Phone directory giant Yellow Pages Group surprised the Canadian Internet industry by announcing it had spent $2.5 million for 389 "domain names" owned by Maxymych's Montreal-based firm, Emall.ca. The prize list includes maps.ca, autos.ca and attorneys.ca, all specific categories that Yellow Pages will use to expand the reach of its online directory business.
The article [thestar.com]
What's the advantage of this strategy?
Besides reducing risks/costs associated with a "yellow pages company" having to pay several search engines for traffic on a never ending PPC basis this acquistion presages the creation of industry specific and geo-targeted Vortals that will gain the IYP the advantage of 1) type-in traffic; 2) niche marketing traffic (sign ups for listings); 3) data aggregation (free listings of basics); 4) their own PPC within the Vortal; 5) instant, memorable brands; 6) Oh, the possibilities . .
The directory as Vortal and Vortal as directory lives! The YP dinosaurs stir to life! The YPs fight back against extinction by search engine! Brilliant.
As my past posts have indicated I've been dumbfounded by how slow the big YP players have been to build out a web based model for their future survival. This is one of the smartest moves I've seen since Barry Diller buying Hotels.com, etc.
Someone at the Yellow Pages Group just earned their bonus for the year.
I think they'll use it extensevly on billboards and TV ads. I've seen them do it already. I don't remember what the billboard read, but it had a custom domain, but it was for yellow pages. I've seen it a few month ago.
From all my experience with .ca domain names, they overpaid.
This is a future investment. The .ca is not so recognized yet, but in a few years with a good promotion, it will be huge.
As my past posts have indicated I've been dumbfounded by how slow the big YP players have been to build out a web based model for their future survival. This is one of the smartest moves I've seen since Barry Diller buying Hotels.com, etc.
I agree. And yp.ca is in general a really, really crappy site. It's extremely unusable and annoying. I use 411 instead all the time, I think it's the same data.
[edited by: moltar at 5:04 pm (utc) on May 17, 2006]
the thoughts of a random Canadian
"Lets see, I need a new lawyer... hmmm ... where will I find one? .... I am too lazy to open the Yelow Pages.... I know, why don't I type "attorneys.ca" into my browser and see who I can hire for 300 dollars an hour..... no, that would be stupid, maybe I will ask my friends or families for a reference instead."
An example of why I feel they overpaid. They should have just concentrated on improving their site.
no, that would be stupid, maybe I will ask my friends or families for a reference instead
You are forgetting about the people that don't think like you ;) And there are many! We tech people are very logical and it's natural to think that way, but many people aren't like us.
I have several domains parked with sedo and I am getting good type in traffic. So people type in the domain and then also click ads. Would you ever do that? I don't think so, but there are people that do!
Branding to follow. Not too hard to grab mindshare for domains such as Maps.CA.
Also, if you are going to play to the home crowd - which clearly this is - then impress them with your loyalty to the Canadian brand. :)
I'd say this will turn out to be the best $2.5 million invested in "marketing to Canadians" that has been or will be invested in the last and next decade.
then impress them with your loyalty to the Canadian brand. :)
Definitely! Especially if they use a little maple leaf as a "dot" in the domain name, like maps[maple]ca :) Canadians are quite submissive to this type of advertising. Remember the "i am canadian" ads?
I personally use .ca domains all the time for Canadian sites. If there is any hint of "internationality" of the business/service, then I get a .com. If it's a local mon'n'pop store, then def a .ca
Sure it happens, but I would imagine a sizable portion of the people typing in the domain are people like you and me seeing if somebody owns the domain, and who it is.
I do not think Yellow Pages is going to be relying on a ppc page.
I own/manage lots of .ca domains, like you probably do as well, and they really do not generate much revenue or traffic (except for the pure ecommerce sites).
One never knows how this will work out but I going with the above hunch as a reasonable calculation of future behavior . . . and I don't :( have any .CA domains.
That company is likely swimming in cash, I think they are a income trust if I remember correctly and the only competition they have in this corner of Canada has just surrendered.
Simpler words like maps and lawyers make more sense. I've seen an upsurge in advertising of simple keyword domain names lately.
The ones I saw were things like "hotelsnearinlaws", and stuff that related to a situation shown on the billboard.
Yes, that's the ones I was talking about. I've seen those too. I liked them. I think they are silly-interesting :)
There are only about 32 million Canadians! That means they spent about $.08 per Canadian just to own those domains. Just think how many Canadians don't have internet access or don't type in domains. That may be a hard to recoup investment.
