Business 2.0 has an interesting story on Kevin Ham, arguably the world's most successful domain name registrant. Essentially Ham has cornered a huge chunk of internet traffic thanks to a deal he worked with the nation of Cameroon. Cameroon owns the rights to the domain (.cm) and per their agreement with Ham, route any URL that's not owned by someone to his company (a process called wildcarding); which in turn generates revenues from click-through advertising.
What's so special about Cameroon's domain? It's all about the "O" or, rather, to omission of "O." Well, if you consider that a) there are 55 million domains with ".com", b) people often misspell URLs when typing them, the numbers can be very large.
The story broadly touches on some of the more successful domain name registrants, the most famous of which is Yun Ye who sold his domain name portfolio to Marchex (MCHX) for $164 million in 2004.
If you're still unclear about what this is all about, simply type in a few random URLs and replace the '.com' with '.cm' and it'll clear itself up. For example:
- www.enterpriseirregulars.com brings up the EI site
- www.enterpriseirregulars.cm on the other hand brings up Agoga.com; which is Kevin Ham's property
If you ascribe to the efficient market theory; as an investor it's hard not to appreciate the simplicity of what Ham and his counterparts have done. Clearly the opportunities may be transient, but the money being made by these "typo squatters" is evidence of the inefficiencies that persist.
Note: This is not a
recommendation to buy or sell MCHX
or any other security, but is merely a personal analysis to foster
discussion for informational purposes only. At the time of this
writing, I and/or funds I maintain discretionary control over
did not
maintain a position (long or short) in MCHX. We
also may, at times, carry derivative options on underlying positions as
a hedge.
.cm cameroon wildcarding woodrow enterprise irregulars
Comments