Recently the mainstream media has been running profiles on people who have built businesses worth hundreds of millions of dollars by buying lots of Internet domain names then filling them with Google ads. Last week, CNN Money ran an article entitled The man who owns the Internet which contained the following excerpt

When Ham wants a domain, he leans over and quietly instructs an associate to bid on his behalf. He likes wedding names, so his guy lifts the white paddle and snags for $10,000. is not nearly as good as the plural, but Ham grabs it anyway, for $350,000. Ham is a devout Christian, and he spends $31,000 to add to his collection, which already includes and When it's all over, Ham strolls to the table near the exit and writes a check for $650,000. It's a cheap afternoon.
Trained as a family doctor, he put off medicine after discovering the riches of the Web. Since 2000 he has quietly cobbled together a portfolio of some 300,000 domains that, combined with several other ventures, generate an estimated $70 million a year in revenue. (Like all his financial details, Ham would neither confirm nor deny this figure.)
And what few people know is that he's also the man behind the domain world's latest scheme: profiting from traffic generated by the millions of people who mistakenly type ".cm" instead of ".com" at the end of a domain name. Try it with almost any name you can think of --,, even -- and you'll land on a page called, a site filled with ads served up by Yahoo

The New York Times has a profile on another multimillion dollar company in the same business in today's article entitled Millions of Addresses and Thousands of Sites, All Leading to One which contains the following excerpts

What Internet business has raised $120 million in financing in the last year, owns 725,000 Web sites, and has as its chief executive the former head of Primedia and International Data Group? If you guessed NameMedia, a privately held owner and developer of Web sites based in Waltham, Mass., you take the prize.
“What we’ve wanted to do, quietly, is amass the largest real estate position on the Internet, which we feel we have,” Mr. Conlin said. Some of those properties, he said, are the equivalent of “oceanfront” sites, or high-value addresses like or that NameMedia will populate with relevant editorial content. Those who type in any of NameMedia’s other 6,000 or so photography-related Internet addresses, like, will land on
So far the company’s strategy is paying off, Mr. Conlin said, with company revenue doubling last year, to $60 million.

Companies like this are bad for the Internet for several reasons. For one, they artificially reduce the pool of domain which has resulted in legitimate domains having to choose name that are either awful misspellings or sound like they were stolen from Star Wars. Secondly, a lot of these sites tend to clog up search results especially when they have generic domain names and a couple thousand sites all linking or redirecting back to one domain. Finally, the fact that these companies are making so much money in a manner that is user-hostile and ethically questionable encourages more such businesses which prey on naive Internet users to be formed.

What I've found most shocking about this trend is that the big Web advertising companies like Google go out of their way to court these businesses. In fact, Google has a service called Google AdSense for Domains [with the tastefully chosen URL] which caters exclusively to these kinds of sites.

One of the things I've disliked about the rush towards advertising based business models on the Web is that if unchecked it leads to user-hostile behavior in the quest to satisfy the bottom line. The recent flap over Google and Dell installing the equivalent of spyware on new PCs to show users ads when they make a typo when browsing the Web is an example of this negative trend. Now it turns out that Google is in bed with domain name squatters. These are all examples of Google's Strategy Tax, the fact that they make their money from ads compromises their integrity when there is a conflict between between doing what's best for users and doing what's best for advertisers.

Do no evil. It's now Search, Ads and Apps


Tuesday, May 29, 2007 2:21:46 AM (GMT Daylight Time, UTC+01:00)
Google recently announced it's going after such made-for-adsense(MFA) sites. Let's see if it has much tangible impact on this weird but rich industry.

Tuesday, May 29, 2007 3:24:51 AM (GMT Daylight Time, UTC+01:00)
Dare, I have no idea how you missed this, but Google at least is doing its part to improve the web by
a) Purging ads from sites with no content:
b) Tracking malware and virus-infested sites, and possibly entering the security software market:
Tuesday, May 29, 2007 5:12:56 AM (GMT Daylight Time, UTC+01:00)
I believe Google is going after "Made for AdSense for Content" sites that have no content. By definition, a parked domain has no content. These "Made for AdSense for Domains" sites are likely exempt from the latest Google crackdown. Ironic, isn't it? I have no problem with domainers monetizing their sites via PPC ads. However, it should be clear to PPC advertisers what they're buying.

Google's PPC ad distribution choices of "search network" and "content network" imply search advertising and contextual advertising. AdSense for Domains applies to neither. On the AdWords side, Google needs to create a "domain network" choice. That's a solution that the search marketing community has been arguing for since at least 2005. Last year, click fraud was a big topic. This year, as domaining garners attention, perhaps Google (and Yahoo!) will be forced to address this PPC ad distribution fraud. It's more of a concern than click fraud, IMHO.
Tuesday, May 29, 2007 9:15:56 PM (GMT Daylight Time, UTC+01:00)
How is it evil or fraud if you make a typo, get served for related ads, and then choose to click one of those ads? It seems the same to me as driving to the wrong address, seeing a nearby retailer that meets your need, and going there instead of your original intended destination. As long as the retailer plays fair (like, not striking a deal with the mapping service to intentionally mislead people), what's wrong it?

