Secondary Market, Pay Per Click,and Online Advertising
INTEROP Tokyo, June 2007

June, 2007

Oversee.net & DomainSponsor

Who is Oversee.net?
Founded:Early 2000 by Lawrence Ng and Fred Hsu

Business:

Technology-driven online marketing solutions¾ Domain Services¾ Marketing Services

Proprietary Technology:

Oversee is an established technological innovator

Corporate Headquarters:

Los Angeles, CA

Employees:

160

Key Partners:

Search engines (Google, Ask.com, MIVA, LookSmart),
advertisers and Internet domain name owners

Revenues:$120m +Cash flow:

PositiveInvestment:

Privately funded to date. Recently established $60m credit line

Recent News/Awards:

INTERNET AND NEW MEDIA COMPANY OF THE YEARBest Parking company 2006

Company Overview (our people make the difference)
 Leader and Pioneer in domain monetization
 Thought leaders with deep knowledge of internet

traffic patterns and performance Enabler to maximize earnings for non-revenue

producing properties
 Top notch technology and service
 Proprietary optimization techniques, searchalgorithms, business rules, data mining withperformance based objectives
 3m+ domains under management, 400m+ Unique

Visitors/Mo, 3B Page Views
 Promote Industry Best Practices, ICANN

Workshops, Domainfest

ICANN Workshopsy Marrakechy Sao Pauloy Lisbony Los Angelesy Barcelona
y Amsterdamy Hollywoody Seattle

Domain Sponsor
The Leader in Domain Monetizationz Proprietary Optimization Technologyz Semantic and Behavioral Analysis
z Dynamic Landing Pages
z Established Reputationz Participant in Robust Japanese Market
z Reliable Payoutsz Comprehensive Account Managementz Excellent Partner Support
z Superb Customer Service

Domain Industry Perspective

Total Global Domain Name Registrations
As of April 2007:
128 Million Domain Names Globally31% comprehensive increase over April 2006

45.7 Million in ccTLD
33% increase in ccTLD over April 2006

Overall, 10.7 Million Domain Names wereregistered in first quarter 2007!

Source: VeriSign, Zooknic.com

So, What are web sites doing?
.COM, .NET Web Sites



The study reveals that 87 percent resolve to a Web site, meaning that an end-user going to that domainname would find a Web site.

These sites can be further broken downzLive sites (63 percent)¾ Live Web sites are multi-page sites being used by an organization or an individual(Blogs, SMB, eCommerce, Corporate Sites, etc.)z

Parked sites (24 percent)¾ Parked Web sites are defined as one-page Web sites(Under Construction or other)zNo web Sites (13 percent)

Source: VeriSign April 2007; Zooknic.com

Domain Industry Continues to Grow!
 First time registrations remain strong in .COM, .NET
 Renewals remain strong (75%+)
 Despite Strength, Margins very low
 Registrars Diversifying their business models

The Business Model for Registrars, 1999

Traditional Registrar / Hosting Companyz Registrar with Hosting / ISP Scenario¾ Reseller or Wholesale¾ Direct End Userz Domain Name Consumer¾ for Website, Blogs, Email, FTP¾ Individual Domain Holder¾ One, maybe two domains per consumer¾ Typically sold paired with hosting service at a discount.

Customer Acquisition Costs :Expensive Loss Situation

For a hosting company,
Customer Acquisition Trial/Losscan be expensive prior to breakeven pointz Provisioning Costs¾ Domain Registration Fees
¾ Platform Licensing Feesz Colocation or Rack Costs¾ Bandwidth Costs¾ Power, Servers, etc.

z Financial Costs¾ Chargebacks¾ Merchant Fees

Domain Provisioning Costs

Domains, once registered past first 5 days
are registered for a 1 year termz It’s paid for until the anniversary datez Typically a unique domain name to individual customer
z Often has no re-use purpose

Cost / Benefit
z 76% Average Renewal
z Great method of customer acquisitionz Expanding customer baseGrowth in number of registrars
ICANN-Accredited Registrars: 1998-2007
Unit: ICANN-Accredited Registrars

950
900850800
750700650600550500450400350300250200150100500867540665388
198

157

157

162177

Dec '98 Dec '99 Dec '00 Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Apr '06 Feb '07Registrars

198

157

157

162

177

388

540665867

The Business Model for Registrars, 2006
 Competition for customers creates price wars
 Price competition creates smaller margins
 Margin decreases mean profitability issues
 Cost Continuity must be at least met by profit continuity
 Registrars get creative to revive profitability

