Berk Sure Has A Way

Marchex bulls would lead you to believe that traffic to their domains is organic and relevant.  I am sure some of it is.

However, it appears that Marchex (or an affiliate) is abusing Google AdWords and exploiting Yahoo by arbitraging traffic.  There are ads on relatively inexpensive words on Google and that direct clickthroughs to unrelated highly monetized Marchex domains. For example, if you do a search for “Arabic” and “measurement” on Google, you will find ads linking to breastenlargementcreams and siliconimplants domains – both owned by Marchex.  Given that almost all the links on these pages are paid with high CPCs –random clickthroughs presumably pump up revenue.

In the screenshots below taken on 11/29/05, see the 4th paid listing on right for “Arabic” and the 2nd and 6th listings for the keyword “measurement”.  Those link to the two Marchex domains with highly monetized Yahoo! keywords.

Hmmm…

I suspect Google would not be pleased with how irrelevant these results are for those terms.  Even more so, I would guess Yahoo! wouldn’t be happy to be sending low quality, irrelevant clicks to their high paying advertisers.  I plan to email some folks at both companies to get their thoughts.

As a Google user and especially as a Yahoo advertiser, I find this very disturbing.  Who knows how much revenue is being generated by these tactics… but it is clearly not sustainable.  It is not organic revenue.  It is likely not even allowed in Google and Yahoo! advertiser and publisher terms of use.

Why would the gem of Marchex’s business need to rely on such sketchy and desperate behavior?  Potential questions:

1. Is the domains business hard to grow? Is this a way to boost revenue on the sly?

2. Is the domains business as profitable as bulls say? How much are they spending on traffic acquisition?

I own puts on MCHX at various prices.