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11|14|2012 01:10 pm EDT

Facebook’s New Monetization Strategy – Best News for Domain Owners in Years?

by Kevin Ohashi in Categories: Miscellaneous

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This is a guest post by Kevin Ohashi. Kevin is a 10 year veteran of the domain industry. He currently is working his startup, Review Signal, which transforms the opinions people share publicly on social media into a review site for consumers. It currently provides web hosting reviews and will review domain registrars soon.

I was reading Mark Cuban’s thoughts about Facebook trying to get him to pay to reach his fans. It’s an interesting opinion and one I can empathize with. The crux of it is this picture:

Brands have spent millions of dollars getting people to ‘Like’ their brands. Now, Facebook is asking them to pay more to reach the audience they already paid to build. It feels fundamentally unfair because Facebook has changed the rules of the game half way through.

Of course, there is another perspective to consider: the users. They probably don’t want every brand spamming them. There is some ambiguity to the word ‘Like’. Some would argue it’s not a laissez faire situation where brands are free to advertise to every user as much as they want. Facebook’s EdgeRank is supposed to improve the user’s experience by curating what users see in their feed (and it just so happens that more money greases the EdgeRank wheels).

That’s a quick synopsis of the article. Let’s get back on topic.

Why is this important to domainers?

Mark Cuban is advocating for brands to maintain more control over the way they communicate with their audience. He’s promoting Twitter, Tumblr, Instagram and MySpace (no joke!). It’s not mentioned in the article, but there is still only one place that the brand still maintains full control: their domain name(s).

I’ve argued in the past that domains are becoming less necessary as brands opt to use social networks for their primary web presence. Facebook has about one sixth of the world’s population as users. It’s easier to manage, easier to share content and easier to reach your audience (assuming you have money to spend).

This is a real kick back from brands. Maybe it’s just one guy. Maybe not. But it should be a good reminder that when you buy into these social networks, you’re potentially making a deal with the devil. They control the rules and you are beholden to them and the changes they decide to make in the future. Your relationship with your fans is moderated by someone else.

In the developer community we worry a lot about building our software on top of someone else’s platform. We’ve seen Twitter take out competitors it didn’t like and restricting their API to control what developers can do. Perhaps it’s reckoning time for brands. Maybe they will experience the risk they’ve put themselves at by investing into social media on platforms they don’t control and that don’t have an established business model.

Let me be clear: I don’t think this will stop brands from using social media. However, it may be the first of many tiny cuts in Facebook’s business model which moderates how it will deal with brands. Some brands may decide to try to control their fans’ experience more and invest in their own domains. At the margin, there may be some increased demand for domain names. Which is good news for domainers and the first good news I’ve seen in a while for the industry. I think the longer term outlook is still fairly grim for most of the industry, but end user demand is the only bright spot in my mind.

11|17|2008 08:26 pm EDT

Mark Cuban charged with Insider Trading

by Frank Michlick in Categories: Up to the Minute

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The SEC has charged Mark Cuban with Insider Trading over the sale of 600,000 Mamma.com shares in June 2004. Mark Cuban, owner of the Dallas Mavericks owned stakes in registrars Tucows and Register.com.

The Commission’s complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com Inc. invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.

Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban’s entire position in the company. When the offering was publicly announced, Mamma.com’s stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day’s closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.

In a response on his blog, Mark Cuban says:

“I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

[via PaidContent.org]