Just got an email yesterday from Parked.com announcing a new no “keyword arbitrage” policy Yahoo is sowing down their throat which in short means if publishers of Yahoo based parking domains will no longer be able to send visitors to their parked domans from Google, MSN or other low quality traffic sources such as pop-up exit type of traffic.

Dear Parked.com customers,
We were notified today by Yahoo that all Yahoo based parking companies, including Parked.com, must begin enforcing the no arbitrage/no paid traffic general provision. As a reminder, Section 2 Subsection g. in the Parked.com Terms of Service states:

“All other types of traffic including bought traffic, traffic driven by PPC campaigns, traffic directed from hyperlinks are not permitted. If your traffic originates from any sources other than type-in and search engine traffic, you will not be entitled to payment as per this Agreement. Regular checks are carried out and we reserve the right to suspend any domain from our Service at any time, on our sole discretion, if we reasonably believe that you have violated this Agreement; for example, if we suspect that the traffic on your domain is bought, generated or redirected in any way that contravenes these terms and conditions.”

For more information please see http://www.parked.com/tos/.Accordingly, all arbitrage must stop effective 1pm PST on Thursday, February 14, 2008. Even though arbitrage will no longer be allowed, all accounts will still be paid.
If you have any questions please do not hesitate to contact your account manager.
We thank you for your business and continued support.
Parked.com

The whole thing doesn’t surprise me, but the timing of the announcement by Yahoo is more than a coincidence. As Microsoft is twisting Yahoo’s arm in a battle to gain control of the company after Yahoo’s management had flatly rejected a buyout offer by Microsoft, Yahoo is trying to show its advertisers it’s serious about the quality of the visitor traffic it’s sending to their sites. Keyword arbitrage had been very good to many domainers, even those who got late into the game. The sentiment on Dnforum.com about the announcement varies a great deal from being called an outright attack on free trade to a more moderate view that what’s good for arbitragers may not be so good for Yahoo advertisers and it’s time for domainers to develop websites, instead of ripping Yahoo advertisers off.

I personally think Yahoo wanted to take this step for a long time now, but the voices of Yahoo advertisers screaming PPC fraud were drowned out by Yahoo shareholders applauding Yahoo’s relatively decent stock performance until about a year ago.

Technorati : Yahoo!, arbitrage, domain parking, ppc

There is an interesting study published by Websidestory
examining the conversion
rates at leading business to consumer websites when visitors
arrive using paid search vs. natural search methods. It’s
interesting to note the study finds visitors coming to the websites
using pay-per-click ads are 9% more likely to convert to actual buyers.
This data pretty much shatters the myth about how natural rankings
invite more clicks than pay-per-click ads and also convert better.

The study also notes the median 3.4 percent pay-per-click ads
conversion rate and the 3.13 percent conversion rate for organic search
results are not the typical conversion rates most ecommerce websites
should expect, which hovers around 2%.

“For both paid and organic search, you have highly qualified traffic
that converts far above the overall conversion rate of about 2 percent
for most e-commerce sites,” said Ali Behnam

Informationweek reports today a new search engine start up is about to challenge Googles pay per click model. This latest news comes on the heels of both Goolge and eBay announcing the testing of similar click-per-action advertsing models.
The new cost-per-action kid on the block is Jellyfish.com a privately funded technology startup up company whos got big plans to upset the current mainstream pay-per-click advertising model. It’s somewhat of a modest start for this new products search based company as it offers just over 5 million products currently from about 1,000 advertisers. The idea is simple enough, entice consumers with cash-back offers on merchandise they purchase trough Jelly fish providing they don’t return the items purchased. The cash-back amount varies based on the amount of money the merchants save by not spending it on other forms of advertising, but Jelly fish guarantees at least half of the savings are passed on to the cosumers.

What makes me wonder is when the other shopping comparison engines will start beta testing their own CPA business model. From Google’s perspective it would seem to make sense to use Froogle as the test ground for any type of pay-per-call advertising model since it already has thousands of merchants and millions of products listed. The popularity and viablitiy of Jellyfish’s business model rest in a large part on how much money the average online shopper will save using their shopping search engine. If the savings don’t materialize, the whole system is doomed to failure from the start.