They will likely get a lot of traffic but I bet it will mostly be from their own advertising. They could have likely bought most of those domains with a "yellow-" prefix for $10 a pop and people would have just as easily remembered the names. They could have bought 10 times as many domains doing that and likely had more traffic!
These domains are easily worth more than $6,000 each. I've sold .ca domains for close to that amount which were not even close to the quality of these ones.
Equivalent versions of .de domains easily sell for at least 5 figures. $2.5 million for the emall portfolio is a steal.
$2.5 Million is peanuts for YP. It's one of the hold-out profitable spinoffs from the TelCo breakup of the 90s. YP advertising has continuously been highly profitable for the publisher, and will likely remain so for the forseeable future.
They can also get good cross-over advertising and revenue from this. Want a quarter page ad in the YP? Price X. Want a comparable ad on the website hotels.ca with a clickable link to your own website? Well, that will merely double the cost.
And advertisers will pay it. Because they have a longstanding relationship with YP, and they trust it's ability to deliver customers. That's something a run-of-the-mill website owner doesn't have. A longstanding (in some cases decades long) relationship with advertisers with proven success.
If they can work up decent sites, and a good revenue model, then nobody will have the ability to monetize the domains like YP can.
With their existing customer base, which is massive beyond belief, if they can even tap a small fraction of those customers into paying for web-space ads, they could turn a profit on the whole deal in less than a year.
If anything, I would expect to see more play for top quality domain names from YP in the future. They have the capital to go for it, and good incentive to do it.
There are only about 32 million Canadians! That means they spent about $.08 per Canadian just to own those domains.
What about those thick-a$$ YP books they deliver for free to every house hold? I think the book is over 1000 pages, many of which are in color. And they do it year to year. Domains cost nothing compared to that!
That whole thing is paid for by the advertisers, which is very expensive.
Just think how many Canadians don't have internet access
Canadians are among the world leaders in Internet penetration and high-speed access.
We don't all live in igloos and hunt seals for a living you know.
All I care is how they got away with buying domains in industries they are not involved with. There are specific rules about *.ca domains and squatting is one of the things that is banned.
What Yellow Pages did is not squatting. Squatting is when you buy a domain with someone's trademark and try to sell it back to them. Yellow Pages bought generic domain names, like autos.ca, which is now being redirected to the Yellow Pages site. There is nothing wrong with that. It is not squatting. Actually it is a very smart thing to do.
What would be even smarter is for them to be redirecting to the actual category, i.e. autos.ca should redirect to the automotive category. But I'm sure they have bigger plans for these domains than just simple redirects.
Canadians are among the world leaders in Internet penetration and high-speed access.We don't all live in igloos and hunt seals for a living you know.
OK, I did a search on "high speed internet usage by country" and found about 68% of population has broadband access in the home. Still, 68% of 32M is shy of 22 million people. That's not a lot of bodies. While they don't have as deep an online penetration, these countries have even larger populations.
Algeria 33M
Argentina 38M
Brazil 184M
Colombia 46M
Egypt 71M
Kenya 34M
Mexico 105M
Poland 38M
Turkey 75M
As far as the 2nd line, I'm familiar with Canadian industry. I know they also hunt polar bears and moose.
Direct Navigation - part 2
Ultimately search may be dominated by Adsense/SEO pages or become a situation where every business has a web site(i.e. fax machine) and everyone's site is listed in the SERPS so a search on a generic item or service will return hundreds of 1,000s perhaps millions of hits for legitimate sites.
At that point the searcher may give up after 10 or more searches and just try the direct nav method by entering doctors.ca or doctors.com or miamidoctor.com or whatever but I think .com is key for US based searches and Canadians will have to be made aware to try the generic.CA - which can be done in a relativity short time.
The path of least resistance is one always most well worn.
[edited by: Webwork at 4:43 pm (utc) on May 21, 2006]
[edit reason] The more generic the "example" the better. Thanks. [/edit]
While they don't have as deep an online penetration, these countries have even larger populations.
Algeria 33M
Argentina 38M
Brazil 184M
Colombia 46M
Egypt 71M
Kenya 34M
Mexico 105M
Poland 38M
Turkey 75M
Tell ya what, you sell to those countries (which most smart merchants just block automatically from ordering) and I'll stick to selling to a measly 22 million Canadians ;)
$2.5 million is peanuts for these kind of companies: the CEO often earns that in one year.
