It seems that people are now registering domains just to put adwords on them, sorta like betting on horses:
The number of web sites being opened purely to publish pay-per-click advertising links from the likes of Google Inc and Yahoo Inc is rocketing, according to VeriSign Inc, which runs the .com and .net domain names.
There are close to a quarter of a million domain names a week being registered for just a few days, while people “test” the traffic potential of those names before discarding them, chief executive Stratton Sclavos told analysts yesterday.
The news came as VeriSign reported a 74% increase in revenue for the second quarter. It came in at $445m. Net income almost doubled to $41m over the same period last year.
Sclavos said that the company will change the way it reports the size of its domain name business, in terms of active registrations, because of the amount of speculation going on. It will reduce the size of the reported registrations by about 2%, he said.
“Names are being bought and then tested against traffic analyzers,” Sclavos said. “The ones that can generate more than the $6 or $7 [registration] fee per year are kept, the other ones are returned within the five day grace period.”
These speculators basically put up collections of Google Adsense or Yahoo Overture text advertising links that are more or less relevant to the topic indicated by the URL. Whenever someone comes across the site and clicks a link, the owner gets paid.
Obviously all these people looking to make a quick buck isn’t a goodl thing for adwords. I wonder how Google & Yahoo plan to sort this problem out.
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