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DomainMart Releases Report: Domain Name Parking or Ecommerce?

February 8, 2007; 01:52 AM

DomainMart, a leading provider of quantitative and analytical domain name services, released today a report that sheds some light on the source of ambiguity in the parking vs. ecommerce decision and outlines some tips to assist in the selection process.

The report points out that even in the absence of financing and capabilities constraints, there is no unambiguous answer, as the decision depends on the risk-return preferences of the domain name owner. Nevertheless, Alex Tajirian, DomainMart CEO, provides the following tips when contemplating switching from parking to ecommerce:

(1)   Not every domain is suitable for ecommerce. The following checklist needs to be completed first.
a.   Insure the appropriateness of the domain name's TLD signal. For example, ".info" conveys the image of an informational site rather than ecommerce.
b.   Insure that user intent, as implied by the domain name, is congruent with the content of the to be developed ecommerce website. For example, is not suitable for selling music CDs online.
c.   Verify that the domain name is not more suitable for leasing.
d.   Verify that the domain name does not infringe on someone else's trademark.

(2)   If the owner of the domain name is facing a budget and/or capabilities constraint, and thus, not be able to invest in an ecommerce site, the domain name may be leased or co-developed.

(3)   One way to resolve the decision's potential ambiguity is to simplify the preference decision by looking at the respective alternatives' expected return per unit of risk.

(4)   Due diligence:
a.   Obtain clear and robust estimates of expected revenues, costs, and risk associated with the opportunity cost and cash flow estimation error.
b.   If you are leasing your domain name to an ecommerce development company, the performance of the manager must be carefully assessed, in that, average performance, in this case, is not a robust performance measure of performance, unless your domain name is an integral part of a managed portfolio. Thus, look at the manager's top performers and laggers. The lagers might have similar characteristics to your domain name, and thus, can provide valuable insight into the success of your domain names.

(5)    To reduce cash flow risk, have your domain names be managed as an integral component of a portfolio of ecommerce domain names.

About DomainMart

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

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DomainMart Recommendation: Open Up Domain Names, Don't Litigate - February 13, 2007
DomainMart Releases Report: Madison Avenue & Domain Names - February 5, 2007
DomainMart: Direct Navigation - Empirical Evidence from Domain Names, Ecommerce - October 9, 2006



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