Downward trend in registration costs
50$50.004540
3530

Registrations at anet loss to gainhosting sales

2520$19.00$15.00

15$9.95

10$8.95

$6.95
$4.00

50
Dec '98

Dec '99

Dec '00

Dec '01

Dec '02

Dec '04

Dec '05$1.99

Dec '06

Competition for Profit results in Registrar
Creativity
 New Models of Business at Registrarz Domain Suggestion Technology¾ Domain Taken? Try these suggestions…
¾ Reduced Cart Abandonment, more customersz Back Order and Registrar Drop Catching¾ Names that are available again once expired and deleted¾ First come, first served, and contractually stipulated equal access toevery registrar entity
z Registrar Parked Pages¾ Domains unused by customers are monetized by registrar:
 “Under Construction”
 “On-Hold”
 DNS not set upz Secondary Marketplace Offering¾ Auctions¾ Appraisals¾ Anonymous Offers
z Proxied or Private Whois

More Changes Happening
 Big Company Consolidations, Registrar + Advertising, Content
z Oversee.net = Domain Sponsor + Snapnames + Revenue.net +LiveDigital.com + low.com
z Others:¾ Marchex¾ Demand Media = eNom + Bulk Register + eHow
¾ Name Media = BuyDomains + YesDirect + Active Audience + GoldKey¾ SeeVast = Moniker + TrafficClub + Pulse360 + Kanoodle¾ United = Sedo + 1&1 + InternetX
All consolidated groups have large secondary market solution provider.

Domains as “real estate”
 Real Estate reference Generic domain names are those most sought Industry associations and idea leadership driving resale practices withintegrity Domain Aftermarket drives new registrations and a healthy registrar/registry
environment
 DomainSponsor is a thought leader
 Working hard to drive the integrity and best practices of the industry
 Added SnapNames to Oversee.net family of companies

Definitions
 “Secondary Marketplace”

z The active marketplace for Domain Names that are re-sold by theregistrant during their active registration term.

 “Valuation or Appraisal”

z A quantitative or qualitative approach to assigning a value beyond theregistrars initial registration or renewal price. Can be based upon
TLD, length of string, number of words, category of domain, multiples
of revenue, etc.

 “Aftermarket Service Provider”

z Can be a forum, or private broker, auctioneer, or service provider, like

Afternic, BuyDomains, Dotster, eNom, Fabulouos, NicIT, Sedo,
SnapNames.

Secondary Market has become Primary Market
There are 68,103,472 .com domains as of 6/10/2007.
 Finding a good, unregistered .com domain becomes more challenging

Yet there are great domains available in the secondary market.
 Secondary Market Providers

SnapNames, Sedo, Afternic, Moniker, Nicit, more Different Auction Types

Unsolicited, anonymous or proxy offers
Firm contacts current owners of the domains for you to purchase at reasonable pricez Standard “Highest Bid Wins” Auction Models
z Make Offer listings of domains for salez

Secondary Market on Domains

DNJournal.com Reported Domain Salesin Thousands(k), 2004 to 2007

16000
14000
12000
10000
8000
6000
4000
2000
0Using the top ten reported domain
sales at popular reporting center
DNJournal.com:
Noteworthy Sales:
Porn.com
9.5M USD (2007)
Vodka.com 3.0M USD (2006)
Tandberg.com 1.5M USD (2007)
Cameras.com 1.5M USD (2006)
Scores.com 1.2M USD (2007)

20042005

2006

2007(q2)

10150400

500

250

9180470500

295

8186600

500

300

7201600

5503506225700

550

520

5300707635940

4350750717

1000

3460800

1500

1180

2700965

3000

1500

12750

1020

7500

9500

Source: DNJournal.com Sales Reports

PPC : Registrars’ slice of the Ad Marketplace
PPC is an attractive solution that lets registrars remain profitable while offering theircore traditional services.
Choosing the correct solution helps you grow the opportunity appropriately: Direct or Partnering?
zPartnering tends to be most attractive option for registrars and hosting companies¾ Better Rates
 The right PPC provider may benefit you more than establishing a contract
directly with Yahoo or Google due to the high volume of traffic that theynegotiate¾ Optimization Benefits An established provider knows the best ways to tune financial performance on
PPC as opposed to starting a new program Established partners also help mitigate fraud and other bad actors

Internet Users and Advertising Dollars
Internet Uses and Advertising Dollars
1200

201816
14800

12600

108400$ per uniqueUsers (m illions)

1000

64200

2

Increasing valueof users.

