Why ask the “difficult questions”? Well, quite simply, the difficult questions are the ones that need asking. Pretending something doesn’t exist doesn’t make it go away.

I have seen a number of positive, virtually promotional posts about dnZoom in the domain space over the past few months. Since dnZoom works with domain industry vendors via their APIs, it is understandable that domain industry players would be supportive of the company and it’s efforts. It’s a good, honest try at doing something good. Since all domainers (this one included) could benefit from a feature-rich, centralized management system for domains, the dnZoom concept is very welcomed among individuals, too. And since it seems the dnZoom people are very likeable, again, good reason for positive support. And it is now in public beta, which means it made it out of private beta, which is a very good sign.

But when I went to try the beta service, I came across this in the Terms of Use agreement (I added the bolding and font sizing to make it readable, but the ALL CAPS is how they made this section of the TOS):

LIMITATION OF LIABILITY

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, strong>IN NO EVENT, AND UNDER NO THEORY OF LAW OR EQUITY, WILL DNZOOM, INC. (INCLUDING, WITHOUT LIMITATION, DNZOOM, INC.’S EXECUTIVES, DIRECTORS, OFFICERS, ATTORNEYS, MANAGERS, EMPLOYEES, CONSULTANTS, CONTRACTORS, AGENTS, PARENT COMPANIES, SUBSIDIARIES, AFFILIATES, THIRD-PARTY PROVIDERS, MERCHANTS, LICENSORS, OR THE LIKE) OR ANYONE ELSE INVOLVED IN CREATING, PRODUCING, OR DISTRIBUTING DNZOOM, INC.’S SERVICES, BE LIABLE FOR THE LOSS OF A DOMAIN NAME, OR ANY BUSINESS OR PERSONAL LOSS, REVENUES DECREASE, EXPENSES INCREASE, COSTS OF SUBSTITUTE PRODUCTS AND/OR DNZOOM, INC. SERVICES, OR ANY OTHER LOSS OR DAMAGE WHATSOEVER, OR FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES OF ANY KIND ARISING OUT OF ANY USE OF, OR ANY INABILITY TO USE, ANY DNZOOM, INC. SERVICES EVEN IF DNZOOM, INC. HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. DNZOOM, INC.’S TOTAL CUMULATIVE LIABILITY, IF ANY, TO CUSTOMER, OR ANY THIRD PARTY, FOR ANY AND ALL DAMAGES, RELATED TO THE TOU OR DNZOOM, INC.’S SERVICES, INCLUDING, WITHOUT LIMITATION, THOSE FROM ANY NEGLIGENCE, ANY ACT OR OMISSION BY DNZOOM, INC. OR DNZOOM, INC.’S REPRESENTATIVES, OR UNDER ANY OTHER THEORY OF LAW OR EQUITY, WILL BE LIMITED TO, AND WILL NOT EXCEED, THE ACTUAL DOLLAR AMOUNT PAID BY THE CUSTOMER FOR THE SERVICES WHICH GAVE RISE TO SUCH DAMAGES, LOSSES AND CAUSES OF ACTIONS DURING THE 3-MONTH PERIOD PRIOR TO THE DATE THE DAMAGE OR LOSS OCCURRED OR THE CAUSE OF ACTION AROSE.

So there’s the clue to the “difficult question” that needs to be asked. In these days of rising domain values and increasing challenges to protecting domain assets from misappropriation, can I afford to “trust” my domains to a third party management system if I have to agree to almost complete indemnity for them in the case of error or loss, even if they knew of the problem and didn’t fix it?

This agreement says that dnZoom will not be held accountable for anything more than the cost of the dnZoom service. I am not a lawyer, but by my read it says if they get hacked or the system screws up or they have a rogue employee and I end up losing a domain, dnZoom is only liable for the cost of the dnZoom service (currently nothing). Ditto if they make a mistake that costs me a domain, or anything at all that might happen, for that matter.

I have to indemnify them completely for all possibilities. Is this the best we can do when providing a centralized management service for domains, and if so, is it ready for prime time adoption?

