Seven Mile

This little story has been around the net for years and nicely illustrates one more reason (aside from my Larry Flynt Story)  why I go slow on development.  Everyone should read it if they don’t already know it:

An American investment banker was walking by the pier of a coastal Mexican village when a fisherman docked his small boat nearby and tossed several large yellow fin tuna onto the dock.

The American complimented the Mexican on the quality of his fish and asked, "How long does it take to catch them?"

The Mexican replied: "Not very long — maybe a couple of hours, senor."

The American then asked why the fisherman didn’t stay out longer and catch more fish.

The Mexican said he had enough to support his family’s immediate needs and was happy with that.

The American then asked, "But what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my friends. I have a full and busy life which I enjoy very much."

The American rolled his eys and said, "I’m a Harvard MBA and could help you. Here’s what you should do: Spend more time fishing. You get more money, and with that, you buy a bigger boat. Then you can catch more fish, and buy an even bigger boat. If you work hard, then soon you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor. If that works out, then you open your own cannery. At that point you would control the product, the processing and the distribution. And, you could leave this little town and move to Mexico City, or LA and or even New York City. From there you could run the whole thing by phone, Fedex and the Internet.

The Mexican fisherman thinks this over for a minute and then asks, "Interesting. How long will this all take?"

The American thought for a little bit, took out his calculator and punched in some numbers, and then announced "I think you do this in only 15-20 years."

"But what then?"

The American laughed and said, "Here’s the beauty of the whole thing. When the time is right you announce an IPO and sell your company stock to the public and become very rich. You could make millions!"

The Mexican thought this over for a little longer, staring out to sea and thinking about what millions would buy. He asked, "Okay. Millions.. then what?"

The American said, "This is the best part — you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your friends."

Clearly we all need enough to avoid living hand to mouth,  but life is truly short…  enjoy your time with family, friends and those you love. 

http://virtualcashflow.blogspot.com/2007/03/domain-name-investing-theres-not-much.html

Stumbled onto this blog..  the author writes about the domain space..  You can hear the enthusiasm shine through as he tries to lead folks to a domain newsletter..  the first of many such newsletter marketers building a downline I’m sure

While this particular gent is not building a downline; the difference between this newsletter and most marketing newsletters out there is that in the domain business,  you will actually make money.  Yes, I know newsletters like these are ‘typically’ marketing traps designed to enrich those writing the letter (not the reader). The irony of the domain name industry in 2007 is that there is still so much untapped opportunity out there. Even now, folks have a great chance to turn $10 into $6,000 and change their lives if they study the industry, work smart and focus on traffic. My .02

http://www.hatethegrind.com/2007/03/31/do-domain-name-extensions-matter-for-seo/

…. interesting data points.  I have always liked CC Tlds of the country you live in after .com and .net

Interesting additional color on Google and synonyms of names here:

http://www.morningblog.com/index.php/2007/03/31/synonyms_domainnames

Josh Writes:

Hi Frank,

I just posted this (below) to a Tucows/Opensrs discuss list i’m on. I have one domain name stuck at regfly.  not a critical one, but one with traffic.  I really feel for those who have vital domains stuck at regfly.

I am appalled, but not surprised that Icann did not put in measures to prevent this kind of fiasco, that is occurring now.

Be good to verify if the following is true:

1) Mr Levins (Icann) posted that Registerfly will see mediation on its RAA revocation. This adds 30 days to their current accredited status, to accomodate that process.

I just read this post at http://Registerflies.com

http://www.registerflies.com/admins-updates/icann-file-lawsuit-against-registerfly-2.html

=========

1) Mr Levins (Icann) posted that Registerfly will see mediation on its RAA revocation. This adds 30 days to their current accredited status, toaccomodate that process.

e.g. decreditation date is now In May 2007, April 1 will come and go with no fanfare, no diabolical twist and no event horizon.

http://atlarge-lists.icann.org/pipermail/alac_atlarge-lists.icann.org/2007q1/000431.html

This is the single worst piece of paper I have seen come from an ICANN advisory committee in years.  You would think it was written in 1995 not 2007.  They appear to bundle domain-tasting and all forms of domain monetization as mutual-ills.