01995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

02006

Date
Advertising $$/uniques

Internet Users

Source: PWC IAB Report April 2006

Significant Lag Between Consumer Time SpentAnd Online Advertising Spend, with Ample RoomFor GrowthMarket Growth'06 - '09E CAGR

AD SPENDING VS. MEDIA TIME BY MEDIUM

TV

43%

32%
30%

Newspapers

3.1%

8%
13%

Radio

4.1%

20%
8%

Magazines

3.8%

6%
6%

Online

21.3%

34%
0%

10%

5.7%

20%

30%

% of Total Ad Spending Spent on Medium% of Time Households Spend With Medium

Source: Figures regarding ad spending and time spent by medium from Forrester Research (May 2005); market growth rates fromZenithOptimedia (December 2006).

40%50%

Big Growth in Online Advertising
Domains = Advertisingz Direct Navigation¾ Users type request into location bar¾ Domains resolve and present semantically relevant material¾ Huge piece of online advertisingz Sponsored Links and Online Advertising¾ Big Industry, immense growth¾ Many new companies started to service thisz Keyword Ad Expenditure¾ Keyword ad expenditure growing¾ Keyword related domain registration

Growth in Direct Navigation
As users gain more experience using the Internet, they rely less upon portals and search engines and areinteracting directly with the address bar
 54% of domains sold are currently being used for traffic monetization purposes
% OF INTERNET USERS ARRIVING AT WEBSITES BY DIRECT NAVIGATION
80%
64.4%

67.0%

68.5%

70.0%

2003

2004

2005

Current

53.2%

60%
48.1%
40%

20%

0%
2001

Source: WebSideStory.

2002

The Power of Direct Navigation (typed in traffic)

Conversion rates for direct navigation are almost twice that of search engines

5%
4%
3%
2%
1%
0%

4.23%
2.30%
0.96%

Direct Navigation /Bookmarks

Source: WebSideStory.

Search Engines

Internet Links (Other)Example of Direct Navigation
User types in “careerseeker.com” in address bar searching for relevant information

DomainSponsor creates an optimized page of keywords relevant to the user’s search

Targetedkeywords
refine user
search withgreater
specificity
resulting inhigherconversion
rates

Example of Direct Navigation (continued)
User clicks on “Find a Job” and gets sponsored results

More search
topic links for
additionalmonetization

A click on anyof these links
generates
revenue for youThe GoogleContract gives
Google theexclusive right tothis space on
Oversee.net’sDirect Navigation
Sites

Opportunity - Develop new lines of revenue
Non Revenue Properties
Unlock the value in parked page inventory House Domains

 Financial Hold 404/500 Errorsz

Non Renewal/Payment

 Under ConstructionzSuspends/Charge Backs

 Page not found/ dead links

 Failed DNS requests

 Coming soon

A Powerful Revenue Machine Focusedon PerformanceTurn Under Construction into Revenue

Turn Lost Revenue Opportunities into Revenue Generation

Lost Revenue Opportunity

Turn 404 Errors into Revenue

Turn Lost Revenue Opportunities into Revenue Generation

Lost Revenue Opportunity

Turn Page Not Found into Revenue

Turn Lost Revenue Opportunities into Revenue Generation

Lost Revenue Opportunity

Turn Under Construction into Revenue

Lost Revenue Opportunity

Turn Lost Revenue Opportunities into Revenue Generation

Benefits of Domain Parking – Unlocking thevalueDomain parking however does not only benefit consumers. Resellers can make use of domainparking for marketing and sales purposes.

Domain parking is an excellent marketing tool because it allows Web hosting companies andresellers to propagate their brand identity.

domain parking serves as another method to advertise your business but instead of paying foradvertising you make money

Breadth - If thousands of consumers elect to park their domains with your reseller operation, thenyou are creating thousands of separate, individual advertisements



Revenue can be considerable, thirst for PPC InventoryDomain parking is thus the first step towards establishing an Internet presence.

For this reason, domain parking should be integral component of any large scale hosting reseller
operation.



Looking for ways to increase your bottom line profits without investments in technology or
additional employees?

Generate significant new revenue while enhancing their end-users' experience.

answer Failed DNS requests with the IP of a search engine page with advertisements on itNeed for more revenue
margin pressure

Powerful New
Revenue Solutions(SAC) Escalating subscriber
acquisition costs

Turn Non-Performing Properties
into Revenue Producing

Lack of in-house technicaland marketing expertise

Lengthy
Implementation/Integration

Outsourced ASP Solution(Point, change or refer pages, no technicalexpertise needed)

Rapid set-up and deployment
Days not weeks to get going

Our Value Proposition

Market Condition Challenges

Challenges and Solutions

What is Domain Monetization?
Domain Monetization - Revenue Flow
Direct Navigation - User types in domain name. click on a book mark or favorite
User Friendly Navigation: Clicks on a Keyword or Performs a Search
Optimized Advertising: User Clicks on Ad
Multi-Source Ad Rev – Search, Ads, PPC

