Don’t Use Marchex As a Domain Industry Measure: They Suck

Feb 19 2010

marchex_badMarchex holds one of the better name portfolios in the industry yet they can only muster $23 million in revenues during the last quarter of 2009? That’s abysmal. Marchex is best known for buying the Yun Ye (Ultimate Search) domain portfolio, which Marchex purchased for 164 Million USD in 2005.   In 2005 this portfolio was generating $19 million in revenue and parking has certainly dwindled to nothing but c’mon, a company of that size can’t take that and the rest of their assets and squeeze out more than that? I can’t imagine why they’re not raking in the dough with the brilliant “Pay Per Call” campaign.  Then again,  I’m sure if that worked Google would be doing it.

I am absolutely positive I could take that portfolio and generate more revenue.  It’s not a very difficult strategy.  Build out sites and use the similar based domain names’ traffic which is targeted and use it to build the numbers.  Use this model over and over.  On the positive, they do realize the value of local but everyone in then industry has picked up on this now (except for local old school media)

According to their recent 4th quarter report, they “bragged” that they had over 70,000 advertisers.  That comes out to a whopping $328 per advertiser, not a very good number if you average it out.   You would think they would be better off packaging their domains together and selling a larger advertising package.  Looking over the report I see that publishing gave $7 million to the bottom line and $1.4 million from paid inclusion.  But here was my favorite quote “During the fourth quarter of 2009, Marchex sold a small number of non-strategic domains that yielded $2 million. There is still significant demand for high quality domains and Marchex believes that will remain the case for the foreseeable future.”

So according to Marchex, if all hell breaks lose we can always sell off our assets.  The way they’re managing their business model, this may be the only thing that keeps them in business.

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Outsmarting the Dumb, Outworking the Smart

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  1. Belmassio

    Truth is, their portfolio is not that great…….some 78,000 zipcode doamins, if I recall correctly, with very little direct navigation traffic is a lot of renewals fees that suck profits from the rest of the decent domains.

    Have you ever typed in your zipcode to find local info? I never have and don’t have a clue what is on my zipcode even. Surfing by zipcode is boring….it has zero personality.

  2. Troy

    “I can’t imagine why they’re not raking in the dough with the brilliant “Pay Per Call” campaign. Then again, I’m sure if that worked Google would be doing it.”

    You clearly have no experience in “pay per call”. I will leave it at that.

  3. Troy

    I like most of your posts Shane, I didn’t mean to sound rude. You are right, Marchex is a crappy company but the “pay per call” model of business can be very profitable, and there are some big players in the game. Marchex just hasn’t done it right.


    1. Post author

      Hey, I’ll take “most” . I was just playing around. There are plenty of great money making opportunities that I don’t know about. As soon as you posted the comment I started looking into it. I just don’t like Marchex, they seem to take good things and screw them up

  4. Bill

    I’d love to hear your ideas on how to increase profit when the ENTIRE PPC industry is down… now that would be an interesting post.

    It’s quite easy to say you’d do something better without actually doing anything at all:)

    1. Post author

      I have the utmost respect for what you do and how you’re doing it but that’s a pretty broad statement. I WILL write a post but no matter what I write you’ll alway be able to say I have no idea what I’m talking about because I’ve never done it. It’s really a no win scenario for me but I wouldn’t have written it if I didn’t believe I could. I will admit I made one big mistake in my post, their portfolio is weaker than I thought. They had millions and millions of dollars of cash infusion from going public and they wasted it on zipcode domains. Bill, I really do appreciate the comments and honored you actually read this thing. I’ll put my thoughts down and see what you think. Just take it easy on me

  5. Bill

    I wasn’t trying to call you out, it’s just whenever a blog ends up on domaining bashing one of the few public companies in our small pond of the internet I really do like to get some backup info as Marchex regardless if you like them or not is one of the most public examples of what domaining is all about.

    At least in my mind.

  6. Pingback: Did Your Domains Investment Return 60% Since September? It Easily Could Have | Domain Shane

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