Incubators for video games, incubators for big data – now Berlin-based group Covus, an expert in digital marketplaces, domain name traffic and search engine optimisation (SEO), is opening its doors to entrepreneurs.
Sven Lubek (above, speaking at last week’s Founder Institute Startup Pitch Bootcamp in Berlin) founded Covus in 2003. Since then, he’s founded 15 companies within the group and sold several including a 51 per cent stake in Covus Games GmbH, the owner of browsergames.de, to German media giant ProSiebenSat 1 last year. Lubek says browsergames.de is currently attracting about 2 million unique page views per month.
One secret to Covus’ success is its collection of over 40,000 domain names, built by Lubeck after he realised the potential of “type-in” traffic – domain names such as “browsergames” that are so obvious, users will type them straight in rather than look through a search engine.
After buying up several promising domain names, Lubek developed software that could forecast whether a certain domain would have type-in traffic.”It predicts if a name combination, like “kinoberlin”, has type-in traffic or not. And once you’ve got the name, and you have type-in traffic, you know exactly what people are looking for because the name is pretty obvious and the target group is pretty clear.”
The problem most web portals have is they start with zero traffic or have to spend big on marketing to get it, Lubek says. “With a very good domain name you don’t have that,” he says. “Browsergames.de had hundreds of type-ins per day before we invented the portal.”
It’s the reverse of what most internet entrepreneurs set out to do – build up a business model and then secure the right domain names. It does seem to be effective. Covus is funded by its own revenue, from its own portals and other domain name and SEO business, and employs 60 in Berlin (office shots below). Lubek says there are plans to hire 100 more people in the near future.
Freemium – Covus’ latest project
One of the group’s latest projects is freemium.com – a portal for free software, developed within Covus, starting with TubeBox “the ultimate multimedia downloading tool” for Windows7, Vista and XP, allowing users to download and convert music and video files from YouTube and similar sites.
The aim is to replicate the success of Covus’ browser games portal with software. “Software that is as good as ours will normally cost €40-50, we’ll give away software like that and better for free,” Lubek says – with a charge for premium features.
Covus is now looking for would-be founders and entrepreneurs to build companies within the group, offering expertise and funding in exchange for a share of equity or co-founder status. “We have a really hands-on approach and will be really tight to the founders’ team to support them with our knowledge,” Lubek says. He’s also offering five scholarships to the Founder Institute mentorship programme in Berlin this September.
It’s not the typical business model, perhaps – but Covus is clearly building up momentum.