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The Challenges of Creating a Marketplace

April 30,, bido, Domaining, Domainnamewire, root orange, UncategorizedComments Off on The Challenges of Creating a Marketplace

Creating a marketplace is tough, but the rewards are high.

One of the challenges new companies offering domain name services face is that of creating a market. It’s the age old question of the chicken and the egg. Which comes first, the supply or the demand? To get sellers you need buyers and vice versa.

This isn’t limited to domain marketplaces in terms of buying and selling domain names.

Starting a parking company. Consider the typical domain name parking company. First you need to get a contract with Google or Yahoo for an ad feed. To do this, you need to monetize a substantial inventory of domain names just to get a meeting. And the more domains, the better your payout from Google or Yahoo. But how can you get more people to park their domains with you when you are getting a lower cut from the ad provider, making it hard to compete with larger parking companies?

A typical solution for parking companies is for them to own their own substantial portfolio. A number of domain parking companies have sprung up thanks to the parking company’s own domain portfolios. One option for newer parking companies: offer a higher percentage of your cut to the domainer. Even if Google is paying you less because of your volume, you can come close to matching the revenue paid out by bigger companies. As you get more domains you can decrease your payout percentage without lowering the domainer’s take.

New Monetization. Another example of a company that is facing the market challenge is Root Orange. The company leases category killer domain names on a city-by-city basis. If you’re the owner of one of these domains you could, in theory, make more money in the long run on Root Orange than with traditional PPC or using the domain for only one “site”.

But what happens the first day your domain goes live on Root Orange? It’s not like 50 cities will be leased in the first month.

Root Orange tries to “pre-sell” certain domains before bringing them onto its platform, but this is also challenging. It’s hard to get business owners to lease the domains before they’re even on the system.

Another solution is to allow domain owners to continue to park the domain and earn PPC revenue for any city that isn’t sold yet.

Aftermarkets. Of course, the prototypical marketplace in the domain industry is a place to buy and sell domain names. Asking domainers to spend time uploading inventory is fruitless if you can’t guarantee buyers on the other end.

There are several solutions to this. Consider Bido, which started with one auction a day. By offering only one auction, it was able to ease the supply side of the equation while focusing on building the demand side. Once it attracted buyers, it was able to open up the supply side.

Another tact is to focus on a smaller niche. is proving successful by focusing on the Chinese domain market.

Although the challenges of creating any marketplace are plentiful, the results of executing it are powerful and profitable. Once an effective marketplace is operating, the owner can sit in the middle while the economic forces of the market do the work.

© 2009.

Review and rate domain name parking companies at Parking Judge.

Related posts:

  1. Moniker Adds Name Media, DDN Domains to Marketplace
  2. Moniker to launch domain marketplace
  3. NameDrive NDX Marketplace Tops 100,000 Domain Names

Root Orange Creates New Geo-Based Domain Leasing Option

December 6, 2009domain monetization, Domain Parking, Domaining, Domainnamewire, root orangeComments Off on Root Orange Creates New Geo-Based Domain Leasing Option

New service leases domains based on physical location.

Visit the web site and you might get a message like this:

Are you trying to reach customers in Austin TX? Make ‘’ yours today! Contact to see how affordable leasing this domain can be.

The domain name is being leased based on geographic location. If you’re a New York divorce lawyer, you could capture all of the type-ins and other web traffic to the domain from New York residents by leasing the area. The same goes for any other location.

The company behind this new service is Washington, D.C-based Root Orange. The company helps premium domain owners lease out their domains based on geography, and local businesses get leads online by locking in all local traffic for a premium domain.

root orange

In its pitch to local businesses, the company claims its service does three things:

-Increase search rankings
-Easy-to-remember website URL makes referrals easier, while increasing your credibility
-40% increase in search engine marketing campaign click-thru’s

Of these three, I think the last one is the most valid. Type-in traffic is another bullet point that should be included. As for search engine traffic and actually using one of these geo-leased domains as a primary domain for your business, that’s of questionable value. Search engine bots won’t capture your local content, and I’m wary of over leasing a domain for a company’s primary web site.

On the domainer side, Root Orange provides a new monetization opportunity for category-killer domains by leasing them to multiple people.

Local businesses pay anywhere from $9 to over $1,000 per month to lease a domain in their area. For example, will cost a New York lawyer $1,099 per month, while it will cost a Montgomery, Alabama Lawyer $69. These rates seem reasonable given the number of possible leads. You can search for domains and prices by location on Root Orange’s web site. Other good domains available include and

The company was founded by Princeton Roommates Camilo Acosta and Frank Langston, who won $35,000 in a Princeton business case competition.

Root Orange is another example of innovative services popping up to monetize domains in the wake of falling domain parking revenue.

© 2009.

Review and rate domain name parking companies at Parking Judge.

Related posts:

  1. DomainSponsor Expands Domain Leasing Program
  2. A Wacky Domain Dispute in Orange County