And by what other mechanism would you recommend these domain names be sold? I'd prefer that an open market set their prices than under-the-table deals.

Domains are liquid, just like real estate or options or futures. You can buy the domains (or land or options or futures) with the sole intent of selling them again in the future -- possibly to someone else just like you, or possibly to someone who intends to use them for their "intended" purpose. It's a market, just like any other.

The media has seized on this topic because the domain market happens to be good right now and a handful of people are getting rich for doing seemingly no "real" work (yeah, right!) but completely ignoring the many people who have lost a lot on the domain market and its inevitable downturns. Meh.

Anyway, society tolerates a lot of worse businesses. Like money lenders who prey on the poor (check cashing, high-interest credit cards, etc.). Even the AARP warns about this one:
and yet these highly questionable businesses show no signs of going bankrupt any time soon.
Tuesday, May 29, 2007 9:51:22 PM (GMT Daylight Time, UTC+01:00)
Sounds like sour grapes to me. If there is a way to make money, people will flock to it. And I never fat-ginger a URL. ;o)
Wednesday, May 30, 2007 12:52:04 AM (GMT Daylight Time, UTC+01:00)
I had a short E-mail conversation with Vint Cerf after reading this post. It seems that Google's motto of "Do No Evil" has changed to "It's Not Illegal", at least for Vint:

Steve, as chairman of icann, I have to follow icann rules and at present there is no policy against domaining. V

----- Original Message -----
From: Steve
To: Vint Cerf
Sent: Tue May 29 11:07:30 2007
Subject: RE: Question... from a former MCI employee

Wow, not the response I expected. What's the logical extension Google's business practices and advertising on the Internet in general? How long before all search results are vetted by an advertising engine? How long before 95% of the domain names on the Internet are just redirectors to ad filled pages? What will the Internet look like in 5 or 10 years? I'm picturing a Walmart flyer... I long for the days when you actually had to provide network services to get a .net name. ;)

Anyway, thanks for your time,


-----Original Message-----
From: Vint Cerf
Sent: Tuesday, May 29, 2007 11:00 AM
To: Steve; Vint Cerf
Subject: Re: Question... from a former MCI employee

I am not a big fan of domaining but it isn't illegal. V

----- Original Message -----
From: Steve
To: Vint Cerf
Sent: Tue May 29 07:29:05 2007
Subject: Question... from a former MCI employee

Hi Vint,

You probably don't remember me, I worked at MCI's Web Hosting center in Pentagon City (I worked in the DNS group) and we met a few times and exchanged a few emails about domain names and tld's. Now that you're at Google, I was just wondering what you think about people buying hundreds of thousands of domains and redirecting people to spam filled pages of ads served by Google and Yahoo. I don't think someone owning 700,000 domains and redirecting them all to static pages full of Google ads, or redirecting every nonexistent .cm domain name to a page filled with Google ads is exactly helpful to Internet users in general. Why is Google providing a service specifically for bottom feeders like that?

Wednesday, May 30, 2007 2:21:02 AM (GMT Daylight Time, UTC+01:00)

Regardless of your feelings on this issue (or mine), I think it was downright rude for you to publish a private e-mail exchange. I hope you'll think twice about that in the future. It's not only a jerky thing to do, but -- on the whole -- really stifles frank and open conversations in the future ("gee, I have to really watch my words, because this guy may publish our private chat for all to see")

If you got permission from Vint to post that conversation and just didn't indicate it, my apologies for jumping to conclusions. Otherwise, I think an apology to Vint is in order.

DISCLAIMER: I work for Google, but do not speak for Vint, nor do I have anything to do with AdSense.
Wednesday, May 30, 2007 5:45:38 AM (GMT Daylight Time, UTC+01:00)
I'll let Vint speak for me: It's not illegal

Vint's email included no disclaimers. The Internet is just a big grey area now, if it's not illegal it's ok.

Go ahead and try to defend the real world use of Google's domain park service...

Google continues to move toward the black list.
Wednesday, May 30, 2007 12:40:38 PM (GMT Daylight Time, UTC+01:00)
I agree with Adam's sentiments, but I think many people (and especially Vint Cerf) have learned that everything they write online may be broadcast to the whole world -- not just through the web, but also TV, radio, etc. -- and your message will be badly mangled along the way. In this environment, only the simplest, clearest messages survive relatively intact.

Engineers are too trusting, and the result is often brittle systems that can't handle failure or exploitation.

[Ahh the good ole days, before any company presence -- or money -- could be found online.]
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