Domain Sales; Numbers Game with Timing & Luck

You can judge very little if any significance to value based on the number or frequency of sales inquiries.

Assuming you have good keyword names it involves mostly a matter of timing and luck to get end-user offers and sales. Depends on if a business is in need of a name at a particular moment in time and somehow stumbles across your domain which would benefit from its keyword match.

You can own excellent keyword names which are niche dominating and category killer names but never get an offer over many years or possibly get occasional lowball offers (which lowballs come mostly from domainers or non-serious end-users).

When you read dnjournal.com you may think the vast majority of names had sold for far more than what they are worth. In fact, many names which sold for high amounts may look like reg fee names or domains you would not pay anything more than $100 for but they sold for $1000s.

End-user (non-domainer) sales is little more than a numbers game involving timing and luck.

Hart to Hart by Frank Schilling

I’ve been watching lots of 1970’s TV lately. My kids really dig those easy-to-follow storylines and I love the trip down memory lane. What’s most interesting from a grown-up’s perspective is how the value of money has changed over the passage of time. A million used to be a big number in the days when Jonathan Hart flew his Gulfstream II to play poker with oil sheiks and generals. $25,000 a year was a salary that put you in the top 10%. Mr. Hart had earned his lifestyle by becoming an industrialist and self-made “millionaire”

Yesterday’s million has given way to today’s trillion and a trillion is 1 million times the size of Mr. Hart’s million. I may be an economics dropout, but my street-smarts remind me to trust the words of Abe Lincoln: “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.” Abe’s turn of phrase, reminds me not be lulled into suspension of common sense, as we hear about the next trillion dollar bailout and how it will magically return us to the land of growth and normalcy from whence we came just 7-years ago.

I was living in Lyford-Cay in the Bahamas 7 years ago, in the wake of Hurricane Ivan. It’s a stepford, gate guarded compound of homes and club-buildings on the western tip of New-Providence, filled with old money, country club, trust-fund types. Nice place to visit but I wouldn’t want to live there. One beautiful night my friend, the CEO of a major bank, who had helped arranged my temporary stay, called me to go running. He waved his arm across the twinkling star filled horizon toward a group of luxury villas: “All these people are broke Frank .. They are not productive and their wealth is slipping away without them knowing it”.

What’s more apparent today than at the time of that prescient comment 7 years ago, is that in inflation adjusted terms, most of us are working harder for less. Forget the number on your PPC stats page or the price you just garnered for that 5 figure name-sale, those dollars, euro, yen and francs you’re bringing home are buying less of what they would have bought 7 years ago. My friend had started his banking career in Countries outside the modern financial system. Brazil, Argentina and Africa taught him how fragile the global financial system could be and what it was like when the coveted “system” fails. He felt chastened by the sudden increase in the price of commodities and particularly, gold (the world’s universal currency) which had risen from the $300’s an ounce to the high $400’s in a very short time.

My friend turned his conversation from our neighbors who’s collective millions were quietly losing value, to my domain names – “How much are all your domain names worth if you have to break up the portfolio and sell each, one at a time?”. Hmmm… If I sold 10% of my portfolio and slashed prices 70%, burning the furniture to get the job done, I could probably raise about $250,000,000. He laughed at the number as it seemed implausibly large in 2004. “How long will it take you at this pace to sell them all?” Some quick fingertip math revealed that I’d get around to clearing my last great .com sale around the time I blew out the candles on my 190th birthday. Time my friends, is still the most valuable commodity. The last 7 years of money printing may have staved off an economic collapse and served to make the implausible “dollar” value of our collective portfolios seem fair, but no amount of printing can bring back the most precious commodity, the 7 years we all lost.

What we really need in the domain name business is a “productivity miracle”. A quote attributed to Alan Greenspan, I first grasped the concept of the productivity miracle during an afternoon in Cayman when a group of visitors, lay on the beach in front of the Ritz. This vacation scene unfolded out the window of my office where I had an incredibly good day domaining. Without my scripts, servers, and skills I would have needed 50 of those vacationers (and then some) to accomplish what I did that day. I added permanent value to my business, while those strangers lapped up Vitamin D and umbrella drinks. You have all experienced similar days. I “was” the productivity miracle that day. Without the productivity miracle of computers, software and programming it may have taken me a month to accomplish what I did – and I’d have missed tomorrow’s opportunities because I would never have had tomorrow free.

