What do Domain Kiting and PPC arbitrage have in common? Not much.

A reader, J-P, made a comment under my post: Pathetic Post of the Day, Calling PPC Buying Publishers Con Artists. J-P thinks that most sites in the PPC arbitrage game are involved in “domain kiting” and are in fact criminal. I think J-P is wrong and here is why:

PPC arbitrage is the practice of buying incoming PPC traffic and sending it out through a higher paying PPC traffic stream. Typically this involves buying penny clicks on second or third tier PPC sites and sending them to a page with higher paying Adsense or YPN PPC ads. This is not fraud because the visitor has to consciously read and click the ad just like they would on any other site. I have observed from my affiliate campaigns that traffic on arbitrage sites does convert, so lets leave conspiracy theories aside on this one. (That being said, turning a profit from PPC arbitrage is no walk in the park.)

The second issue is domain kiting — which is unrelated to PPC arbitrage. Domain kiting was a term coined by Bob Parsons of Godaddy.com. Wonder why you search for available domains, come back a day later and they are registered? This is why. Click the Bob Parson’s link to get an in depth look at what is going on here.

Here are my personal views on the two issues:

Domain kiting is a problem with ICANN and Verisign’s rules. Perhaps an issue that could go to civil court but certainly not criminal, unless something else illegal is going on here — which I seen no evidence of.

PPC arbitrage — a completely separate issue — is a good thing. Just as there is nothing wrong with buying and reselling stocks, there is nothing wrong with buying and reselling internet traffic. This is an evolutionary market. As in any other real market some people don’t like arbitrage. Capitalists are called profiteers & exploiters, domain investors used to be called squatters, and the list goes on. This is the free market — and it works.

I have been a regular reader of Mashable for a while now. The thing that sticks out at me time after time is the domain names Web 2.0 startups use.

Take a guess what niche these domains represent before visiting the sites:

OakTreeIdea.com
DoveTail.tv (the extension gives a hint)
ZingFu.com
Meez.com
Traineo.com
CrazyEgg.com
ThisNext.com
Twango.com
YFly.com
Burrp.com
Loowa.com
Kiko.com
XuQa.com
Kevo.com
KindFish.com
Badgr.com

But hey, it works out for some. Bebo.com is flying high, and Xanga isn’t doing too bad either. However, if you are targeting a specific niche I would recommend having that keyword/phrase in your name.

A few days ago I recieved an e-mail about a class action lawsuit, today I recieved two mailings about it one addressed to me, the other one of my LLCs. Since it appears any US resident/company advertising on Yahoo Search Marketing has recieved this, I am going to comment on it.

The search engines are feeling a lot of pressure over click fraud right now. Its a multi-billion dollar industry so obviously it is going to attract trial lawyers. Last week Google released a report refuting many of the click fraud claims that click auditing companies, such as Adwatcher have made. (For the record, I use Adwatcher, and I have recieved refunds from PPC companies based on the data it has collected.)

Since Google has been the main target it is not suprising that Yahoo has now also come under the crosshairs in this Checkmate vs Yahoo! Inc suit filed in California (by a Florida corporation against a Delaware corporation.. interesting.)

I was reading over the papers and found this very interesting:

“..including improperly collecting revenue by charging and/or overcharging Class Persons for clicks that were click fraud, click through fraud, fraudulent clicks, click spam, invalid clicks, unwanted clicks, unqualified clicks, improper clicks, non-converting clicks, inadequately converting clicks, clicks that were not reasonably expected by Class Persons or otherwise claimed by Class Persons as clicks for which Class Persons should not have been charged, and improperly collecting revenue by charging and/or overcharging Class Persons for clicks where users did not actively choose the Class Persons’ listings”

May be I’ve been in the dark, but since when is “unqualified clicks, improper clicks, non-converting clicks, or inadequately converting clicks click fraud?

I was thinking about this and I may have an explanation. One thing I have noticed with Yahoo Search Marketing is they like to change your ad copy for you. I have had both title and description mysteriously turn in to something I did not submit nor approve — and I have heard others say the same.

As usual, this just looks like a case to make some trial lawyers millionaires and hand out the actual plantiffs a couple of dollars (or coupons.) I’m not participating.

IAC/InterActiveCorp the owner of Ask.com, LendingTree.com, Match.com, Hotels.com etc. announced today that it has purchased a 51% share of CollegeHumor.com’s parent company. An exact price has not been released but it is believed to be in the 8 figure range.

This is a good example of the added value recurring traffic has. CollegeHumor has built up a site where loyal readers come back again and they tell their friends. A large portion of their traffic is eBaumsworld-style movie clips and pics — certainly not unique. CollegeHumor has been able to build a presence and mindshare online, targeting a specific demographic and adding unique content (daily “blog” posts from multiple authors.)

My strategy for internet publishing has been to establish niche traffic streams and then build online communities around them. It is hard, it takes a long time, and you can make a lot more money sending the traffic elsewhere — and that is why established, profitable web sites are worth so much money the the big players (Fox Interactive Media/News Corp and IAC at this stage of the game.)

