Andy Sweet

I was searching today for one of my recently launched mini-sites to see if it had been indexed yet and came across an interesting (at least to me) find. I found a Marchex domain ranking #1 in Google!

As many domainers know, Marchex is a big domain portfolio owner. Back in 2004, they bought Yun Ye (ultsearch ring any bells?) portfolio of more than 100,000 domains for around $155 million in cash and $9 million in stock. For a long time, they just continued to park those domains along with others they already owned or picked up along the way and earned their money monetizing off of direct navigation traffic or traffic from old links to a now-defunct site.

Marchex decided that they could make more money by providing some level of development as opposed to their old parking model. To do that, they acquired Open List in May 2006 for $13 million. The acquisition helped with content aggregation and allowed them to develop more robust sites on a large scale. The only reason I can imagine they would care to do that would be to get traffic from organic search.

By developing the sites, they reduce the number of monetizable actions the visitor can take. People go to sites looking for answers, either for specific question or general curiosities. Parked sites themselves do not provide any answers. They provide two options; forwards or back. If the parked page is properly optimized, the links people see will entice them to click forward to find their answer and that’s how parkers make money. Or the doesn’t think any of the links in front of them will answer their question and they back out and try another option. No money.

A developed site can actually answer the question or satisfy the curiosity without actually making any money. Why would a business want to do that? Well, that’s the trade many make when they want to get those juicy high organic rankings and traffic boosts.

Marchex went that route with their portfolio and it may have hurt their stock price. On May 5, 2006, MCHX was trading around 22 and today it’s 11.5. Other factors contributed to the decline, but there were many that criticized the strategic shift to development.

But today while searching for my site (which isn’t included yet), I came across one of their sites, detroitcontractjobs.com (search link)

So that works. Their traffic volume to their portfolio has to be way up but I wonder if the traffic increase makes up for the loss in revenues. If they can figure out how to monetize better, they’ll be golden.

And maybe they can get their stock back up to the $15 I paid for it long ago.

Filed under: Development, Domains