Changes ahead for Yahoo domain parking partners

No Comments Written by on September 12, 2009 – 5:04 pm

Yahoo Search Marketing to change its payout algorithms and stop doing business with some of its direct partners. Overall, lower revenues for Yahoo’s pay-per-click advertising partners are expected.

As has been reported by two blogs today, Domain Name Wire and Julia Mackenzie, Yahoo’s search marketing division is going through some changes that are likely to affect the bottom line of the company’s domain parking partners.

Yahoo (YHOO) already announced last month that it would change its payout algorithm, a change which will have a direct effect on the pay-per-click revenue that is generated through domain parking and that is paid out to Yahoo’s PPC partners. Rumor has it that the new algorithm will evaluate all clicks even more strictly based on the quality of the traffic sent to Yahoo’s advertisers. It might be that Yahoo is trying to increase the traffic quality of its search marketing network now that it will cooperate with Microsoft’s Bing for the monetization of its search traffic. Whether Microsoft (MSFT) made it a requirement that the traffic quality may not be below a certain level is not known. Anyway, this change will definitely lower the cost per click for most domains and hence result in lower total revenues for domain name owners. Domain Name Wire has been told by industry insiders that domain parking revenue is expected to decrease by as much as 12% on the average.

In another related blog post today, Julia Mackenzie spreads the rumor that Yahoo is also going to stop working with some of its direct domain parking partners if their traffic score is below 7 out of 10. The traffic score is Yahoo’s internal rating of traffic quality. This is a further step undertaken by Yahoo to improve the traffic quality of its network, and it will force some partners to go directly to Google (GOOG), if possible at all, or simply go to one of the many third-party domain parking providers like Sedo or Parked.com. Either way, they will probably suffer a severe loss in revenue.

Both Google and Yahoo have been working directly with holders of high-traffic domain portfolios to monetize their partners’ traffic, which usually is a win-win relationship because the domain portfolio owners do not have to share their revenues with a middleman. But now, as it seems, Yahoo is going to decrease the number of its direct partners. Julia also writes, however, that the company’s syndication partners (the big parking companies) will not be affected by this decision. That means that Yahoo and the syndication partners will be the winners here, while Yahoo’s smaller partners or at least those with lower-quality traffic will lose out.

Domain parking revenues have been on a decline for a long time now and, honestly, I have lost faith in revenues ever going back up again. It is more likely that either Google and Yahoo or the third-party parking providers will try to get an even bigger slice of the pie in the future. What are the alternatives for domain name owners? Developing domains and then using AdSense for monetization is no real option, because AdSense is controlled by Google, too. I guess direct advertising deals is the answer, but that’s material for another article.

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Changes ahead for Yahoo domain parking partners

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