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Fairwinds Says Typosquatting Costs $327 million, Based on $2.74 Per Click

June 23, 2010CADNA, Domaining, Domainnamewire, fairwinds, Policy & LawComments Off on Fairwinds Says Typosquatting Costs $327 million, Based on $2.74 Per Click

Report makes some lofty estimates for typosquatting.

Fairwinds Partners, the group behind Coalition Against Domain Name Abuse, released a study today suggesting that typosquatting costs the 250 most visited web sites $327 million per year.

Like the creators of many studies, Fairwinds has something to sell — services to the very brands that are affected by typosquatting. There are a number of assumptions in Fairwinds’ report, and also a lot of references to its on research on click-through rates and such. But there’s one number used in the report that grossly overstates the final number.

To calculate the average pay-per-click costs charged to advertisers receiving clicks from typos of their domains, the company used a whopping $2.74 per click. It cites VeriSign’s June 2008 domain name industry brief as the source of this amount. I looked through that report and didn’t find any mention of PPC prices. But ask anyone who owns parked domains and they’ll tell you this is a far cry from what is being earned, and advertisers will tell you it’s a lot more than what they’re paying. Back around the time of VeriSign’s June 2008 report, Efficient Frontier reported its clients were paying an average CPC of 32 cents for content and 65 cents for search (January 2008). With “smart pricing”, domain clicks can be even lower. I’ve found a number of estimates of PPC prices, and none of them come anywhere close to $2.74.

If you assume that the average CPC is actually 35 cents, that lops over $150 million off of Fairwinds’ estimates.

And the average click price is probably lower for the domains in the study when you consider which sites Fairwinds says get the most traffic. Typos of MySpace, YouTube, Facebook, and Google, result in pennies clicks at best.

I’ve reached out to Fairwinds to ask them about the $2.74 click price. But regardless of how they justify it, just keep in mind that studies like this are usually undertaken by people with an agenda, and they’ll make estimates that help their cause. Yes, typosquatting is a problem, but not nearly as big as Fairwinds is making it out to be.


© DomainNameWire.com 2010.

Review and rate domain name parking companies at Parking Judge.

Related posts:

  1. Report: Google May Earn $497 Million a Year from Typosquatting
  2. Will Cost Per Action Replace Cost Per Click?
  3. Pay-per-click fraud: how it affects the domain name industry

IP Constituency Distances Itself from CADNA

November 6, 2009CADNA, Domaining, Domainnamewire, icann, ip constituency, Policy & LawComments Off on IP Constituency Distances Itself from CADNA

Letter insinuates that CADNA does not take a balanced approach to intellectual property rights.

The ICANN IP Constituency is distancing itself from the Coalition Against Domain Name Abuse (CADNA).

In a letter to ICANN CEO Rod Beckstrom, J. Scott Evans, President of the Intellectual Property Constituency, referred to a recent discussion in which CADNA was referred to as being a member of the constituency.

During our presentation, Mike Silba made a reference to the recent Congressional hearings held on new gTLDs. Specifically, Mike stated that “one of your members” had instigated these hearings and was the only party to file negative comments on the Affirmation of Commitments that ICANN recently signed with the U.S. Department of Commerce. Later that same day, Nick Wood, a representative of IPC member Marques, quered Mike about his comment. Mike explained that he was referring to the Coalition Against Domain Name Abuse (CADNA) in his comments during the IPC meeting.

I want to clarifiy for the record that CADNA is not now nor has it ever been a member of the IPC. Additionally, I want you and the rest of the Board to know that Yahoo! resigned from CADNA in January 2008, shortly after I joined the company. The IPC has historically worked very hard to present a balanced view of IP protection in the DNS and, for this reason, I felt compelled to correct the public record and to ensure that the other Board members present at the meeting receive this information.

Note the explanation for how the IP constituency is different from CADNA: it tries to take a balanced approach. Apparently CADNA does not.


© DomainNameWire.com 2009.