I continue to witness the productivity miracle in the office here in Cayman when John runs our monthly renewal list in 20 minutes, or when he gets the unlocks and authcodes for names and I run the bulk transfer script to move names over to our registrar. I see it when Ryan tweaks the traffic program and Roy and Ying roll out sales-site enhancements. I see it at InternetTraffic.com when each of you post your daily add-lists which come in like a never-ending river of opportunity for each of you. It’s heartbreakingly beautiful to watch the collective productivity of all our people and partners. All that mental horsepower (which is already focused), getting re-focused via our system. It would take all the people walking on the beach today to properly handle the hundreds of sales inquiries that the automated domainnamesales.com platform handled last night.

What this industry needs is a similar productivity miracle in name-sales marketing. So many buyers out there have no idea how to go about buying a better name. They don’t understand the value proposition, or they want a better brand but don’t understand the clerical process of getting to the point where they can put their new, shiny, better name on their business card. I am working for changes in the way we market our names. I can imagine a day in the not too distant future when domains entered into the front door algorythmic search-box at Google, Yahoo, Bing return a one-box result offering to help buy the name in exchange for a percentage of namesales revenue to the search engine that closes the deal.

Google would clearly have a massive tactical advantage with an established one-box product and their search footprint. Name-sales are a multibillion dollar annual business, and there are hundreds of millions of dollars in annual sales commissions for helping users facilitate the purchase of names – and billions more waiting for the party that helps those users create hosting relationships, signing certificates, email, etc. In a perverse way it may be New TLDs which spearhead the marketing push in premium domain names. As more people take up the opportunity to buy new names at registration price, the more those people will be able to identify the good names from the bad ones – and the more they will covet those better ones.

Well, a million may not be what it used to, but the million-plus names on our platform and millions of daily unique visitors they deliver are certainly appreciated here folks. So much so, that this month we intend to pass along our next rev-share tier payout to our partners. It’s the reason your wires will be just a smidge larger than the report number in your stats this month.

As our monetization platform has grown we’ve seen a large number of naked arbitrage operators try to join us. These are predominantly small accounts, with terrible names, which miraculously get 10,000 uniques a day. We’ve kept those folks at-bay. Arbitrage isn’t a dirty word. We’re all in the arbitrage business in one way or another. When you buy a domain for 10$ per year and sell 13$ per year of traffic, that is an arbitrage play. The type of Arbitrage which troubles us is the kind that changes the characteristics of traffic.

When you buy a piece of traffic from one ad network and sell it to another network for more money you are unknowingly changing the nature of the traffic you bought. Our upstreams have told us that InternetTraffic.com has far fewer traffic quality adjustments than other platforms. We are certain that has much to do with our collective vision regarding arbitrage. Visit an arb-page and click on PPC link after PPC link to get to an advertiser and you’ll see it is a frenetic, “lean back” process which bounces you around quickly, without much effort. When a user types a domain name into their address bar, they assume a much more focused, “lean forward” stance in their chair. The effort that goes into typing a URL and immediately getting your result without changing sites, creates the impression of authority and a more sincere user. It’s a subtlety that translates into greater sale conversions (traffic quality). Time and performance have born these facts out.

When you have type-in domains you are venting light sweet crude from the ground. When you run arbitrage, you are pumping saltwater into the ground to bring the heavy oil up – or worse, fracking, to get your oil. I would encourage any of you toying with arbitrage on this platform to please move that business to another partner. We have no place for it here. Arbitrage is always there for us. We can always get arbitrage back if we drive it away. Type-in traffic operators are more elusive. They have the pure traffic and we want to continue to provide a platform where it is appreciated.

Speaking of platforms – our DomainNameSales.com platform is chugging along and doing a terrific job brokering and handling sales inquiries for our clients, without charge. I continue to generate more revenue from that machine than I do from all my traffic sales. I strongly encourage each of you to embrace it, as I have. The version I use is no different than yours. I expect within less than a year, the time you spend investing in this platform will result in you turning more deals – and at greater prices than in your previous years. InternetTraffic.com’s parking program will continue to pay more than other PPC shops, but it is our goal to unlock the latent value of domain name portfolios by closing more sales, at higher dollar volumes, more consistently, than other sales platforms. I am so impressed by our site’s utility that I think, in 12 months, it will likely be the main reason that clients beat a path to our door.

