Domain Parking Continues Downward Spiral: DBS

Dark Blue Sea notes another drop in domain parking revenue.

Australian domain name firm Dark Blue Sea, which runs Fabulous, noted another drop in domain parking revenue in its latest quarterly update. Just two months ago Reglike wrote regarding how the firm’s parking revenue from its 600,000 domains was down 18% in just one quarter.

The news isn’t getting better. In the quarter ending June 2008 the firm earned $1,003,000 from its firm owned parked domains. That’s a further 27% drop in just one quarter.

To be sure, Fabulous sells a lot of domain names in any given quarter, but it is very apparent that its revenue per domain is falling. The firm blames a number of factors for this fall:

– the weaker economic environment in the US
– generally fewer advertisers (as observed by Dark Blue Sea) leading to a reduction in bid prices and coverage and hence overall yield received by Dark Blue Sea
– changes to the way that online advertisers can place advertisements via the advertiser interfaces of the major search advertising networks; and
– an overall uncertain strategic landscape stemming from the unsuccessful takeover bid for Yahoo by Microsoft and the subsequent outsourcing of search advertising to Google by Yahoo.

The news isn’t all bad. Dark Blue Sea’s quarterly revenue from parking other people’s domain names is holding steady. It generated nearly $3 million for its clients last quarter. Dark Blue Sea kept regarding 24% of that; 76% was paid in revenue share and other expenses. It also sold $2,779,000 worth of domains last quarter compared to only $638,000 the same quarter last year.