I recently caught-up with my friend Sean Stafford who has a long history in the hosting area. He is doing some neat things that allow hosters to monetize MX records and will be speaking at HostingCon this year. Below are notes from my interview with him:
Stacy Griggs: Tell me a little about yourself?
Sean Stafford: I have been in the domain and web hosting industry for a little over 10 years. During my career, I have always been fascinated by the different monetization strategies surrounding domains. I met with Scott Brown (founder and CEO of bounce.io) and was offered an amazing opportunity to provide a new form of monetization for domains and more. Now, not only am I working on domain monetization, but I’ve been given the opportunity to expand into other areas of monetization for mailboxes and web hosting. I’m also excited to share that I will be speaking on the “New TLDs: Good or Bad” panel at the upcoming HostingCon conference in June.
SG: What is the story with Bounce.io?
SS: At bounce.io, we make bounces better. If you’ve ever sent an email to an address that didn’t exist then you’ve seen a bounce. Typically a 550 bounce has a very technical, unintelligible response with a bunch of computer jargon that only an engineer would understand. Something like that isn’t helpful to most people so bounce.io set out to change that.
Our focus is multi-faceted.We improve the user experience by removing the jargon-filled, plain text bounces that are always English (regardless of the senders language), to something that anyone can understand. We also make sure that the bounce can get delivered in the language of the originating sender.
In addition we monetize each bounce with tasteful advertising which creates a new revenue source for our customers while improving the overall bounce messages to their clients.
We work with all sorts of customers: mailbox providers like ISPs and MSO’s, web hosting companies, and domain owners – basically, anyone with a mailbox or a MX record.
SG: How do you monetize MX records?
SS: Domain owners typically do not think of their parked domains MX records as a revenue generator, but there is absolutely value there. A domain owner can make use of these MX records by adding an MX record that points to bounce.io. That’s it. Once the records are in place, we start handling the bounces and money begins accruing in the account immediately. The same process also works with large domainers who run their own DNS systems or other scenarios where a person has access to the MX and TXT records of a portfolio of domains.
Mailboxes from hosting companies are another stream of revenue that is often overlooked. This is very similar to the bounce process described above, though the only difference is that instead of modifying DNS records, the company would modify their mailserver bounce configuration. And to be clear, when we talk about these bounces we are referencing bounces that mailbox providers are already processing daily for their current customers. These are not new emails, just enhancing what is already happening.
SG: How much does the average hosting company, registrar, or parking company make?
SS: This one is a bit tricky because there are so many different scenarios. Some domains and hosting company mailboxes generate a tremendous amount of email while others might generate less. It all depends on the quantity of the user count (mailboxes) or inbound mail (domains). But considering that there are about 31 billion bounces generated every day there’s a lot of money to be made.
SG: Now for an odd ball question. You have been in the hosting space for a long time, what do you see as the biggest change in hosting in the next five years?
SS: There will likely be a lot of pricing pressure as the cost of storage and processing power keeps going down. The likely result is increased market consolidation and the hunt for new streams of revenue in a market that has a pricing model which has gotten historically cheaper over time and really sliced profit margins. Anything that drives new revenue from an untapped source is definitely important going forward and that’s why new money generating solutions makes so much sense.