Creating a great sales machine, unlocking the value of names and traffic, opening that platform for free to the masses – this may all sound very altruistic and too good to be true. But the cold truth is that I am doing this for me. If Jonathan Hart and my friend Pascal have taught me anything, it’s that I’m not getting any younger. I have a great deal of name inventory and it is my goal to unlock the value of those assets before Haley’s Comet graces the night sky above Lyford Cay again. If delivering a great product ultimately helps you to do the same for yourself, then all the better.

Nobody on The Road… Nobody on The Beach…

Written by Frank Schilling

There is something about the end of summer that feels so very similar every year. The end of summer, of fun and frivolity always comes at the same time and echoes, like the lyrics from a Don Henley song. Aptly named “Labor Day” is like a starter’s pistol at a collective social race that has been programmed to begin through years of grade-school, college and university. Everyone around the world does it. Fighting the urge to be productive in September is like swimming against an unstoppable tide of human behavior.

A different more fearful tide of behavior continues to play out before us. People have come to the realization that the economies of the World are poised to get worse before they get better. Apparently printing more money to paper-over problems doesn’t work! I certainly believe that to be the case. Much of our economy today is powered by the Ponzi-scheme of government dollars recycled to the private sector, then recycled back to government. We have America, Greece, Portugal, Spain and others on food stamps. There are 20 million people in the US working for the Government, basically paying no tax. A government employee’s tax bill is just a return of cash back to those productive members of society who gave it to them in the first place. We have millions more on government social security and Medicare – all draining the system – taking more than they contribute. This is playing out in Europe, in America… everywhere.

I believe the US is facing difficulties, orders of magnitude greater than its recent financial downgrade. I noticed it in Malibu of all places, where for the first time I saw not only a dead-head sticker on a Cadillac, but also men, holding signs, begging for cash, at Cross-Creek and PCH (a celebrity studded shopping district North of LA)! There were many more regular-looking people and even women standing on corners throughout Los Angeles (not just the usual corners) with “need-help” signs in hand. The usual corners near freeway ramps had many more people standing on them, begging. Storefronts were closed and some stores had downsized even on Rodeo Drive.

here is a strange inflation and parallel deflation occurring. Certain people are charging more for goods and services and chalking it up to inflation, while earnings fall or disappear for the industry in which they participate. Millions of people like you and I have not come to terms with the difficulty ahead, wrongly thinking things will soon get better. There is a great re-organization upon us where whole industries are going away. Cash is being printed by governments to prop up unsustainable routines which just shouldn’t exist anymore. The no-confidence vote of the world’s productive members of society is reflected in the price of gold which has soared since I suggested you buy some back in 2004. Those who followed my lead nearly quintupled their money.

Gold will be 3500 – 6000 an ounce in a few years – either that or it will stay at 2000 and the DOW will fall to 5000. You can diarize that remark as you did my last. Gold of course is just another human behavior which men fight at their peril. Just a shiny metal without an intrinsic use… just like the tide of back to school, back to work mindset… and just like the rush for .com names which work just as well as .nets .info’s and .whateveryouwant. To return things to a domain context, no amount of new TLD’s are going to diminish the value of the human behavior gold standard – .com .. used.cars will not knock 20k in value off usedcars.com. It will increase the value of usedcars.com and set a permanent floor to its value. Make those words as you did my gold remarks in 2004, fight them at your peril.

Millions will be made and lost in the New TLD casino, on both sides of the table. We are creating a machine to enrich strangers, with a nebulous and unknown outcome for the participant. Most at the table agree it’s better to have tried and lost than to never have tried at all. I am not 100% sure I have the right answer for you, but it could be that the biggest winners at the new TLD table are those who buy the best SLD’s in each space. One recurring theme of all namespaces is that a TLD is only as good as the best SLD’s in it. If you buy the best second level names in each space you can do better than the registry itself. The .COM space is a good example. The top 10 million generic domain names in .com are worth more than Verisign. Only 5-10% of all the names registered in .COM are generic or meaningful in any way whatsoever.

Newer spaces such as .INFO have seen even fewer good names with perhaps 1% of the .INFO space being worthwhile to anyone whatsoever. I could see just a few thousand good names per string in almost all new TLDs – a collective few million worth anything whatsoever to anyone.. and the demand fall-off being almost TOTAL after that.. Unlike .com which has “some” low dollar demand for $250 multiword strings, there will be ZERO demand for longer strings in new extensions. Better to be the registrant of the best SLDs than to embrace the clerical misery and competitive marketing-hell of running the registry itself. Only the deepest pocketed and most brave should walk down this college fraternity hazing gauntlet or roll the dice at this table of monsterous uncertainty.