I have to ask myself, “If there is enough risk associated with such a centralized system that they need to build in that all-capitalized indemnity clause to protect themselves, don’t I as a domainer have an equal obligation to protect myself?”

And how could I do that? Maybe I am missing something. Maybe I should have some other insurance in place, or some other way of covering myself for a problem arising from the use of a central system like this, so do let me know if you have such knowledge. I am only concerned because they built that clause into their agreement… otherwise, I was about to trust it with a free trial.

Unfortunately this post will probably get me dropped from a few blog rolls, and hurt my chances of getting a free pass to the next domaining event (or even an invitation, I imagine), but that’s ok. I’m more comfortable honestly asking difficult questions than keeping quiet when I feel like there’s a problem lurking. I’m really hoping someone can show me it’s just legalease and nothing to actually worry about?

Yes, I did suggest that affiliate marketing is an upcoming opportunity. No, I am not crazy. But I may have been crazy to assume some of the evolution of affiliate marketing was obvious, because it is apparently not obvious to everyone. What about YOU? Do you, or even can you recognize today’s evolved affiliate marketers?

Affiliate Marketing is the endeavor of partnering with companies to deliver conversions to their commerce engines, whatever those are for that vendor. As an affiliate you assume a responsibility for reaching a market, under a set of guidelines that often includes restrictions. Success is rewarded via a performance model (a commission on sales, a per-signup payment, or a percentage of recurring sales for example). A vendor may decide to bring on affiliates to approach a new untested market, rather than extend its own established marketing efforts in that direction at this time. Those affiliates go after the previously untapped traffic opportunity and deliver it to some engine set up by the vendor to convert (or at least try to convert) it. The affiliate marketing model is very simple, yet not as simple as some might think. There is a lot of business behind that model, and a good deal of opportunity beyond the obvious “get other people to promote our product and send us leads“.

It used to be that affiliate marketers were very simple-minded partners. They signed up and promoted affiliate links, sending traffic to the vendor’s landing page. Each month the vendor tallied up the sales assigned to that traffic, and cut a check to the affiliate for the commission. Networks like Commission Junction and Link Share started with that model, aggregating affiliate marketing opportunities under one management umbrella. Many, many web publishers still follow that model. But that is NOT what I referred to as Today’s Affiliate, and that is not the affiliate marketing model I suggested is evolving and looks like a real opportunity going forward…well, it is, actually, but not exactly. Not as that looks on the face of it. I suppose it USED TO BE, but has evolved. Have you evolved with it?

In case you missed it, the web has grown up. If you are still publishing pages and inserting affiliate product links as a way of existing as an “affiliate marketer”, I suspect you missed a good deal of the business that is the Internet. Time to catch up. To start, let’s see if you can recognize how your affiliate marketing skills fit into a modern monetization effort you may not recognize as affiliate marketing. Take a look at utest.com, currently promoted on TechCrunch and other places as a new startup applying crowd sourcing to the problem of software testing.

UTest.com gathers a social community to test software for “bugs”. Users who find bugs get paid (on a per bug basis) for their efforts. “WHAT A GREAT IDEA!” shouts the over-caffeinated Web Too blogosphere. According to UTest, the market for bug-finding is billions big. According to TechCrunch:

…recruiting a userbase of testers should not be difficult. There are droves of potential testers in countries such as India, China, Russia, Bulgaria, Estonia, etc. Also, getting hired through sites like oDesk, Elance and RentACoder is becoming increasingly difficult due to the growing number of service providers. These same individuals can theoretically provide testing services instead of programming.

Do YOU see the opportunity for affiliate marketing in UTest.com?

Notice the most obvious… payments to bug testers will be made via a “uTest Debit card” which is a fee-based credit card. You pay $10 to get a card, so that you can get paid. That’s right, if you want to get paid, you have to participate in a non-free credit card program. Did you know credit card affiliate programs pay $50, $80, $125 and even as much as $200 per sign up? If you have ever participated in credit card programs you know that there are fees associated with them… per transaction, per deposit, annual renewal, ATM use, virtual card number accounts, the float on the required minimum balance, etc. All opportunities for monetization.