Review and rate domain name parking companies at Parking Judge.

Related posts:

  1. Nike and Wells Fargo Join CADNA
  2. Three Questions for CADNA
  3. CADNA Steps up Assault on Domain Name Owners

Hypocrisy.com: How America’s Big Companies are the Biggest Cybersquatters

September 17, 2009CADNA, Cybersquatting, Domaining, Domainnamewire, erorr redirect, Policy & Law, TyposquattingComments Off on Hypocrisy.com: How America’s Big Companies are the Biggest Cybersquatters

A look at how big companies have joined forces to cybersquat and how they justify it.

In May 2007, I noticed something curious on a new Gateway desktop computer I purchased. When I mistyped a web address, my browser showed a page full of ads.

That’s nothing new. But who profited from the page was. It wasn’t some small fry cybersquatter. It was Gateway.

I later found out that Dell did the same thing. Both computer manufacturers had teamed up with search companies to show a page of links when someone typed in a non-existent domain name.

Shortly thereafter, internet service providers such as Verizon, Time Warner, and later Comcast jumped on the bandwagon and started similar schemes.

There’s only one reason these companies do this: money. They earn money every time someone clicks on a paid link on one of these error pages. But almost all of the companies masquerade error redirect pages as a “service” for their customers.

What’s perplexing is that many of the companies that use error services, including Verizon and Dell, are members of Coalition Against Domain Name Abuse (CADNA). CADNA seeks to stamp out cybersquatting. Yet Verizon and Dell essentially typosquat on fellow members.

To understand how particularly egregious these company’s activities are, consider that almost all of the typos they serve ads on are of existing sites — essentially, trademarks. They aren’t of generic domains, which is a large part of traditional domain name parking. After all, when was the last time you typed in a generic domain name and it wasn’t already registered? Because all of the generic web addresses are registered, it’s clear that the typos these companies are serving up are mostly trademarks.

Earlier this year I interviewed Verizon Vice President and Associate General Counsel Sarah Deutsch about new top level domain names. Although I didn’t include it in my original story, I asked Deutsch about these error pages. She explained that they were very different from domain parking. Among her reasons:

1. If you typo a domain, the first thing you see on the page is a link “did you mean to go to realdomain.com…”

2. You can opt-out, which you can’t do of domain parking

3. The pages show organic listings in addition to ads

Although not won over by her arguments, I let it rest. But recently I received some screenshots of just how Verizon’s error pages look. Here’s one for DomainNameWir.com (notice the missing ‘e’):

domainnamewir

Notice that most of the page is just ads. Where are the organic listings? They’re there, but they’re below the fold. It’s clear that the intent of this page is to get you to click on an ad. If it were to help you find the site you mistyped, the organic listings would be at the top of the page.

As for a suggestion of which web site you really meant to visit, apparently your web site needs to be bigger than just the 29,989th most trafficked site on the web to qualify.

To be fair, I’m sure Deutsch would rather her company not offer this service. Someone within these companies sees a money making opportunity, agrees to terms, and then forces it on the IT department to implement and deal with customers’ furor. I doubt the intellectual property attorney is consulted in the process; they just have to defend it when their company’s hypocrisy is called out.

Just how much revenue do companies earn from error redirects? It’s hard to tell. Google advertisers get a break out of how much traffic they get from error pages. In my experience, it’s dwarfed by the amount of parking traffic my campaigns get. And although Google reports the specific parked pages that served ads, it doesn’t show which error pages served up ads.

But the revenue is meaningful. Otherwise Google, Yahoo, and these companies wouldn’t put up with the kicking and screaming from their customers.

Note: hypocrisy.com is a real web site, unrelated to this article.


© DomainNameWire.com 2009.

Review and rate domain name parking companies at Parking Judge.

Related posts:

  1. Comcast Starts Typosquatting Domain Names
  2. Time Warner, Yahoo Team Up to Cybersquat
  3. Cease & Desist Sent to Domain Owner Based on Redirect Service