Along with the 200 web sites and the big domain names, like hockey.com, that it eagerly publicized, Geosign also owns — through a subsidiary or associated company by the name of NYCGroup.com — some 90,000 other domain names including thefart.com, canadianrockiestour.info and myrtlebeachresortdirectory.com. Performing a “who is” search on these sites shows they are affiliated with NYCGroup, although it is not always made clear that NYCGroup is connected to Geosign.
Geosign drove traffic to these sites by buying cheap Google ads. The sites are designed in a similar manner with no ads on the landing page, which functions as kind of index. To get off these landing pages many visitors opt for the simplest method and minimal mouse action, namely clicking on one of the links, which brings them to a second page filled with more expensive Yahoo ads or “sponsored results.”
Every click on these pay per click ads earns Geosign money, a business that can be profitable with as few as 10 visits a day per page. Given the number of domains Geosign owns, it had a perfect long tail speculative business. If it gets 20 cents for every click with 10 clicks on every site times 90,000 sites, that’s $5.4 million in a month and all it has to do is pay the next-to-nothing overhead for a bunch of spam or so-called made-for-advertising sites.
Google’s and Yahoo’s roles
Google has stricter rules regarding made for advertising sites than Yahoo, which may explain why Geosign displayed and continues to display Yahoo ads. While these sites are cash cows for both Google and Yahoo in the short term, they have caused enough damage to the credibility of online advertising that Google realizes they are not necessarily in its longer term interest. Neither Google nor yahoo would agree to discuss the issue.
When Google recently reported second quarter earnings that fell short of expectations, John Krystynak who runs a well respected blog about online advertising wrote: “I can’t say I’m surprised at the miss, because Google eliminated a lot of advertiser spend this quarter with their ad quality improvements. In short, they kicked a lot of advertisers out of AdWords.
By focusing on the worst of the arbitrage, and made-for-adsense type sites, they took a hit. These were the sites that would basically consist of all ads, and so when a user clicked away from a Google ad, they’d go to another site, full of ads. Not the best experience. By eliminating those types of advertisers from the system, they cost themselves money in the name of ‘better’ ads.”
Of course, one of the low-quality advertisers to get the boot was Geosign.