Yesterday, a misleading article was once again published by Sahar Sarid on geo domains that misinformed many people in the domain industry. My first reaction was to respond to this post on his blog. However, I decided to wait things out and put my emotions aside, so I could write an informative post on geo domains based on facts and not opinions to give domainers and investors an unbiased view of geo domains that speaks volumes on its own. As most seasoned domainers and investors will tell you, a golden rule is to follow the smart money when it comes to reaching new levels of success before things go mainstream.
Throughout the years, there has never been a segment of the domain industry that has risen to center stage and become embraced by so many major players in the domain industry and media world. The reason Geo Domains are being embraced by many is due to the transformation of the internet by monster media companies such as Google.com and Yahoo!. Almost everything on the internet is transforming into local platforms to better serve consumers who are mobile and who depend on their mobile media devices to access information online. (More on this below) Effectively developed geo domains are the best local platforms on the internet that have an intimate connection with consumers all over the world and are embraced by millions of consumers monthly.
Before continuing, it is important for readers to understand “What Are Geo Domains?” They are not only .com domains, but much more. There is more to the domain industry than just America, and many American domainers have started to realize this, while those outside of America have always known this key fact.
The geo domain industry has been the best kept secret in the domain industry for over 10 years. While thousands of entrepreneurs were focused on “chasing domains” and building powerful portfolios for PPC payouts, others seized opportunity and secured some of the most valuable domains in the world and turned them into successful businesses. Most did this by hard work and following their gut feeling that has paid off well. Not only has it paid off well, revenue has started to skyrocket from advertisers wanting to advertise on geo specific websites in 2008. Additionally, many geo domain owners in the domain industry have become major threats to traditional print media advertising revenue because of their intuitive branding power over consumers.
The “Local” transformation on the internet this past year has forced traditional print media to regroup and find ways to effectively deliver local content to mobile users via the internet. For most, they have chosen geo domains. By doing this effectively, these media companies have generated large volumes of advertising revenue.
The Madison Capital Times took their media empire 100% online with Madison.com due to severe revenue drops with their print publications. This alone tells you how powerful their geo domain is to their media empire.
The LA Times reported that that they will bring in close to $25 million in online display revenue this year with their geo domain, LATimes.com. They went from generating $6 million in 2005 to $25 million in just 3 years with their geo domain.
Trinity Mirror, a major print media company in Europe, announced their launch of a geo domain network to deliver local content to mobile consumers. Additionally, they announced they will no longer be in the business of local newspapers.
These are just a few examples that show effectively developed geo domains can deliver large revenue streams. This is only the tip of the iceberg as the power of geo domains is starting to be unvealed.
Below you find projections for local search and local advertising on the internet by many of the top industry analysts. (source: searchengineland.com)
The Kelsey Group
The Kelsey Group forecast consists of Internet yellow pages (IYP), geotargeted paid-search advertising and local mobile ads (still tiny). Last year online classified advertising was included in the forecast, which appears to have been excluded this year. Wireless is also de-emphasized in the current forecast.
Global forecast:
2006: $4.1 billion
2011: $11.1 billion
The previous Kelsey forecast put U.S. local search revenues (as defined above) at $1 billion in 2005.
Borrell Associates
Borrell casts a broader net in its definition of “local online advertising.” As a consequence its numbers are larger. Included in the definition are geotargeted display ads and classifieds, local paid search, local video and locally targeted email advertising.
U.S. forecast:
2007: $7.7 billion
2010: $9.3 billion
Jupiter Research
Jupiter, which has historically taken a contrarian position and been bearish about “local search,” similarly defines a relatively broad category for “local online advertising.” While not quite as broad as Borrell, Jupiter includes paid search, locally targeted display advertising and classifieds. Jupiter believes that classifieds will dominate (61%) local spending through the forecast period and estimates geotargeted paid search advertising will reach $2.1 billion by 2011.
U.S. forecast:
2006: $4.3 billion
2011: $8 billion ($2.1 billion attributable to local paid search)
eMarketer
The data aggregator has in the past couple of years started generating its own online ad forecasts. The company doesn’t explicitly define what segments comprise its “local online advertising” category but it appears to generally mirror the Borrell definition. Local paid search is broken out as a subset of the larger local category. However, notwithstanding its apparently broad definition of local, eMarketer’s projections are more conservative than any of the other firms.
U.S. forecast:
2006: $1.3 billion ($800 million attributable to local paid search)
2010: $4.9 billion ($2.7 billion attributable to local paid search)
Piper Jaffray
Following the most conservative of the local forecasts is the most bullish. In a recently released 425 page report entitled “The User Revolution: The New Advertising Ecosystem and the Rise of the Internet As a Mass Medium,” Piper has aggressively embraced local search.
Piper estimates local online advertising, here defined as local search, IYP and classifieds, to be worth $4.589 billion today. The firm contends the medium-term local market potential is $25.9 billion. Piper also believes that local can eventually represent 50% of all search volume, assuming improvements in data quality as well as several other upgrades and innovations.
U.S. forecast:
2006: $4.589 ($989 million attributable to local paid search)
Market potential: $25.9 billion
Based on the factual data I have provided, you can see just how powerful the geo domain industry is becoming. I could list hundreds of more examples, but this is not necessary if you analyze the powerful information I have provided here and on past posts on the blog. The geo domain industry is still very young and already has some very impressive statistics. How can anyone say geo domains are overrated with statistics like this and new transformation occurring on the internet, the local market?
I would like to touch on a few topics Sahar addressed with more facts.
1. RickLatona.com: Rick has done an amazing job promoting the geo domain industry by selling many of his outstanding geo domains to owners who will transform them from poor PPC earners into successful businesses. Some will just resell for a greater profit as well. Rick is an entrepreneur, so of course he is taking advantage and selling many geo domains at great prices when there is demand. What is important to analyze is that he is selling most of them below market and not holding out for top dollar like most domainers. He does this with generic domains as well. Again, he is selling geo domains to domainers/end users so they can build businesses, because PPC does not work for geo domains.
2. Are they making money today? Please see info above and read what others are making in the domain industry from their geo domains. See Local.com, Marchex, etc. quarterly earning reports. See past sales and how geo domains have increased year after year. You will find the answer. The numbers do not lie. No hidden agenda to promoting geo domains, as they are common sense commodities to invest in once you do the research.
3. Dr. Kevin Ham: He is very new to the geo domain industry. He sees how poor they are for PPC earnings. There is no doubt that Kevin and his team will figure out how to exploit the revenue streams in their geo domains and build media empires around them. They will set the example for the industry to follow from scratch.
4. All the rest of the comments. Simply misinformed. Looking from the sidelines is the most misleading place to deliver information about an industry. It is like Martha Stewart trying to tell you how to Hunt. How credible would she be if she done that out of the blue? Exactly. There is no obligation to speak on subjects someone has no real knowledge of.
In closing, the GeoDomain Expo will be a great event to attend if you wish to learn more about the geo domain industry from “PROVEN GEO PROFESSIONALS” and not the sideline noise. It will be held from July 10-12 in Chicago.
Simplygeo.com will continue to deliver educational content for the geo domain industry. Just as I predicted early on, geo domains have become main stream in the domain industry. There are many great things to come from those who effectively develop their geo domains into media empires. I will surely write the success stories for historical purposes. I only hope that this article gets republished through mainstream blogs, in the same way the misleading one was, “The Other Side To Geo. We will soon find out the answer to this.
Thank you for your continued support.
