First, we don’t know if they really are killing arbitrage, their cash cow, or not. They may let some big players, quietly, still get away with it. With that said, let’s assume they really decided to kill arbitrage. The next step is to first recognize that killing arbitrage means losing tens of millions of dollars a year. During the tough times they are currently facing, does it make any sense to you? It doesn’t make sense to me either, not at all.
Let’s explore further then. During tough times, have they decided to finally focus on advertisers’ quality? why now? Is that what they believe will save them? And were they really losing advertisers because of arbitrage, or gaining added dollars? While quality is an issue, money is a bigger one. Arbitrage survived for a long time because it made money for Yahoo. Lack of quality? maybe, but not to a tipping point they had to stop it. While few advertisers didn’t like it, it wasn’t much in the news or anywhere lately to justify the sort of action Yahoo took, killing arbitrage completely. Any way you look at it, Yahoo move is based on information they have that you and me most likely don’t. Based on that, my next question is, how can we figure out what they know? Are there any clues in the marketplace? BINGO!
If they agreed to lose tens of millions of dollars, where can they pick up that sort of money elsewhere? And if they can, is it new money or possibly existing money another company decided to let go of, for whatever reasons?
In addition to Julie’s excellent coverage lately, my sources are indicating the same: ASK.com sub syndication deal is DEAD. What does it mean? Where are those parking companies and domainers who used that sub feed will go now? Since there are only two main companies in the marketplace, the answer to that of course is.. Yahoo. But wait! Can it be that this is the BEGINNING, and ASK is the first in a long list of upcoming contract terminations? If that is the case, now we can see where the tens of millions are coming back to Yahoo. It is coming back from all those who have no other option but Yahoo. Not bad for a runner-up now is it? Now, as any smart business, Yahoo likely ran the scenario that Google may retreat, change their minds about the whole thing. What happens if Google retreats? No big deal. Yahoo never welcomed arbitrage publicly and they can just as easily let arbitrage players get back in the mix. This I believe is Yahoo’s exit strategy.
How did I come up with all this nonsense? God knows. I got a call from Australia, another from California, both sources are asking to stay anonymous, telling me the same thing. In addition, before the domain business, for few years I used to play Chess online, and it just happens that I tend to analyze positions. What you see here is pure Chess, just instead of 64 squares, the board is the domain industry, king is Google, queen is Yahoo, Rooks are Ask.com and Oversee.net, bishops and knights are Skenzo and other various smaller players, and the pawns? You guessed it.. that’s domainers and arbitrage players.
(Image Source)
Related ASSISTA Searches:
PPC Arbitrage
ASK.Com
Speculation
Source: Posted on The Conceptualist by Sahar Sahid — Reprinted with permission — February 14, 2008
ShareThis
