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The ultimate leech

January 24, 2007

Speaking of plantation owners, this tip from Slashdot led me to this post from Daily Domainer, which led me to this Business 2.0 interview with a gentleman named Richard Rosenblatt who made a boatload of dough by selling MySpace to Rupert Murdoch. Rosenblatt's latest idea, into which venture capitalists have already ploughed $220 million, is a little enterprise called Demand Media. Demand Media is in the process of doing a mashup between domain parking and social networking that is nothing if not devilishly brilliant.

After selling off MySpace, Rosenblatt read an article about how much money domain parking - buying a bunch of domain names that people arrive at accidentally and covering them with AdSense or other syndicated pay-per-click ads - throws off. That got his wheels turning:

"I thought, it can't be that easy," he recalls. "So I talked to some domainers, and they said, 'We own 300,000 domains, we make $20 million a year, we have just four employees and some servers in the Caymans.' I thought, 'If you can make that much doing nothing, what if we added some Web 2.0 sprinkle so that people would come back - user publishing tools, social networking? What if we built a platform where we could snap that into as many domains as we wanted?' That's when the lightning bolt hit me: You'd have a company that generates its own traffic, generates its own content, and monetizes itself. It would be the perfect lazy-man's media company!"

This business model weaves together so many strands of latter-day Internet commerce - massive scale, randomness, increasing returns, abundance, sharecropping, hypermediation, and automated monetization - it may, if the contraption actually works as planned, be the perfect Web 2.0 company, other than Google, of course. Assemble a bunch of "prosumers" by exploiting the navigational flaws of the Web, give them some cheap picks and shovels and let them create your product for you, and then set up an automatic harvesting machine to collect their money. Says Rosenblatt: "Someone has to do it!" Money talks, shame walks.

Comments

Well... from a website visitor's perspective, is it better to land on a parked domain littered with spammy ads? Or stumble upon a user generated content site that might be compelling enough for sign up for or return to? One of Demand Media's recent projects is http://www.channelme.tv/, which actually seems like a pretty good way to sell domain names and generate traffic.

On the other hand, the company does have eyebrow raising "sharecropping the longtail" ideas. Check out their ICANN presentation from last June about monetizing *unregistered* domain names:

http://www.icannwiki.org/LongTail_Domain_Proposal

Posted by: Isabel Wang [TypeKey Profile Page] at January 25, 2007 02:24 PM

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