We were huge fans of YouTube, but we are not creating content anymore because it’s simply not sustainable. YouTube is an awesome place to build a brand, but it is a horrible place to build a business.

– Jason Calacanis, who, according to the New York Times, “set off a mini-firestorm last summer when he published an article explaining why he thought YouTube’s terms were unfair”


I am not at all surprised with the upshot of this article, having once been a white hat "domainer" making a tidy living on PPC (Pay-Per-Click) advertising. For instance, a single domain name made me $2,000 per month, and I had many like this — and my investment was $6 per year domain registration fee per domain. Easy money. I say "white hat" because I was not engaged in cyber-squatting on domain names infringing on intellectual property.

Any event, there was once upon a time when Google paid quite well on PPC. Then the market started maturing and larger PPC consolidators muscled in and took the market from individual domainers. After that, the revenues to domain owners decreased rapidly due to two factors: The consolidators started to fudge the numbers, with nothing to back them up, i.e., bona-fide log files, and it became take-it-or-leave it; and Google found that PPC was a great market and took a bigger cut.

The final death knell was a migration away from parking websites with no content other than lists of "click-through" prompts, much like Google SERPS (Search Engine Result Pages) to websites with actionable content. Even then, with direct access to Google's PPC system, the cut became smaller and smaller, and Google would not support their payout with anything other than their "word", it being decided that to divulge actual proof would violate their protection of their own proprietary information.

Essentially, the owner of the asset was receiving a few pennies on the dollars Google collected.

The phenomenon as described in the article sounds a lot like a rejigging of the same business model: Let others develop it at their expense, then move the goal posts.

Sour grapes? Not in the least...I got in and got out of PPC when the gettin' was good, and then sold my best portfolio of domains for an absurdly handsome ROI.


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