Direct Navigation – Users type in domain name and is redirected to a custom DomainSponsor landing
page populated with ads and content relevant to what he’s looking for.
User Friendly Navigation – When arriving at the landing page, a user views relvant links and can clickon an ad or a keyword, or perform a search.
Optimized Advertising – Ad clicks take users to the advertiser’s site, generating revenue. We share therevenue generated from these clicks, advertisements and searches with you.
Multi-Source Ad Revenue – Search, Ads, PPC are all areas of maximizing revenue on a landing page

PPC : Hosting’s slice of the Ad Marketplace
PPC is an attractive solution that lets hosting companies remain profitable while offering theircore traditional services.
Choosing the correct solution helps you grow the opportunity appropriately: Direct or Partnering?
zPartnering tends to be most attractive option for registrars and hosting companies¾ Better Rates
 The right PPC provider may benefit you more than establishing a contract directly with
Yahoo or Google due to the high volume of traffic that they negotiate¾ Optimization Benefits An established provider knows the best ways to tune financial performance on PPC as
opposed to starting a new program Established partners also help mitigate fraud and other bad actors

Domain Sponsor
The Leader in Domain MonetizationProprietary Optimization Technologyz Semantic and Behavioral Analysis
z Dynamic Landing Pagesz

Established Reputationz Reliable Payouts
zComprehensive Account Managementz Excellent Partner Support
z Superb Customer Servicez

Why Partner with us?
 Constant Change means you need a partner with deeply pocket resources who

has extensive relationships with major partners
z The Tier 1 Search Companies (Y!, Google, MSN) have had 6 major platform launches in

the past 18 months. The evolution and pace of change is dramatic.
z The Tier 2 Search Companies (AskJeeves / CitySearch, InfoSpace / Switchboard, etc.,)

have had at least a dozen major merger and platform changes in the past 12 Months
z Oversee.net is a Preferred Marketing Partner for each of these companies, tightly

integrated with their product, marketing, and sales teams to assure product compatibilityand leverage.
z Technology Leadership - Our Technology Delivers Higher Domain Lifecycle Revenue(DLR)z Performance Leadership – From Top to Bottom Oversee.net is focused onperformanceStatistics and Reporting on financials

Back-End Log In for Reporting/Management – Partner Support

Detailed/Summary/Custom Performance ReportsWhy Partner with us?
 We are the largest and most financially sound We paved the way forcompanies to monetize internet properties

 Our Technology Delivers Higher Domain Lifecycle Revenue (DLR) Knowledgeable, experienced teamz Thought Leadership¾ Built by Domainers for Domainers.
z Technology Leadership¾ We provide the only complete optimization package built on simultaneous execution ofsemantic, behavioral and landing page optimization to maximize revenue performance.
z Partnership Leadership¾ Unsurpassed Supportwith “One-Stop-Shop”: a single point of contact & accountability

Dependable ASP Environment
 High-speed accessz Multiple networks

 Network Operations Center 24 x 7 x 365
z Onsite network operations and support

 Securityz Firewalls, authentication, SSL, secure perimeter Data Integrityz Daily backups, offsite storage

 Onsite / Offsite data centersz Carrier grade facility, certified by Top Search Providers
z Onsite application service level management& IT Staff

 Monitoring Tools & Featuresz Software package designed to detect and report warning conditionsz Regular & automated checks on: network services, major server components,and system resources Escalation Procedures

Positioned to Deliver PerformancePut your Domains to Work for you…

How Does Domain Monetization Work?

Example Partner Pages

Customer Partner Landers

Customer Partner Landers

Example Partner Pages

International Landing Pages
Take flight with international landing pages.
DomainSponsor now offers international landers withlocalized content! If you have domains that would benefit
from Japanese, Spanish, French, German, or English
language support, you now have access to a multi-lingual
revenue machine!

International Landing Pages
DomainSponsor’s optimization strength
remains the same
DomainSponsor’s optimization is noweven stronger, with multi-lingual
optimization to maximize the revenue
potential for each language
independently.

Japanese Language Pages Montetize BestStrengthsz

Localized
Customizationsz

Language Detectionz

Smart Suggestionsz

Keyword and Adz

Better paying

International Landing Pages
DomainSponsor lets you work smarter, not harder,
to maintain and grow your international traffic.
•Support for all TLDs, and multi-byte characters, including Japanesecharacters.
•Your visitors can easily switch between languages.
•Pairing local advertising partners with the right display language
provides highly targeted content for your visitors, promoting
repeat visits and higher conversion rates.

Q&A