The Internet Traffic business is at its annual low as I write these words. People are gone fishing and the economy’s ad dollars sit on the shelf in-wait, soon to be applied to dormant adwords accounts. The back to school rush will see millions of new, refurbished and toolbar-free laptops fire up in unison. Type-in traffic will spike. Ad dollars will spike. We will build to a crest through January, propelled higher by the Black-Friday shopping season. It all kicks off with Labor Day and we will be there soon enough.

My hope is that the upstream ad-marketplaces (Yahoo and Google) will redistribute those returning dollars, pari-pasu, to the “partners” in the syndication engine-room, who are helping to move the ship forward. If they decide to skim off the top to “make their quarter” at the expense of those assisting below, I see genuine discord for the ad-marketplaces and difficulty keeping traffic next year. Like an abused spouse, Tina is two blows from stepping out of the limo and walking away from Ike once and for all. If the upstreams reap all the returning autumn gains at the syndication channel’s expense, I see platform abandonment ahead. I’ve heard it from too many partners and in too many quarters for this not to be the case.

More than in previous years, this is a season to be the squirrel – to gather nuts for the cold winter ahead. It’s a great autumn to “take the deal” and build a cash cushion to see you through in case this winter and the economy are colder than in previous years. I am advocating that all our partners save more of their earnings and build as big a cushion as they can muster. Higher renewal fees for .com names in January will bring discontentment in February as registrant margins get squeezed. Upstream partners will need to recalibrate their payouts to those partners doing the lifting downstream to compensate for the name renewal price increases, or risk losing their partners to alternative and unorthodox monetization implementations promising more revenues.

I expect that “pressure to pay more” on upstream ad markets will intensify because of the new TLD process. That process will put negative pressure on existing SLD name sales, which have been a crutch for low PPC rates over the past 2 years. Early next year, name buyers will wrongly question the value of existing .com/.net names against a barrage of press extolling the virtues and vices of new TLDs. The trifecta of a more difficult economy, lower traffic revenues from the Verisign price increase and lower name-sales due to the sideshow of the new-tld process will cause pressure on re-sales. It would be an Orwellian Animal-Farm moment to see Google and Yahoo crushing the numbers this February as the domain-industry plays the role of the horse in the engine room, turning the wheel for less and less revenue. I just don’t see that working any longer. So the takeaway for you all is to sell more of everything NOW and save it, then have that cushion so you can buy some courage to change partners or try unorthodox methods if you need to next March.

Despite that gloomy prognostication of what could come I remain hopeful that we have seen the collective low for traffic payments in 2011. The market and fixed expense reality simply dictates that type-in-traffic is worth more, and it is not equitable that any middleman takes a majority of a product which is produced. There are flat-rate shops buying traffic at higher levels. Walmart is a buyer. Target is buying traffic directly during the Black-Friday period. It’s a short curve of logic for those monster retailers to buy that traffic all year long. Walmart buys everything from Sundried Cranberry snacks and Garden hose directly through their buying center in Bentonville. I have been there and have seen that process in-action when I sold Walmart video game joysticks and gamepads 15 years ago. It is illogical that domainers wouldn’t eventually line-up at this same location with blocks of tens or hundreds of millions of unique monthly visits, if the existing paid-search marketplaces get so greedy that the model of selling to those marketplaces becomes unsustainable.

In the end, the method which we use to implement domain name type-in traffic is not under our control. Upstream traffic marketplaces need to decide how much volatility they want to tolerate in their keyword marketplaces and how much value they ascribe to it. A healthy channel simply dictates that those who generate the traffic, need to ride along in the success, otherwise the market becomes volatile and ultimately, undone.

Category defining: CorporateCommunications.com

The category defining name to own if you are in the corporate communications business. Owned since 1999. Sharp price reduction: For more details and to possibly buy or make an offer please click-on the picture below…

This name was verbally valued at approxiamtely 500k to 600k by a domain broker in 2009 who now works as a broker for a major domain firm.

