When Lawrence Ng and his friend started

Oversee.net with $10,000 mostly on credit card debt, the startup operated out of Skid Row where Ng once passed by a corpse on his way to work.

Today, seven years later, the company is 200 employees strong with $125 million in revenues and last fall was ranked by the Business Journal as the third fastest-growing private company in Los Angeles County.

The technology-driven Internet marketing company has done this primarily through the arcane world of “direct navigation.” That’s where users bypass such search engines as Google or Yahoo and type what they want directly into the browser address bar, such as “SoapOperas.com” instead of Googling “soap opera.”

Studies show that only about 10 to 20 percent of searches are done this way, yet Oversee, which has grown with no venture funding, is showing that there’s a lot of money to be made in the world of direct navigation.

So much so that Oversee is expanding. The company next month will move its headquarters down the street to a 44,000-square-foot space in the City National building.

The company’s 600,000 domain names and 2 million others it services can be likened to virtual real estate something like empty lots at prime locations.

They are called “parked” Web sites that hold neither value nor content for users except for the domain names until Oversee’s technology takes over.

For example, Careerseeker.com sits on Oversee’s software. Careerseeker itself is not a destination; it features lists of links to Monster.com or more specific job sites like HealthjobsUSA.com or Hotelcareers.com. These, along with links to advertisements, get updated real-time based upon what key words are searched on the site and what links get the most clicks. As a result, the site becomes a category-specific search engine of sorts.

Oversee.net estimates advertisers make about $1 billion a year on direct navigation. Conversion rates the rates at which Internet users become shoppers for ads on parked such domains are double the conversion rates on search engines, according to a 2007 study by Efficient Frontier.

Capitalizing on context

Bill Mushkin, chief executive of Name.com, which owns about a million domain names, knows this. About 100,000 of his parked domains are powered by Oversee’s technology.

“People will say parked sites are meaningless, but they funnel people very quickly to where they want to go,” Mushkin said.

Name.com, which pays nothing to Oversee but shares advertising revenues that flow in on a cost-per-click basis, also gets free reports from Oversee that analyze traffic behavior for its parked sites.

Marianne Sweeny, search optimization specialist at research firm Ambient Insight, characterized Oversee as one of many successful companies capitalizing on the contextual Web.

“You can’t just have pages of links anymore on a site. Search engine algorithms have become so sophisticated that in order to count, there has to be a shared understanding between the link you click on and the page you end up on,” she said.

Oversee.net executives are quick to differentiate the company’s concept from bait-and-switch sites that lure you into a site full of irrelevant links.

“Our software is based on what people themselves type in,” Ng said. “It guides you where you want to go. It’s not about pushing you to spend more money on online casinos or on refinancing your home.”

Jeff Kupietzky, the company’s executive vice president, likened Oversee’s domain services business to the massive mural ads on the fa & #231;ade of Figueroa Hotel on Olympic Boulevard.

“In the future world, they might get more profit from that ad than operating as a standing hotel,” Kupietzky said. “That’s what we’re doing here. We recognize the traffic and we’re putting up our billboards in a way because we see the value of the users seeing that as opposed to how that piece of land has been traditionally valued.”

Oversee’s domain services business accounts for about 70 percent of its revenue. The rest largely comes from its recently acquired travel site LowFares.com and mortgage site Low.com.

The sites generate leads for travel agents and mortgage lenders using technology similar to the company’s domain name business. Oversee executives say the company’s lead generation sites are smarter than their competitors because Oversee’s algorithms track what key words are typed at what time of the day and how they can be used to maximize conversion rates.

Oversee also recently acquired SnapNames, the operator of the largest source of deleted and expired domain names, which gives Oversee customers access to about 20,000 such names that become available every day.

Young and restless

Located in the Renaissance Revival-style 1925 building downtown, Oversee is a young, hip company that has a pool table and a WII console at the center of its headquarters. It hosts hot dog eating contests during annual corporate meetings.

The chief executive is 28 years old. Ng founded the company his senior year at USC studying business with co-founder Fred Hsu, while he was still at UCLA majoring in computer science. They met at Startpath, a company that was buried in the dot.com bust.

The two men started the company after buying a few domain names that seemed to generate a healthy flow of traffic. From there, they bought more domain names while developing software to monetize them.

Oversee’s growth spurts have not come without pain. In the first few years as the company worked out of its Skid Row office building, potential employees scheduled for interviews would turn around even before getting out of their cars with a phone call saying the job just wouldn’t work.

“If I was older and had more gray hair, I might have been able to convince them,” Ng said. But that’s the only experience Ng can recall where his youth might have gotten in the way of his business.

The Internet world is much more forgiving of young CEOs than other industries, he said. Ng, a New York native, worked at a few finance companies in Manhattan while he was at Pace University the first two years of college.

“In those industries, no freakin’ way,” he said chuckling. “For someone to be 28, it’s impossible to be CEO. They wouldn’t care if you’re Bill Gates.”

Because the Internet world itself is so young, someone with long years of business experience isn’t necessarily the most qualified executive at the helm, he said.

“He’ll definitely know more about the nuts and bolts of keeping the trains running on time, and around here, we have a great team who knows how to keep the trains running on time,” Ng said.