As a credit card affiliate, you would know how those fees can be adjusted over time to impact profitability, right? Payoneer is… get ready for it… an affiliate of MasterCard. Starting to understand? I have one of these online debit cards from an affiliate program I joined years ago. It was free… fee paid by the affiliate program. Now it costs me $35 per year. Transactions were paid by the affiliate program… but now cost me $2.50 each. ATM withdrawals were free up to a daily limit, with a maximum number of allowable withdrawls per month. There is a now an ATM fee, and all of the limits are lower. It used to have a free virtual credit card associated with it, which I could managed on line. That is now available for a separate annual fee, with a separate set of restrictions on use. I still have that account, and I pay all those fees, because this thing is damn convenient. I never would have accepted it initially had I known the expenses associated with the convenience. And the vendors involved know exactly how much money I have been making as a Super Affiliate of the programs that pay out through that card (an amount which, coincidentally I’m sure, has been declining over time as that market has become more competitive). I’m hoping you get the idea.

Less obvious than something like the financial float on the debit card (the interest earned on all of those dollars sitting in the accounts as the “minimum balance required”) is the good will effort float. That is the value of the unpaid activity contributed by participants in the community like uTest. If you have ever developed good software, you know that most “bugs” are discovered in development, because testing is performed at every step of the development process. True software development includes concurrent software test development. While every “bug” found is not necessarily fixable right away, it is addressable. It can be considered for risk management… some need to be fixed immediately, others need to be evaluated for the value of fixing now versus later. Many known “issues” are put off to “the next revision”.

So true unknwon software bugs are not as common as might be believed by those who have not been through that process. And uTest pays for BUGS. In other words, every time you find something wrong, it is not necessrly a bug and won’t necessarily involve a payment. Your discovery of the “glitch” and your reporting of the particulars of your discovery (browser used, conditions to reproduce, entry into bug tracking database, etc) has significant value to the software developer, but doesn’t have any value at all to you because it won’t earn a payment. See the opportunity? You work, they get the value. I can see the testimonials now… “I reported a bug in WebTooSoftwareBeta and got $100! from the uTest program. Sweet!” No mention of the 120 hours spent documenting 47 glitches which in the end were already known, or considered collateral effects of an already known bug, and worthy of zero compensation.

Still less obvious but revealed by the TechCrunch observation is the opportunity for global outsourcing. While the Web Too crowd says “neeto!” and dreams of getting paid to fly the next Firefox alpha on their new Mac (turning their Cinema Display into a tax deduction), the world’s outsourced workforce lines up to turn those dollars into pennies. Numerous affiliate opportunities exist in the outsourcing market as well as the labor market. American’s signing on with dreams of earning money testing software are targets for numerous old-school affiliate marketing offers in the job world, the tech world, the work-from-home world, the education and training markets, etc. Hit them with University of Pheonix offers before they realize they can’t compete with workers in India doing manual software testing, right? But collect those email addresses and demographic data… what kind of computers they have, how often they log in, because the modern affiliate opportunities will value that very much. Seen the latest valuations of Facebook? All because they know about you and have your attention.

Affiliate marketing is not what it used to be. uTest is a real business, and I don’t mean to suggest otherwise, but rather to use it as a (fictitious?) example of what modern affiliate marketing looks like. That TechCrunch promotion of uTest? Affiliate marketing, no? What was that worth? How would that get negotiated, and paid? Business, baby. The Internet? It’s bidness, baby, as my New Joisey friends would say. (Update: the CEO of uTest.com has commented…see below)
I just got an email offering me a 50% discount on a conference registration I would normally go to, if i sign up using the affiliate code. What will that pay out to the marketer? Well, the commission on a $2000 reg fee probably started at $800 and with the 50% discount applied it’s probably now worth $200 or so to the marketer. The old-style affiliate marketers are now touting such “big ticket opportunities” as the way to get rich in affiliate marketing. Truth is, we’ve evolved. The uTest community is just one example of spending a million dollars of other people’s money to build something that will monetize beyond tens of millions as a defensible business, via numerous avenues, using nothing more than the same web technologies, social media, search engine marketing, and clever monetization tactics YOU have been using for years as a small-time affiliate marketer. It doesn’t have to start that big… most of these started small as an earlier incarnation of the same innovative affiliate marketing vision… a modern affiliate marketing vision not concerned with debates about the value of reciprocal links or the potential to sell $49 ebooks, link to 5% payouts from Amazon.com or even $300 last-minute conference registrations.

