Monday, March 17, 2008

Internet Real Estate launches sites with simple names

By Christopher Calnan

What's in a name? Business, and in some cases of popular Internet domains -- big business. At least, that is what one Boston company hopes.

Search engines may be the popular method for most people to locate information on the web. But 7-year-old Internet Real Estate Group has grown its business model on users who forego the gaggle of Googles and go straight to the URL, or universal resource locator, that serves as a website's address.

The Internet Real Estate Group's business is based on a practice known as direct navigation, in which users type generic, common names such as software.com, to find information online.

But unlike cybersquatters that target domain names solely to profit from a trademark belonging to someone else, the Internet Real Estate Group launches generic sites complete with content.

For instance, the most recent is Sweepstakes.com, which was launched in November 2007. This latest web-based business of Internet Real Estate Company operates its own sweepstakes three times a week, CEO Matthew Ross said. Sweepstakes.com shares its Boston office space with its Internet Real Estate parent and is working toward operating sweepstakes for corporate customers, he said.

Sweepstakes.com generates revenue from advertising combined with sales of the information it collects from users who register to play, Ross said.

"We do sweepstakes to collect data that would help advertisers," he said. "Advertisers want to get in front of people interested in what they have."

Jeremiah Johnston, COO of Sedo, a Cambridge-based broker whose name is an acronym for "Search Engine for Domain Offers," said direct navigation has become more common over the last five years. Consequently, names that make direct navigation possible have become more valuable.

One Sedo client, an Illinois company, changed its domain name from T-shirts.com to Tees.com and now generates 17,000 unique visitors a month, Johnston said.

"Smaller businesses are realizing that they can leverage these same kind of natural traffic assets with descriptive names," he said.

Despite direct navigation, search engines, mostly Google, remain the most common starting point for the typical user, said Jeremy Crane, senior consultant for operations and technology of Compete Inc. Consequently, owners of such websites need to own and run thousands of them to accumulate the traffic needed to generate major amounts of revenue, he said.

Sweepstakes.com is one of 18 in the Internet Real Estate Group's portfolio of dot-coms. Curiously, the business model was born from disaster.

Internet Real Estate Group's CEO Mike Zapolin founded the company after his former company, Computer.com Inc., imploded after infamously spending $3 million of the company's $5.8 million in venture capital on three, 30-second Super Bowl commercials in 2000. (His partner Mike Ford last year launched TownConnect Inc., a Maynard company operating a website for suburban families to create their own social networks.)

At Sweepstakes.com, Ross said a strong domain name provides the same advantages of a good location when buying real estate.

"It has a natural value in the traffic it drives," he said. "You're on Main Street, not on Fourth Avenue someplace."