Millions of Addresses and Thousands of Sites, All Leading to One

[Demeter]

http://www.nytimes.com/2007/05/28/technology/28ecom.html
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May 28, 2007
E-Commerce Report
Millions of Addresses and Thousands of Sites, All Leading to One

By BOB TEDESCHI

THINK you have a good handle on the Internet economy? Try this one.

What Internet business has raised $120 million in financing in the last year, owns 725,000 Web sites, and has as its chief executive the former head of Primedia and International Data Group?

If you guessed NameMedia, a privately held owner and developer of Web sites based in Waltham, Mass., you take the prize. Otherwise, consider reading on.

According to Kelly P. Conlin, the chief executive of NameMedia, the company’s business is best seen as an online property developer. “What we’ve wanted to do, quietly, is amass the largest real estate position on the Internet, which we feel we have,” Mr. Conlin said. Some of those properties, he said, are the equivalent of “oceanfront” sites, or high-value addresses like Photography.com or DailyHoroscope.com that NameMedia will populate with relevant editorial content. Those who type in any of NameMedia’s other 6,000 or so photography-related Internet addresses, like photographyproducts.com, will land on Photography.com...The business is a far cry from the days of cybersquatting, where speculators bought up names of businesses to which they had no legitimate claim, but it does represent a vindication of sorts for many who bought hundreds or thousands of random Web address names on the hope that one day they would be worth something.

Behind this suddenly active business category — which includes companies like iREIT in Houston, Marchex in Seattle, and Demand Media in Santa Monica, Calif. — is the recognition that not all Internet users turn to a search engine when they are confused about where to find something online. Rather, 5 percent to 10 percent of people will simply type in a name that sounds as if it might suit their needs...The so-called direct search or direct navigation approach is seldom fruitful for users, nor has it been particularly profitable for owners of the sites that they visit. An obscure Web address may have four or so visitors a month, and perhaps half will click on an ad. “But if you have hundreds of thousands of those, it adds up,” Mr. Conlin said. “It’s an inside-out way of creating volume.”

Mr. Conlin said that the properties in his portfolio, which includes about 1.4 million Internet addresses that independent owners have placed on NameMedia’s network of sites, attracts about 60 million monthly visitors. NameMedia will choose which ads to place on those sites, and will collect some of the revenue.

For other sites not likely to be sought by hobbyists, like CellularPlans.com or CareerGuide.com, NameMedia fills the home page with links that users would otherwise see if they typed the same search Web address into a Yahoo or Google search box. The search engines pay NameMedia a commission whenever someone clicks on the links...So far the company’s strategy is paying off, Mr. Conlin said, with company revenue doubling last year, to $60 million.