get our sites spec'd out, and keywords chosen as well as possible.
Here's the first round of sites to put out for view. Links are the keywords we're targeting:

automotive
beef recall
cigar cutters
conference call services
cordless laser mouse
digital tv converters
folding bicycles
forex
forex trading
ground beef recall
hedge funds
hpv testing
melamine
pet food recall
subnotebooks
tv converter boxes
type 1 diabetes
wireless controllers

And this one in ear headphones was developed by aeiou.com and is included in the Rick Latona Live Domain Auction in Australia on November 20, 2008.

Generic Domain - Defensive & Proactive Strategies

Currently working on what we feel is a BIG story that relates to generic domain names. Specifically, the registration of the name peanutbutterrecall.com.

If you visit this name, you may find that it doesn't go anywhere.

So, who owns it? And how is it related to the whole the peanut butter recall issue?

There was quite a bit of news about this major recall.

Stay tuned. We know it's been a while since we posted. We were tracking domain name appraisal values, and trying to validate our system for getting some initial values for domain names by benchmarking sales from the live domain name auctions. We plan to get back to that, but this issues has been taking most of our attention during the past few months.