Internet REIT, a giant investor in domain names backed by leading private-equity investors, owns more than 30 addresses that are misspellings of Google or its product names, including Google Earth. (Check out all the domains below.)
In many cases, the sites are filled with pay-per-click ads sold by Google, long a search-ad partner of Houston-based iREIT. In some cases, Google is advertising on the sites. In at least one case, an iREIT-owned Google typo is for sale. And iREIT’s Google typos are not an anomaly — iREIT owns typographical variations of many other famous corporate brands ranging from beer giant Anheuser-Busch to phone giant Verizon, which I’ll discuss in a subsequent entry.
iREIT’s financial backers include Maveron LLC, a Seattle venture-capital firm co-founded by Starbucks Chairman Howard Schultz; Perot Investments, a Dallas investment company founded by billionaire and former presidential candidate H. Ross Perot; and Jacobson Family Investments, the investment vehicle of a wealthy New York Family. (UPDATE on 2/18: iREIT owns these Starbucks variants: ASTARBUCKS.COM, STARBUCKCOFFEEGEAR.COM, STARBUCKDS.COM, STARBUCKSCOFEE.COM, STARBUCKSEMPLOYMENT.COM and STARBURCKS.COM)
Bob Martin, the chief executive of iREIT, said in a telephone interview today that the company has been taking steps to remove “legally sensitive” domains from its portfolio, having acquired many through acquisitions of smaller investors’ portfolios. However, he said, it is still working on a system to identify and divest such names. “We know that typos of domains that are potentially legally sensitive are not something that have lasting value,” he said. Martin added, “Typos are definitely a challenge for the industry.”
Craig Snyder, the chief operating officer of iREIT, who joined Martin on the interview, said the company needs to develop internal tools to identify and eliminate certain domains. He said it also plans to expand a relationship with a partner that recently helped it purge a significant number of potentially problematic domains.
(I told Martin and Snyder that I downloaded a list of names sitting on iREIT computer servers from DomainTools. It was easy to do a “search and find” in a Notepad file and identify the Google typos and others. I then did a Whois search on each domain to verify that it was indeed registered by iREIT. The Whois records confirmed that many of the names have been owned by iREIT for months, so it has had time to identify potentially problematic names.)
iREIT’s actions raise serious questions about how dedicated top industry players are to reshaping the image of the domain industry. The domain market is controversial and little-understood. For years it has received a bad rap because many of its players have engaged in “cyber-squatting,” acquiring names associated with corporations and seeking to profit from them. In recent years, the image has begun to improve as the media has focused attention on the success of the many domain investors who acquire only generic words and steadfastly avoid legal trouble.
But despite the efforts of the sector’s “white hats,” the industry continues to be plagued by individuals and companies that buy typographical variations of famous brands (some misspelled, some not), which can but does not always amount to trademark infringement. A key reason they do it: misspellings of company names are lucrative, and some speculators can’t hold back. I spoke recently to a marketer who says she gets a lot of traffic, which converts pretty well, from the misspelling of the domain name of a major girls magazine. But she and other marketers are increasingly concerned about poorly converting traffic from typos or correctly spelled variations of corporate names. For more on the controversy surrounding poorly converting traffic from parked pages, check out this rant.
Let me add: parked domain traffic is of mixed quality. Some of it is very good, particularly on short, generic domains like CNET’s Kids.com, which has converted very well for one particular marketer I know. Some parked domain traffic, however, is “garbage,” in the words of another marketer I spoke to. Josh Meyers, who runs Yahoo’s Domain Match advertising program, told me that, overall, parked domain traffic converts similarly to PPC ads on Yahoo.com and Google.com.
The fact that iREIT owns misspellings of Google and its services is at once humorous and bizarre, particularly given that Google is its search-ad partner. Google is a huge force in the domain channel. Along with Yahoo, it syndicates ads on parked pages that amount to $600 million to $1 billion in annual advertising spending by marketers, according to various analyst estimates. Representatives of Google did not immediately respond to a request for comment for this article.
The Google-related domains are: