Personally I am not a fan of mistyping a URL and getting a website consisting entirely of ads. I dont know who clicks on these ads but these virtual billboard websites make so much money, they arent likely to go away.
For These Sites, Their Best Asset Is a Good Name
May 1, 2006
The web site www.flashgames.com has no staff, spends no money on marketing and despite its name, offers no games. All it offers is a list of links to other game sites. Yet it earns revenue of more than $150,000 a year selling online ads.
Flashgames.com is just one of thousands of Web sites that are cashing in on the online advertising boom in an unusual way -- by piggybacking on the ad-sales efforts of giant search engines Google Inc. and Yahoo Inc.
These sites' ability to make lots of money for little investment is now attracting attention from big players. A group of investors led by former MySpace.com chairman Richard Rosenblatt is expected to announce today that it has raised $120 million from investors to build a new company, Demand Media Inc., centered on generic domain names like these. The venture has already acquired 150,000 domain names -- including flashgames.com -- and plans to aggressively acquire more. But, conscious of the limitations of these bare-bones sites, it plans to add some low-cost content in hopes of making the business even stronger.
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Owned until recently by two Australian entrepreneurs, flashgames.com draws people -- about 240,000 a month -- looking for a Web-based game that uses flash-animation technology. The links that the would-be gamers find on flashgames.com are actually paid ads placed by Google or Yahoo, both of which sprinkle ad links all over the Web, paying the host sites a cut of the revenue they receive when anyone clicks on one of their links. So when someone finds flashgames.com, and then clicks on a link to another games site, flashgames.com gets paid.
Analysts estimate these types of site, known as "domain parking," generate about 5% to 10% of search-engine revenue, putting the industry's annual revenue at about $600 million. "The profit margins are extraordinary," says RBC Capital Markets analyst Jordan Rohan. He predicts industry revenue could double to $1.2 billion within three years.
