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Former MySpace Chairman buys domain registrar eNom

A start-up headed by former MySpace.com chairman Richard Rosenblatt has bought domain registrar eNom, Inc., and is preparing a major push into domain-based advertising and commerce.

The Wall Street fatcats ponied up $120 million for Mr. Rosenblatt to acquire eNom and a portfolio of 150,000 names. Apparently they want to take advantage of what the article I read calls the trifecta: a surge in new domain registration, rising prices for resold domains and growing revenue from domain-based advertising.

eNom is the third-largest domain registrar with more than 6.4 million names under management. What is less widely known is that eNom is also the world’s fifth-largest web hosting provider as measured by active sites – hostnames that contain content and thus are likely to be developed web sites generating hosting revenue each month. eNom hosts nearly 750,000 active sites, offering shared hosting plans priced at $7.80 a month.

There are interesting components of the domain industry that when properly put together can provide a very compelling platform for the next generation of media companies,” said Rosenblatt. “Direct navigation traffic, combined with specific proprietary content and innovative marketing will unlock an entirely new realm of Internet media. We look forward to working closely with the domain industry as we build Demand Media into a global media enterprise.”

I understand the concept of Direct Navigation traffic, which means typing in the domain name. I’m not sure I understand what specific proprietary content and innovative marketing mean, but we’ll see.

We need look no further than the next paragraph:

That includes “selectively acquiring portfolios of premium domains that can be developed into niche media properties,” the company said. Demand Media will focus much of its efforts on developing domains, adding relevant content rather than displaying a full page of contextual text ads, as is the common practice on domain parking services. To control costs, the company will rely on user-generated content, and has acquired eHow Inc., whiche create niche content through how-to sites and wikis that receive millions of unique visitors per month. [Emphasis added]

Interesting. Rather than just putting up a page of contextual ads for a domain parking service, they plan to use content to get people to their pages. Sort of what we all do, but on a larger scale.

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