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.