Perhaps most telling about the future of affiliated marketing is this here post. As I look back and scan for typos, I am cognizant that well-known Internet marketers will gasp at the density of this post. No pictures… tsk tsk. Too long. Too many words and sentences. Too many ideas for one post. Not search optimized; doesn’t prompt the reader to act on a click; too abstract for the common reader; not “diggable”; won’t get bookmarked etc. And I don’t care. I don’t care about any of that old-fashioned stuff, because relative to the bigger mission they don’t matter. I’ve got a different target in mind, and it’s got nothing to do with $0.35 AdSense clicks or $45 affiliate payouts or even $500 sponsored blog post payments. Yes, it involves SEO and search marketing and modern affiliate marketing. And those who are my targets, know exactly what I mean. Which is all that matters, right?

Update: Received a communication from Doron Reuveni, the CEO of uTest, regarding uTest’s status as an affiliate.

Doron Reuveni wrote:

Hi John,

I am the CEO of uTest Inc. A company mentioned in your affiliate marketing article. Wanted to set the record straight and let you know that uTest is focused only on application QA and testing and is not involved in any affiliate program . We chose the debit card approach since this proved to be the most cost effective way to pay our GLOBAL community of testers. Due to the high demand from our testers we will also be offering Paypal as an alternate option for payment in our next release. You should also be aware that we actually subsidize for our testers the loading fees and mailing fees associated with the Payoneer Mastercard debit card.

You can read the exact details on our blog http://blog.utest.com/ I would appreciate if you will mention this comment in your blog.

Thank You
Doron

Since I registered to attend AffiliateSummit in Vegas and commented about the alignment of Affiliate Summit and T.R.A.F.F.I.C. in the same city at almost the same time, I have heard feedback from domainers, affiliates, and SEOs about both events and domain auctions in general. I wonder now, is the domain auction at Affiliate Summit a sleeper opportunity for domain acquisition? … or not?

In July of last year, Moniker held the first domain auction at Affiliate Summit. There were many domain auctions last summer, so the general crowd of domainers+entrepreneurs+search marketers enjoyed frequent access to domain buying via auction. The Affiliate Summit crowd was probably mostly affiliate system employees and affiliate marketers plus some search marketers, crossing over to the community of domainers. DomainNameNews covered the auction, and the auction was apparently a dud, and apparently for the expected reasons:

• affiliates develop traffic and revenue first, and sites second if they bother at all
• affiliates and search marketers desire domains which match their marketing strategy which is typically also their business strategy, as opposed to domains which match a category. Sure those overlap, but not as much as may be initially thought
• affiliate marketers are used to bootstrapping online businesses, ramping them up as they show signs of promise. They don’t typically start with an up front investment, such as an investment in a domain name as an asset
• a substantial portion of affiliate marketing is opportunity-driven. High-prices for domains (when compared to reg fee) do not automatically appear to represent opportunity to affiliate marketers

Moniker published the results of that Affiliate Summit Domain Auction here. I don’t know which domains listed were sold live at the Affiliate meeting vs. over the phone to domain investors or companies desiring specific domains listed for sale, but I can see the character of affiliate marketing reflected in the SOLD list.:

• Funeralparlor.com ($3,000)
• prescriptionmedication.com($40,000)
• DiscountCollegeBooks.com($2,500)
• AffiliateDirectory.com($30,000)
• DiscountFlowerShop.com($2,000)
• CruiseInformation.com($5,500)
• GolfInformation.com($4,500)
• LAWYERBLOG.COM($1,500)
• PaycheckServices.com($1,500)
• guaranteedcollegeloan.com($1,000)
• lowinterestgovernmentloan.com($750)
• achievementtests.com($3,250)
• homeequitydebtconsolidation.com($700)
• badcreditsecondmortgages.com($200)

These are typical affiliate and search marketing domains. Except for a few, they sold at reasonable prices (sub $4k).

