DomainMart: Direct Navigation - Empirical Evidence from Domain Names, Ecommerce

October 9, 2006; 05:39 AM

DomainMart, a leading provider of quantitative and analytical ecommerce services, released today a report pointing out the empirical shortcomings of current empirical studies of direct navigation.

The report examines two major empirical studies on direct navigation. The first, by WebSideStory, finds that sales-conversion rates when a visitor arrives at a site through direct navigation are higher than other forms of Internet navigation. The second considers only the relationship between direct navigation and its impact on domain name prices and parking revenue.

Direct navigation has tremendous marketing implications and is of paramount interest to buyers and sellers of Internet properties (domain names and websites). Thus, it is imperative that the sources and magnitude of additional value creation are investigated thoroughly.

The WebSideStory study classifies visitors into three levels, and estimates the conversion rates for each level and across various product groups. However, according to DomainMart, the study has a number of shortcomings with regard to visitor classification modeling, estimation techniques, and interpretations of results.

The DomainMart empirical study suggests that direct navigation does not add value to a parked domain name. The lack of significance of direct navigation can be attributed to statistical estimation issues, as noted in the study, and that publicly available domain name sale prices do not reflect the full benefits of direct navigation, i.e., sellers, and possibly buyers, on average, do not fully understand the value of direct navigation.

“Future empirical studies must address these issues to determine the magnitude of value creation through direct navigation,” says Alex Tajirian, DomainMart CEO.

DomainMart is an industry leader in providing ecommerce products and consulting services, including appraisal, escrow, private investment management funds, protection, valuation, and parking traffic monetization management since 1996.

For more information, please visit http://www.domainmart.com/news/
Direct_Navigation-Empirical_Evidence.htm.

Tom Saitori, Marketing Specialist, DomainMart, Tel: +1 (415) 905-4234