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
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, MusicDownload.com is not suitable for selling music CDs
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
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
(5) To reduce cash flow risk, have your domain names be managed as
an integral component of a portfolio of ecommerce domain names.
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/Parking_vs_Ecommerce.htm or contact: Tom Saitori, Marketing Specialist, DomainMart, Tel: +1 (415) 905-4234