As unregistered domains get harder to find, entrepreneurs are increasingly willing to value a domain at $1500 these days. Another $1,000 can be rationalized for a quick buy, as the costs of finding a suitable domain can easily exceed that when time and effort are considered. But, as noted, most affiliate marketers bootstrap their businesses and do not count time and effort at a straight cost rate. In fact, because a good deal of the affiliate business is opportunity driven as opposed to strategically driven, projects are commonly “back burnered” until the time is right (which may include “finding the perfect domain name” for the project). I am not surprised the auction didn’t produce more sales greater than $5k. But now, in February of 2008, I wonder if things will be different?

• It is even harder now to “find” a suitable domain for a project at reg fee.
• The affiliate marketplace seems more sophisticated today, since some of the uncertainties of the affiliate networks have been settled (good or bad).
• More of the active affiliates have advanced their operations beyond the “place some links and wait for checks” mentality of the past.
• More marketers realize the value of more borad involvement in a market niche, which may mean more contro lof the category which might be achieved with more category-influencing domains

In my own experience, a reasonable price for the right project domain is more now than it was last summer, perhaps twice as high, touching on the $3k mark. The effort costs are also higher now, so $5k is not as high a price as it probably seemed last summer. Again, the domains offered will have to match the profile of domains desired by affiliate marketers if they expect to sell, but then Moniker has Affiliate Summit experience now, so might that be a reasonable expectation?

I’m curious how this one will go. Given the last experience, will even more domains be no reserve this time? That would be an opportunity. Given the experience, will more suitable domains be presented this time? Given that affiliate marketers got to see domains sold for thousands at auction, will they be more likely to participate as sellers this time (which might mean more suitable domains on auction)?

I still have trouble with the whole domain auction thing, though. For example, to submit names for sale at the affiliate auction, you would have had to send them in as candidates for consideration back in December. For an opportunity driven industry like Affiliate Marketing, that doesn’t work so well. I know it takes time to manage the FOR SALE AT AUCTION list, but it would probably be cool (and productive) to have a way to insert domains up until the last minute as holders of domains attractive to the AffiliateSummit community decide “yeah, this is looking promising… I’m in“. With a long lead time to domain insertion, you’re basically only listing properties held by domainers, or properties no one has wanted despite several months of availability. It might also be great to market the domain insertion process to the affiliate marketing community much more and in advance, to get a better match of domains offered to domains wanted. Just an idea.

I will be speaking at SearchFest in Portland on March 10th, and decided to present “Search Marketing and YOUR Business Strategy” specifically because I think Internet entrepreneurs would benefit from increased emphasis on this aspect of online marketing: like SEO, the domain needs to support the business strategy first, not the market strategy, because the marketing strategy increasingly is the business strategy (and is evolving that way).

Note to Google: Hi Matt (third person plural intended). Just in case you were wondering, or even if you have already made up your mind about imparting intent to my outbound links here, they are not “paid links”. Even the ones where I created an href with my domain in it (e.g. affiliatesummit.com/johnon.com) are not “affiliate links” or “sponsored links”. There is no such linking structure for AffiliateSummit that I know of, and I haven’t signed on to get any commission anyway. I did that so they would see me in their logs (and yes, I tested first to see how they handled 404’s). Oh, and that SMX link? The one that looks like searchmarketingexpo.com/west/?yourwelcome=johnon.com ? Same thing… they don’t manage their 404s over there, so I had to put my secret message to Danny into a query string to get it to work properly. See? You’re not always right :-) I know, I know… you don’t really care. But I do, so I’m just sayin, thazzall.

In the domain industry, the auction is the place to get the best price for your domain. You read that just about everywhere. Auction, auction, auction. But the auction is not always the best answer. We need some more options.

Every week it seems I hear someone say they submitted X domains to “the auction” and none were accepted. So what then? The domain marketplaces are saturated with domains available for purchase. Frankly speaking, the user interfaces of the aftermarket marketplaces leave a lot to be desired. Even those marketplaces like to push the domains into an auction as soon as anyone expresses interest, making domain acquisition seem ever more elusive for the non-professional domainer (”this domain is available for a starting price of $1000“, but it has a secret reserve of $4500. Been there, done that).

