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DomainMart Finds Direct Navigation Hubris

DomainMart, a leading provider of quantitative and analytical domain-name services, released today a study that contradicts prior claims that direct navigation generates higher returns for advertisers and publishers.



The study performs two separate tests for the significance of type-ins. The first is based on whether the volume of type-ins is a statistically significant factor impacting the value of the 's8220;.com's8221; domain name that comprises the keyword. The second test is based on whether type-ins increase the monetization revenue of parked domain names, holding other factors constant.



The first text is based on DomainMart's8217;s appraisal model. The test results suggest that the type-in factor is irrelevant in predicting the value of a domain name.



As for the second test, the study uses Total Revenue (TR) of a parked domain name, as measured by the PPC rate for the keyword multiplied by its click volume. The study uses both Google and Overture data in a tree-structure regression of TR on the rest of the explanatory variables used in our appraisal model. The proxy used for type-ins is the ratio of search volume of the keyword domain name (i.e., when the 's8220;.com's8221; is included as part of the search keyword) to total keyword-only search volume. The search volume data is obtained from Overture. Thus, a large ratio represents greater type-in traffic. Once again, the study finds no significant contribution of type-ins.



's8220;This is the first statistical study on direct navigation and it refutes the widely held view that direct navigation produces a higher rate of return for investors,'s8221; says Alex Tajirian, CEO of DomainMart.



Tajirian also makes the following notes:



1.    
The study does not demonstrate the irrelevance of direct navigation. Rather it shows that there are other factors that are more important in determining the revenue associated with direct navigation.



2.    
The proxies TR (for a domain name's8217;s monetization revenue) and the type-ins ratio include measurement error. However, the presence of measurement error underscore the need for robust statistical estimation techniques to determine the significant factors influencing revenue and their explanatory power, as well as in appraisals.



3.    
Understanding revenue drivers leads to better monetization optimization.



About DomainMart

DomainMart is an industry leader in providing domain-name secondary-market products and consulting services, including appraisal, escrow, private investment management funds, protection, valuation, and parking traffic monetization management since 1996.



For more information, please visit http://www.domainmart.com/news/Direct_Navigation_Hubris.htm or contact:



Tom Saitori, Marketing Specialist

DomainMart

Tel: +1 (415) 905-4234

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