Quadzilla from SEOBlackhat has made a great post on estimated traffic based on search engine: Google – Yahoo – MSN – and everything else; and placement in the SERP. He also followed it up with a free expected click by rank tool.

These calculations are accomplished through the “accidently” released AOL data, Hitwise, and Overture keyword tool. While not 100% accurate this is possibly the closest to accurate data seen outside of the big engines. Obviously the clickthrough rates will vary by the copy relevance, but here are overall average clickthrough numbers extracted from the AOL data:

Ranking Number 1 receives 42.1 percent of click throughs.
Ranking Number 2 receives 11.9 percent of click throughs.
Ranking Number 3 receives 8.5 percent of click throughs.
Ranking Number 4 receives 6.1 percent of click throughs.
Ranking Number 5 receives 4.9 percent of click throughs.
Ranking Number 6 receives 4.1 percent of click throughs.
Ranking Number 7 receives 3.4 percent of click throughs.
Ranking Number 8 receives 3.0 percent of click throughs.
Ranking Number 9 receives 2.8 percent of click throughs.
Ranking Number 10 receives 3.0 percent of click throughs.

You can see more tables at SEOBlackhat.

Try late Sunday nights that turn in to Monday mornings!

I decided to see how much money I could make by devoting the entire month of August to building affiliate sites. The goal is to work 7 days a week, devoting no less than 10 hours a day to this. Not much to report other than my shoulder and back are killing me right now.

I am pretty good at the design standpoint. I can create all the custom graphics/logo/etc for each site in under 15 minutes. The site design takes a little longer, but only if I use CSS. The bulk of the time and effort is spent writing content and organizing keyword lists.

In other news, AOL publicly released a database of search terms from 500,000 users. Their identities are supposed to be hidden, but as has been pointed out, people are always doing searches for themselves. Markus Frind predicts that this data is going to have a big impact on SEO spamming and PPC bidding.

I tried opening one of the data text files in OpenOffice (one of 10 files, each decompresses to over 200mb.) Over an hour later, the file was still loading. As you might have guessed, I am not very adept at the technical side of things in this industry.

Jon from the WickedFire.com message boards (where I happen to be an admin) is doing a lightning question right now until 5:45 EST. If you have a question about anything related to making money online this is *the* person to ask. SEO, affiliate marketing, PPC arbitrage, building sites, getting links, the list goes on. Here is a direct link to the thread.

Last year I was curious about how the Weblogs Inc network of blogs (Engadget, Autoblog, Luxist, etc.) recieved permission to use other people’s images on every one of thousands of blog posts. Certainly they did not have time to request and wait for permission from every single web site?

Looking for an answer I sent an e-mail to Shawn Gold at Weblogs Inc (who left AOL in February of this year.):

“I’m curious about the legal issues with the images used in Weblogs Inc’s blogs. I notice that nearly all images are hyperlinked to their original source. Do the bloggers ask permission to use each individual photo, or is there some kind of fair use issue going on here?”

The reply from Shawn came back 2 days later:

“Hi Andrew;
There are fair use issues with images…we do it like google, use a smaller image than the origianl and link to the original source.Don’t have the time to ask permission for every image. You can google fair use on images or even search googles image practices and you will get the skinny.”

I was correct, they were using the fair use defense.

Far from being a lawyer, I am not 100% certain this would hold up. First of all, the images are big. Google Images max out at 124 pixels wide, Google News at like 79 pixels. These are thumbnails. Weblog Inc’s 425 pixels wide might be a bit of a “stretch” for fair use… considering that image fair use has been called in to question over mobile right use, things are even greyer.

Typically companies like Weblogs Inc get away with this because #1 with the exception of very dumb companies, everyone loves free traffic, especially from a huge and influencial site like Endgadget. #2, very few companies register the copyright of an images, which costs $30 a pop. Thats right, you can register the copyright of an entire book for the same cost as a single photograph.

Considering many photographers would be lucky to average $30 for every image they take, registering the copyright would send them in to bankruptcy. If the copyright is not registered, infringement damages are greatly reduced meaning a hiring a lawyer results in an even bigger loss.

I am not writing this to attack Weblogs Inc or anyone at AOL. Rather, that the legal system is a complete mess. These issues create a minefield for internet publishers who want to play the whitehat game without hiring very expensive lawyers.

There is a very interesting post by Pete Cashmore over at Mashable.com where he analyzes the traffic stats of major sites during Myspace’s “power outage” on July 22nd and 23rd.

Hitwise data shows that rival Facebook’s traffic edged upward over July (but still has a long ways to go before meeting MySpace.) Other sites, included Google saw traffic spikes during Myspace’s down time.

Downtimes and dissatisfied users open up market opportunities for internet property owners large and small. I recently told someone you can compete in any market. If your competition charges money, give it away for free. If they give it away for free, charge money for a superior product. If your competition’s site is slow and down often (like Myspace) use a faster server and better software.