I have learned that a “buy this domain” or “this domain may be available for purchase” link on the home page does work, for the same reasons direct traffic converts well: the clicker of that link has a qualified interest in the domain. The challenge is getting the domain home page (or even just the name) in front of the not-yet-qualified potential buyer. Sure some buyer’s want a specific domain that you have parked. But most just need a “good domain” for their web site project.

If domainers really want to see liquidity in the domain aftermarket, they need to lose some of the ego that is currently micro-managing the aftermarket domain sales. Have some guts and put those “not-really-generic” and “not-really-as-brandable-as-you-originally-thought” domains up for sale with no reserve. Set a price and sell, instead of set a price and fish for a higher price, reserving an option to bail at any time with no accountability. You’re not fooling anyone. People are simply not considering your domains to be available. Really. They understand you don’t really want to sell. They aren’t even looking anymore, because of the way you’ve proven the domains aren’t actually for sale.

My neighbor has a black ‘66 Chevelle SS 396 4 speed. Is it for sale? Sure… offer him enough money and he’ll sell it. But he doesn’t drive it around with a FOR SALE sign on it, because he’s not willing to part with it for the current market value. Isn’t everyone’s car technically “for sale” at a high enough price? But if we all drove around with FOR SALE signs on our cars, wouldn’t that just about void any real market for car buying?

That’s what the current domain aftermarket looks like. I hate to be the one to break it to you domainers, but the domains aren’t selling because their not worth the asking price. If the aftermarket’s want to function for buyers who want domains (and I know plenty of buyers who want domains), they need to separate the domains available “for sale” from those available “if the price is right”. Someone should do this. We need more options.

If you use Thunderbird email client and have many email accounts/folders, you will someday wish you could re-arrange them in your accounts view pane. Thunderbird by default displays the accounts in the order in which they were added, and does not provide a control panel option for re-ordering them. But there is a solution and for me, it works perfectly.

Download the FolderPaneTools Firefox extension to your hard drive, and then load it via the Extensions tool in Thunderbird. Once restarted, Thunderbird will offer simple “move higher/move lower” options for all of the email accounts in your view pane. In just minutes I had relocated my most often used accounts to the top of the pain, and then re-arranged those so the shorter ones were higher than the more complex ones, leaving me with my priority accounts visible on-page when Thunderbird loads. Awesome.

Microsoft announced it offered to buy Yahoo! for $45 billion, and the search industry is going nuts covering it. Truth is, it’s just a press release describing an offer. We are far far away from Microsoft the corporation being able to buy Yahoo! Even if it were possible (and I don’t think it is), there are so many good questions to be asked which are very difficult to answer.

I titled this “Microsoft Aims at Yahoo!” because it seems Microsoft is aiming a weapon at Yahoo!

The Microsoft Way and Yahoo! Life! are sooooo incompatible. The Yahoo! Life thing is hurting right now, and the Microsoft Machine is not and probably never will. Yahoo! is challenged by Facebook, MySpace, and just about every trendy upcomer every single day. They have to buy stuff just to stay in the game, and they haven’t even been able to integrate the stuff they bought already. Frenetic life…. crash is likely. But Microsoft? It’s like the old mainframe IBM. Slow and steady wins the race completes the race; they won the desktop– does it really matter if they never actually win anything again? Nope.

The big winner in all this is Google. Yahoo! is in play, adding to the turmoil that is the Yahoo Frenzy. Another 5 years or so of room to breath for Google to cement its monopoly. How long before the Chinese make an offer? Or the Japanese? Long Live King Google, like it or not. Unless, of course, Microsoft decides to use Yahoo! and its desktop monopoly to kill Google.

Update: There you go: Silicon Valley Recruiters Zero In On Yahoo Employees

Update: And the Chinese are speaking up, but it’s from the other side: they don’t want Microsoft to own Alibaba (39% owned by Yahoo!). How long before we see a Chinese group try and  get that back or better, control Yahoo!?