Among other things, this paper unwittingly suggests that Google, Yahoo and scores of others devalue their public company stock up to 30%, by ceasing monetization of names without content. Who exactly would police for "content" (what passes for content) is unclear of course. If the wishes expressed in this paper were ‘magically granted’.. go-daddy, tucows, verisign and all Internet companies, would be worth much much less — tens of thousands unemployed through the trickle down.

I should have taken my cue how lost this group was when they wrote about domain tasting:  "At this point of time, we feel there still needs [to be] more concrete information to prove these problems actually exist".  As if millions of domain names registered and deleted themselves on their own.

Oh, and apparently domain names are not owned by the registrant..  they are "public goods" in the eyes of these wonks.. so if you are a registrant ..  you best not get too married to your domain name, lest "the public" repossess it.  Which member of the public would be entitled to unseat a registrant paying potential millions for the rights in a domain name is unclear as well.

I agree that Domain Tasting has evolved in an unholy way from its earliest days and needs to be fixed (stopped) at this late stage, but placing all forms of domain monetization into the same blender is a classic example of a bunch of policy philosophizers, that do not fully grasp the machinations going on within the world about which they write.. Here’s one of the faces behind this paper http://icannwiki.org/Izumi_Aizu. 

Hey Izumi;  Are you ALAC folks nuts? Call the owner of www.Loans.com. It has no content whatsoever (the name is a blind refresh). Tell that name’s owner they are abusing ‘public goods’ by monetizing eyeballs. When the laughter dies down, do the same with www.Love.com (who’s owner is an ICANN accredited registrar). Then go down the roster, pissing-off the rest of corporate America (public and private) from there.

Every member of this ALAC needs to step out of their insular world and give their head a shake..  it is 2007 not 1995.  The fortunes of millions rest on the shoulders of the Internet and many of your recommendations are so completely out of touch with the reality in which we live…  It’s a shame this is the best the ALAC has to offer. It gains the organization little respect or credit from anyone I know.

The Webhealth.com story.

My Dad was a family-doctor in Canada for nearly 20 years and he still managed to run into financial tight-passages. The best doctors are always looking after their patients, so caring for their own finances often takes a back-seat to upholding the Hippocratic Oath. I love my Dad dearly and am grateful for his selflessness raising my sister, brother and I, so it brought me great pleasure to help him financially. Now he could keep the family home, spend more time with my Mom and work on his long-time pet project: the health book.

For years I would call the house and my Mom would tell me that "Dad is working on his book".  It would never end of-course, because medicine is constantly changing.  The basics are always the same but treatments change (ie. Merck stops selling Vioxx and the book has to get updated to reflect that history/data point). 

After diligently writing, tweaking and cataloging 20+ years of medical knowlege, Dad awoke to the reality that getting this health book published would be difficult. He turned over the keys to his son,  granting me a free license. Then I had a very bright programmer (thanks Ying) stuff the content of the book into a Wiki.  Then I added related paid search advertising for each topic and lastly, in order to get traffic, I took my health vertical (several thousand generic domain names) and plumbed the names to the most relevant category or topic within the web site.

Result?   If you type depressed.com , eatingdisorder.com, headcolds.com (or several thousand other health related names), you now come to real content written by a medical doctor; that other professionals can update and anyone can share their experiences on. The parent site instantly gets over 600,000 unique health visits a month from thousands of generic health related domains that point to different facets of the site; and the whole affair is self monetized through paid-search.

This is the kind of thing that illustrates the power of generic domain names. Watch what happens as our users improve the content and as we begin to buy thousands of visits a day from Google Adwords to these new content-rich pages.

That’s the dream anyway. If every domain portfolio owner created a wiki for each name complete with relevant content and surrounded by paid search listings for monetization, it would dramatically alter the balance of power on the web between empty domain names and search engines; and it would change the face and perception of domain parking as the name becomes the content

I am starting to think Jimmy Wales was onto something much bigger than even he imagined with this open-source Wiki stuff.

http://blog.domaintools.com/2007/03/dot-xxx-is-voted-down-dot-xxx-fires-back

Jay Westerdal proves to the world that hanging around a bar in Lisbon can lead to overhearing interesting things.