Suspended RSS Feeds are Welcome to Reapply

The Afternic.com blog and popular blog DomainGang.com were suspended for ongoing spamming of our non-commercial and advertising-free DomainingRoulette.com RSS News Feed.

They are welcome to contact us if they would like to be unsuspended.

A Recently Discovered Quality Domaining Site

Just finished listening to the new DomainSherpa.com interview with well-known domainer Justin Godfrey. Just in case you are not familiar with DomainSherpa.com it’s a relatively new site operated by Michael Cyger. I have spoken to Michael and listened to his informative and educational series of interviews.

By the way, Michael has excellent interviewing skills. His interviews also benefit nicely from their length since they are 1-hour or longer which time allows Michael and his guest to cover a lot of information in that time (compared to much shorter Youtube videos).

It’s also quite interesting how the video interviews are of such good video quality from a basic service which most of us probably already have on our computers. After seeing how good the split-screen videos are I asked Michael about the technology thinking he must be using a top-quality video production system and was surprised the video quality is from Skype.

The most interesting part of the latest one-hour plus interview was how Justin Godrey purchased the domain name Snowmobilers.com for just $500. The name had an equally surprising low asking price of only $900 which Justin received in reply to his email. I doubt I would even bother try to get a better price as he did with that amazingly low initial asking price.

How is that possible when the name is likely worth so much (I would estimate at mid-5 figures or more). Justin was certainly lucky with that one. Why does that kind of luck never happen to me?

Importance of Owning Your Desired Domain

Domain names are extremely popular as far as owning a website with that name, and its potential use as a business presence, marketing venue, e-commerce site, blog, email address and for information and product marketing. Obviously, there is only one exact name which is truly your most desired domain name available or for-sale, making it unique.

You probably realize the high value of owning a good domain and you surely don’t want someone else using “your desired domain name” and getting visitors looking for the domain keywords, the exact search term, or its URL, which visitors could have gone to your website, right? Why in the world permit another potential buyer to acquire your most desired available domain-name of interest and allow competitors to get site visitors going to their site, which visits you could have received instead?

There are a number of businesses and people with interest in also buying and developing your most desired domain, with some potential domain name users being quite well known both on-the-web and in the offline world too, including individuals and small, mid-size and large business owners in various businesses.

For a real-time internet-search to see “your desired domain name” and its search-engine and web-page popularity of the exact search-term, please do a Google search and search on the keywords (wrapped in quotes for exact search-term results) of your desired domain name (using spaces between words), consisting of your desired domain name (but without entering the domain name extension, i.e. .com .org etc).

As a side-note, it’s sometimes interesting to view the Google results when you combine the words without any spaces between the keywords. The results will be much lower vs using spaces but nevertheless it may be informative, especially if the number of search returns for the words without spaces are considerable.

Read about your most desired domain name

Negativity by Paying Domain Broker Upfront Money

Sometimes domain name and website owners may wish to hire a domain brokerage to sell their names or websites. I can give you some good advice (gained via my personal hands-on experience) about that, including a warning about paying any upfront fees to the broker.

Keep in mind, once the domain-broker has your money a good degree of the incentive to work hard and sell your domain or website may be lost since the broker already has his/her money, regardless of the name selling or not selling.

One more potential negative occurrence is the once friendly relationship you had with the broker may quicky go away if there are any business or personal issues involved. That can easily happen as a result of the broker already having your paid in advance monies so he may decline to issue a refund if you are later unhappy with his work and perfomance.

More information about why you should never even think about paying a fee in advance to a broker (which we published over a year ago) as part of a post about the category defining premium domain names LiveApp.com plus LiveApps.com both being available for purchase, located here: About Domain Broker and Live App domains for sale .

A good article about domain brokers was recently published in Elliotsblog.com in which Elliot lists domain name brokers. I know several of the same domainers/brokers and can suggest the following domain brokers, which Elliot listed in his post:

• BigTicketDomains.com – Kevin Leto
• DifferentInvestments.com – Justin Godfrey
• DomainBroker.com – Rob Sequin
• DomainsForMedia.com – Eric Rice
• MediaOptions.com – Andrew Roesner
• NameConnect.com – John Daly

By the way, Webtrading also offers a domain brokerage service (mosty for our own websites but the brokerage service can also be used to buy domains belonging to other parties), which you can learn more about by clicking-on the image below. In addition, any comments you may have about selling domains and websites, or regarding domain brokers will be appreciated.