The idea with Demand was to marry two businesses: domain name registration and low-cost content production. The foundations were the acquisitions of eHow.com, a provider of how-to tutorials, and eNom, a domain-name registration service provider.
Early on, Demand used eNom’s 1 million generic domain names such as “3d-blurayplayers-com” to serve up relevant ads to people searching for specific topics. These “domain parking” pages were immensely profitable, generating north of $100,000 per day, according to a former Demand exec who requested anonymity. “That’s $35 million-$40 million per year without doing any work,” the exec said.
But the tactic was fundamentally a bait-and-switch. Users landed on the pages expecting to find information on a subject and instead found an ad. To try to drive up traffic, Demand shifted its strategy, populating the sites with thematically related content. Counterintuitively, though, that decreased ad click-through, since people were reading the articles instead of the ads, according to the former executive.