I was telling the marketing director of a large hosting company that if I were him, I'd try to cross sell books from Amazon. If someone signs up to build an online store, don't you think they'd be interested in SEO? Or if they're getting a dedicated server, maybe they'd find the Linux Troubleshooting Bible helpful?
A few days after that conversation, I got an email from Amazon: "we noticed you purchased an ecommerce related book in the past and we thought you might be interested in an exciting new product from Amazon Services, WebStore by Amazon." Wow.
Coming soon: "we noticed you performed a search for Ruby on Rails; at EC2, you can get the entire Nginx/Apache/Mongrel/MySQL stack in one ready-to-deploy appliance." Or: "we noticed there's a disaster recovery book on your wish list. If you sign up for S3, we'll ship it out today at no cost!" Just you wait; it could happen!
So if you're one of the many people who've told me that Amazon is "not a hosting company", you might be right. At the same time, Amazon isn't a bookselling company either. Instead, it's kind of like a Möbius strip, which has one continuous outer surface. Amazon's core competency, I think, is in observing and learning from customer behavior, and using that knowledge to put whatever products people might want right on the counter.
In contrast, after Demand Media CEO Richard Rosenblatt's HostingCon keynote, I mentioned to someone that 1&1 ought to spin off its domain registration business, merge it with Sedo, Web 2.0-enable Sedo's antiquated domain parking service, and go after the secondary domains market big time. "But 1&1 is a HOSTING COMPANY," my friend said. "They do domain registration only so that they can sell hosting." But what if customers aren't registering domains so they can buy web hosting? I'm not sure you can make a product more relevant by giving it more shelf space.
BTW, I wouldn't be surprised if Amazon got into the domains business. Check out Fabulous.com CEO Dan Warner's "Aftermarket Value Innovation" presentation (PPT), where he discusses contextual domain search. For example, if a customer searches for "chicken risotto", Fabulous will show him available domains relating to recipes, restaurants, food, etc. Now imagine Amazon taking this contextual info and auto-populating each domain with an aStore. aStores-for-domains would feature top selling products from relevant categories (dynamically updated, of course), as well as items from each visitor's wish list and search history.
Some time ago, after Google published the Efficient Frontier/AdWords for Domains case study, many domain portfolio owners complained that Google's revenue sharing algorithm doesn't adequately account for the exceptionally high ROI that type-in traffic apparently delivers. It seems aStore-for-domains might offer better incentive alignment? Remember - Amazon's auto-recommendation technology is supposedly responsible for 30% of its sales. This means aStores can extract significantly more value than pay per click ads out of each direct navigation visitor - and pass on a % of such revenues to domain owners.
Someone could setup that aStore for domains quite easily today. Maybe I will try it out. I am hesitant though because Amazon's affiliate commission structure is quite poor in my opinion. I have used their aStore in the past a little with very poor results. They have to sweeten the pot if they want to benefit from type-in traffic.
Posted by: John N | August 03, 2007 at 12:06 AM
The commission structure is quite poor for individual domain owners, but I'd imagine a large portfolio owner might be able to negotiate a better deal? Also, aStore creation would have to be automated. Wouldn't be scalable to build manually if you have lots of domain names.
Posted by: Isabel Wang | August 03, 2007 at 12:18 AM
I just built a test aStore in about 15 minutes. I agree it would have to be automated but that seems easy enough: http://astore.amazon.com/nigrous-20/
I think a similar idea is to use shopping.com's API which provides PPC instead of CPA payouts. I have seen companies doing this same now on a large scale. Here is one that just got funding: domainer.com. I don't know much about them, but it looks like they manually accept domain names on a case by case basis and then setup the complete web site using shopping.com's API.
Fabulous seems to have the tools to enable this on a larger scale with the contextual information they have on domain names. Maybe they will build these "smarter" parked pages leveraging this technology.
Posted by: John N | August 03, 2007 at 01:14 AM
I set up a Fabulous account a few days ago. Their interface is pretty fabulous :) Great prices for domain registration, too. Their parked pages are still PPC, but wouldn't be surprised to see their system evolve.
Posted by: Isabel Wang | August 03, 2007 at 11:59 AM
At rackAID we used to run a newsletter with book reviews. We put an amazon link in the newsletter for the book we reviewed. For good titles, we would see at least one purchase within 5 days after our newsletter went out. Now keep in mind, there were only 300 subscribers.
This was more of an experiment than anything, but what it demonstrated is that an IT management firm can sell books if they are relevant to their clients.
Now consider a large shared hosting provider with a 100K user mailing list. If you had just a tenth of a percent convert, that is 100 books sold. Maybe you earn $2.00/book. That's $200 per mailing ... equivalent to 30 shared hosting accounts.
Posted by: Jeff Huckaby | August 06, 2007 at 01:36 PM