December 20, 2011 6:20 pm

Santa spawns an internet cottage industry

Every year, as the shops start playing Christmas carols and children begin opening advent calendars, another seasonal tradition is played out on the internet with the arrival of Santa Claus websites. These are internet sites which offer games, letters and, increasingly, personalised video messages from jolly old St Nicholas.

There are a huge number of sites, from Santa.com and Northpole.com to Fatherchristmaspost.co.uk and santagames.net. For a period of about six weeks, from the middle of November, these websites see a huge influx of traffic, enough to sustain a small cottage industry.

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The Better Business Bureau in the US estimates that more than 60 domain names have been registered in the name of Santa Claus. People running Santa-themed websites report that the price of their key internet advertising terms has trebled over the past three years, indicating that the number of companies in this sector is increasing.

Some of the sites are run for charity, such as the National Society for Prevention of Cruelty to Children website offering letters from Father Christmas in return for a £5 donation.

Many sites are run by husband and wife teams, often as just a profitable hobby. Martin Atkinson and his partner, for example, make just a few thousand pounds each year from www.fatherchristmaspost.co.uk, and do other work for their main earnings.

“We both love Christmas and we wanted to create the magic for children having had one of our own,” Mr Atkinson said.

Magicsanta.ca, offers free, personalised messages from Father Christmas, and is run by Bell Media, the Canadian multimedia company, as a purely not-for profit venture.

“It is the one time in the year that the team can do something that is not commercially motivated,” said Michele Ferrari, director of business strategy at Bell Media’s Sympatico portal. “It is a rare moment of pure joy.”

Some sites can, however, be lucrative. Stephen Bottomley, a former painter and decorator, has run the www.santa.co.uk website since 1998, and uses it to sell personalised letters and DVDs from Father Christmas. He is expecting about 1m visitors to the site this season and a turnover of about £130,000 to £140,000. There is enough profit to support a small family and this is his main job.

“It is a good family business. But it is like a harvest, everything depends on a few weeks and you don’t know how its going to go until it is over,” he says.

Mr Bottomley also owns Christmas.co.uk and is looking to sell this website, which he does not use. He is confident of getting about £100,000 for it, having recently turned down a speculative offer for £60,000.

The hardest aspect of the job, he says, is hiding what he does from his seven-year-old daughter.

“She thinks we just run an online shop, but it can be difficult to keep it from her. We work from home and right now we are waiting for Royal Mail to come and pick up 30 sacks of post, and she is wondering what is in them,” Mr Bottomley said.

PortableNorthPole.com, a website offering personalised videos from Father Christmas, has become one of the most successful of the Santa sites in recent years. Run by a small Canadian company called Ugroup Media, it has created more than 20m videos since launch three years ago.

As a comparison, in the first week of December, it received nearly as much traffic in the UK as the Financial Times website, according to Experian Hitwise, the research group which ranks the most popular websites.

Visitors to the site fill in information about their child – name, age and whether they have been naughty or nice – and then receive a free, customised video message from Santa.

At the moment the site is lossmaking but Alexandre Berard, chief executive, is looking for investors to help turn it profitable. The company has a patent pending on personalised video technology, and is looking to branch out beyond Santa to personalised birthday messages and other video productions.

“We have so much traffic in a couple of weeks, beating a lot of other portals out there. We are getting half a billion impressions, there is a lot of potential,” said Mr Berard. The company already makes some money from advertising and from providing the Portable North Pole service to companies, such as SFR, the French telecoms operator, who use it as a customer outreach and brand building tool.

“There are strong emotions associated with the activity, it is an experience for both parents and children and companies can see the power of that,” Mr Berard said.

While most of these sites are part of a harmless Christmas tradition, the Better Business Bureau warns some sites could have more sinister purposes, such as collecting personal data about children. The bureau advises parents to check the privacy policies and credential of the sites and to be wary of any that appear to be asking for extra information such as last names and physical addresses.

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