Thursday, February 28, 2008

Network Solutions Wants to Make Sure that Nothing Unfortunate Happens to Your Domain

Network Solutions has hit on an ingenious business strategy. If you ask them if a domain name is available and it is, they'll hold it for 4 days so you can only purchase it from them. No need for any pesky shopping around - you can't. If you want it, you need to fork over $34 instead of cruising over to GoDaddy or some other site and paying $10.

They say this practice combats folks who capitalize on Domain Name Front Running or finding lists of domains that were recently queried and buying them in advance, so they can extract a higher cost in resale. In an extraordinary act of Chutzpah, Network Solutions insists that its practice prevents such front running by keeping a customer's recent query from being purchased by another party who could then charge them a premium or otherwise keep them from purchasing the name.

Now correct me if I'm wrong, people, but Network Solutions is holding the name so that they can charge a premium over other providers. That is the definition of Domain Name Front Running. Thank goodness they are protecting me from the bad guys.

Not surprisingly, I'm not the only one who's noticed and they are subject to a class action suit. Now to wait four days to register our wedding site with GoDaddy. Glad I didn't just order all the Save the Date cards with the domain name printed on them after checking first on Network Solutions to see if it was available or anything and then getting the bright idea to shop somewhere else. Really that would have been quite foolish.

Thursday, February 21, 2008

All Along It Really Has Been All About the Eyeballs

When I moved from working in the internet B2B space to the internet B2C space in the summer of 2006, I quickly grasped what I had only partially comprehended previously - that the "free" consumer internet economy is entirely based on people clicking through sponsored search listings, banner ads and other paid placements. I quickly concluded that were two types of people in the world - those that clicked on sponsored listings and those that didn't. Recent market research directly illustrates that point. 6% of internet users generate 50% of the ad clicks. Furthermore, those clickers constitute the demographic least likely to complete an online purchase.

The more finally honed this research becomes over time, the more internet advertisers will learn that the inputs don't equal the outputs in the click ad model. In fact, the whole business is much like the greater fool theory in which the existing players profit off the willingness of new players to enter and profit themselves. If ever, new entrants start to decline or find new and inventive ways to drive traffic to their sites and capitalize on their presence, then the click market as a whole will begin to dry up and the master click arbitrager at the top will need to innovate or die.

All this brings me to the idea of internet advertising as a whole and its relationship to television advertising. Why has television advertising been wildly successful and internet advertising not so much as reported above? For instance, an advertiser will pay a lot more for 30 seconds on network television, while relying on old fashioned methods to determine the impact they've had on the viewer and the subsequent return on investment, where as web ads come a lot cheaper but offer far more information regarding their actual utility to the advertiser. What web advertisers are coming to realize as television advertisers did as well generations ago is that it is all about the eyeballs after all, which is of course what we all said at the dawn of the internet anyway. As clicks come to be devalued as junk, the cost of spot based advertising will rise. Thus companies with something to sell online will compete to have their ads displayed in as many prominent locations on the web as possible and not be nearly as concerned as making sure that the click through is monetized. In fact, they may not even pay for the click at all.

Spot based advertising on the web of course has a much higher value than it does in old media, as we know so much more about you from the scripts running on the site while you are there. The effectiveness of the campaign will be far more easy to characterize for the advertiser then it ever was on TV. And as old and new media inevitably converge, web ads are becoming more and more like their television predecessors. The circle is complete.

Friday, February 08, 2008

Smokin' Third Pipe

GigaOm reports today that Stelera Wireless is offering high speed rural broadband services over the AWS-1 spectrum it picked up at auction in 2006.

Rural Texas Gets Superfast Wireless Broadband - GigaOM

Stelera currently owns all the AWS-1 rural licenses here in Colorado, so we are particularly interested to see how their rollout progresses. The success of offerings such as these will go a long way toward delivering the long promised third broadband pipe.

Tuesday, February 05, 2008

Stick a Fork in the 700 MHz C Block Bidding

It looks like the bidding for the national C Block is complete and the regional bidders have won. Round 34 is complete and no new bids were entered for any of the crucial regions encompassing the 50 states since round 30 meaning that any bidders three waivers were used up. Whether one bidder won them all or they were split is unknown, but the Open Access rules for which Google and others heavily lobbied will go into effect as the block did crest its 4.6 billion dollar minimum.

There is a small chance given the complex auction rules that another bidder in the A or B blocks has bid enough since round 30 to qualify to enter another bid for one of the C Block regions but that possibility seems far fetched. Saul Hansell of the NY Times Bits Blog, Erick Schonfeld of TechCrunch and Tim Farrar of TMF Associates have all offered expert analysis leading up to this point.

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