Marchex, Google, Yahoo and the Domain Name Monetization Business (GOOG, MCHX, YHOO)

Paul Sloan provides an excellent overview of the domain name real estate business in an article for Business 2.0. This is the first clear explanation of the "direct navigation" business that Marchex acquired from Chinese-Canadian entrepreneur Yun Ye that I've seen in print:

Domainers have their heroes, and one of the most mysterious is a man named Yun Ye, a Chinese citizen living in Vancouver, British Columbia. He is credited with boosting the entire market when he sold his portfolio of more than 100,000 domains to Marchex. His names were bringing in more than $20 million a year in revenues -- and $19 million in profits -- when Marchex paid the equivalent of 8.6 times annual earnings, based on figures provided in SEC documents.

...A onetime hotshot programmer, Ye used his software chops to build the bulk of his domain empire in the late ’90s and early 2000s. He became a master at what’s known as “catching,