In his post Elliot says in part:
“Yes, there is a BIG issue of them working within a “black box,” not sharing how they calculate revenue share and other information with domain owners. Most are anything but transparent when it comes to their operations, and they likely take a very large cut of revenue from our domain assets.”
That of course IS the issue.
When someone chats with a parking company about bringing business over to them, one of the first questions every domain holders ask is:
“What is the revenue share”?
That question is not only an important one.
Its a vital one
Its certainly the same question almost every business in any industry asks in before entering into any business relationship.
How much money will we make ?
What is our share or percentage?
What will this cost?
The same question gets asks and over against in every business transaction millions of times a day.
The answer has to be truthful.
In the domain business if a domain holder asks a parking company what is revenue share I will get from you, we have the right to get an accurate answer.
If a domain holder is told he will receive a revenue share of 80% for example, that means that the domain holder should receive $.80 out of the every dollar that parking company receives from its upstream partner.
We understand that parking companies won’t tell us the revenue share they have with the upstream partner, but the stated revenue share the parking company says we are getting, we must get.
Out of the parking companies share, they have to pay their overhead, offices, staff, and out of that share also comes advertising, marketing and sponsoring industry events.
As domainers we have to pay the costs of maintaining that domain name.
We also know that cost is going to rise 7% a year for 4 out of every 6 years from now on.
The carrying cost of the domain is borne 100% by the domain holder, none of it is the parking companies cost.
Also the domain holder has all risks of holding the domain, including lawsuits and UDRP defense.
None of that cost comes out the parking companies either.
Now IF Frank’s parking venture proves by in large to pay out more money to the domain holder’s than the domain holders received at the parking companies for the same domains and same traffic, then there will be only one conclusion, that parking companies are paying a smaller percent of the revenue they agreed to pay.
Lets say this one is too early to call.
But lets also be clear.
Lying is not an acceptable business practice.
Certainly not one that involves one of the fundamental representations that the business relationship is built on.
So IF the revenue domain holders receive from InternetTraffic.com winds up being substantially higher than the traditional parking companies for the same domains and the same traffic, then you bet I’m going to be highly critical of parking companies.
and I won’t be alone.