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New revenue model for Pokerstars?
In the last few months the online poker industry has seen some ‘not-so-good’ developments. While the number of online poker rooms keeps rising, the number of players is actually declining after a long period of growth. In most industries, companies in declining markets will try to keep the cash coming in by finding new and innovative ways to attract customers.
In the poker industry this has not been the case. Sure, there were innovations like the real 3D software of PKR and the focus on community by 888 Poker but for the most the industry has not seen a number of big innovations.
Pokerstars is by far the biggest poker site in the world and they only improved their number 1 position by finding ways to attract new players. A good example is the live poker tournament tours they are organizing in ‘unexplored areas’ (that is to say, poker wise) like Latin America and Eastern Europe.
Although Pokerstars is great with finding new ways to earn more and more money, there latest revenue model is a strange one and doesn’t suit the market leader. At a marketing division of Pokerstars named Halfords Media they are practicing something that’s called ‘domain name flipping’. With this lucrative business model a company buys good domain names and sells them. There is absolutely nothing wrong with that, only in this case someone at Halfords Media is buying domain names that are linked to competitors like for example Full Tilt Poker and Doyles Room. At least, that’s what Calvin Ayre blogger Steven Stradbrooke claims.
The rewards are obvious. One buys a domain name linked to a poker site and tries to sell it back to the poker site itself. If you repeat this practise lots of times with lots of variatons and for different poker rooms, you can make some good cash.
We couldn’t find out if Pokerstars is aware of this dodgy activities going on in their Marketing Division, but if they aren’t they should. What do you think? Smart or not done?
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