Even if there was a decrease value to the advertiser, this would be already built into the cost…the beauty of the auction system.

I think that eventually either the PPC option will disappear for parked domains or Google and Yahoo! (or somebody else) will build a separate advertising network for parked domains. Either way, this will result in either zero revenue or less revenue for these kinds of sites.

I’m sure geosign is making more than some small countries but it doesn’t mean it is 1. sustainable or 2. that they don’t have the talent or the drive to take it any further than those 2003 websites (mostly) in their portfolio or 3. sustainable or 4. sustainable.

The gizmocafe.com video content is also very funny stuff.

Let’s calculate: 5% annual return on 160 million = 8 million a year. Do you think after deduction all costs, that these stupid sites generate 6 million in profit per year, total? I doubt it.

Direct navigation companies are betting big that new, less-than-savvy Internet users will find out about the “Internets” and go to something.com faster than existing Internet users will learn what a search engine is and go to Google to find information about “something.”

Unfortunately, most of the sites being developed by these firms have such weak content and such a generic feel that actually getting users to stick around or come back multiple times is a real challenge. Despite the 100+ content creators and editors a previous poster claims GeoSign has already hired, the content on the sites in their portfolio just looks too generic and plain. More savvy users (like us geeks on TechCrunch) will quickly recognize it for what it is: filler content designed for SEO and that directs you to ads.

Is money being made by these types of companies? Absolutely. How much and for how long? Who knows. I do think it’s worth noting that (at least to my knowledge), none of types of firms has ever produced a massive “hit” Internet service. The owner of videos.com didn’t create YouTube. Why not? The owner of photos.com didn’t create Flickr. Why not? Firms like DemandMedia in particular are hoping that they can create a large network of social media sites (”millions of MySpaces”) simply by plugging a generic social platform into a generic domain name but what they’re lacking is probably the most crucial aspect of success: passion. Nearly all of the people who have started the startups that have captured our attention in recent times were passionate about the product they were building, built it to meet a need they had (or to serve a group they were a part of) and have created a brand around their active participation in the business. From Kevin Rose to Mark Zuckerberg to Tom (even though he was more of a marketing front), you have people who, at the very least, appear passionate about what they’ve built and who are really involved with their communities. On the other side, you have companies like GeoSign and DemandMedia that think that with enough money and “professionals” they can create a social media Death Star that will take over the world. I, for one, won’t be holding my breath.

Won’t they be acting basically like a VC company with the only difference being they will actually use all their portfolio companies to hep each other out? Whether that be with technology or traffic or people?

Like if you had 10 REALLY great sites but all they need was eyeballs to see it and you had one portfolio site already with millions of visitors…use that one site to promote the 10 new ones and hopefully you eventually have 11 sites with millions of eyeballs.

They should go after Odeo!

I think the 3 to 5 number is incorrect, actually… According to the interview I linked to, they have 50 – 60 targets…

With Geosign’s recent purchase of Hockey.com and the announcement that they hired a domain acquisition strategist, I would say it’s safe to bet that they will be picking up some premium domains that convert well, are readily monetizable and generate substantial type-in traffic… Their GolfCourses.com domain comes to mind…

It will take substantial capital to pry names like these from the hands of their current owners, but the strategy will pay off in the long-term (if not the short term as well)…

VC money and web investment is about ‘throw and stick’ the more they throw at it, the more will stick somewhere.

Throw $500M, $300M sticks write off $200M and the $300M that sticks may make $3B. It’s gambling plain and simple.

The numbers are just bigger.

Baz

I’m also not sure how Restaurantica can be called a “social networking” restaurant site, but maybe that’s just bias from running a similar site myself. =)

Tim’s a smart guy and he knows how to make money online… I believe he is intent on adding value to the internet, and that the sites they currently operate are just a precursor of what’s to come…

They have already hired 100+ content creators and editors and have several interesting projects underway…

With the traffic they pull, and the IP they own, $160 million is not outrageous… The domain industry is reaching critical mass, and the value of targeted online advertising is increasing steadily… I think AC will look back on their investment in Geosign as a very wise move…