The vote was in favour by 9 votes to 5 with one abstention of the resolution ie rejecting dot xxx. There was minority dissent from Board members Crawford, Dengate-Thrush, Wodelet, Ito, and Ramaraj with abstention from Twomey.

http://blog.domaintools.com/2007/03/how-to-pick-a-registrar-by-elliot-noss/

Jay references Tucows CEO Elliot Noss writing on the Tucows blog and neatly summarizes 10 questions that every domain owner should ask of their registrar.

www.DomainNameWire.com has some interesting data on DN sales .. 

I think www.DomainNameWire.com and www.dailydomainer.com are two excellent outlets for info relating to names. Daily domainer consistently surprises me with it’s arcticulate well thought through pieces and excellent graphics. My favorite public forum is presently www.domainstate.com (Paul C..  you’re the best) and Ron jackson does such a good job touching on all aspects of the industry at www.DNJournal.com  that it hurts.  I don’t know how he finds the time to do it all (special props to Mrs. J. Ron)

Jay Westerdal always has some very nice info at http://blog.domaintools.com/ (presently covering timely icann topics) Vint Cerf and Elliot Noss. Actually Ell’s points are so good I’ll reference it in a seperate post.

Thanks Drew!  :

http://news.com.com/New+antiphishing+shield+serves+up+ads/2100-7355_3-6171015.html?tag=cd.top

Ads served under the auspices of a "phishing shield" … Nice… Proving once again that you can come late to the party and still profit in Paid-Search, a Denver Software Co has come up with a way for ISP’s to hijack browser type-ins.  This type of thing is bad for domain-holders because it encroaches on a user’s intent,  however it can only go so far as users have proven time and time again that they only stand for so much before switching:  browsers, isp’s, search appliances.. etc.  Never underestimate the human desire for freedom.  If a user feels trapped he will flee.

I am waiting for this software maker’s next coup ..  a piece of software to over-ride this piece of software and let users navigate to whatever site they want.

There is an interesting situation playing out on the world stage that has a great deal of impact on the Internet and domain names.

We have new problems going on in Iran. This is on top of everything else happening in the Middle-East/Afghanistan/Iraq/Spending/Defecits.  It is probable that the US dollar is going to get permanently weaker as the Iranians and other supporting actors begin to unseat the USD as the defacto settlement currency for oil. This is a serious thing. For years, Countries of the world have had to hold huge amounts of USD reserves in order to pay for things that could only bought and paid for in US Dollars. Whether you chose to know it or not, that single factor (more than any other) has served to keep interest rates down and prices at the Walmart cheap. It’s not necessarily going to be like that in future. To be fair, America has abused her privilege by spending a lot of money on bread and circuses — but, I live in a US centric world (and frame of mind). I recognize that America has helped to elevate a great many people world-wide. So from my chair, this shift has a decidedly negative and uncomfortable whiff to it.

Along-side that gloomy state-of-affairs is a positive epoch-like sea-change, where the Internet is replacing "all traditional media" to some degree.  We know it is happening.  It’s just hard to quantify how far things will go and to who’s ultimate benefit the changes will inure.

Embodied within that "Internet" sea-change are domain names.  For those who do not already know this, domain names are the foundation of the World Wide Web. Every website, every email address needs a domain name to function. Every page that Google indexes has a domain-name address.  If it were possible to own every domain name that exists, you would control the Internet.  All of it.  You might laugh that off as implausible,  but as it is, most of the good, meaningful domain names on the Internet are owned by the person reading this and a handful of other large groups such as Marchex, Name Media, iReit, Fabulous, etc etc etc.  The world’s top 20 domain name holders in 2007 control a decided majority of all domain names that represent anything meaningful at all. The rest of names are largely useless phrases that do not make sense, in TLD extensions without gravity or resonance.

So against those realities, in March 2007, I noticed that the prices for domain names (sales public and private) are increasing and solidifying.  There are not wild swings like there used to be where a great three-letter .com sells for $300 privately while it sells for $5,000-10,000 via Snapnames auction.  Today,  the price for a generic 3 letter is $5,000-10,000 nearly everywhere. An awareness of the value of domain names has filtered through to the masses — it was even on the discussion table at the ICANN meetings in Lisbon.  There are few secrets anymore. Yet public companies like Marchex (MCHX) and large portfolio sales are still tracking at an average of less than $2,000 a domain name. These portfolios don’t contain random domains which can be taken from the available pool (or via tasting) at registration price today.  I am talking about portfolios of hard-won, generic .com words and phrases that were cobbled together before 99.9999% of people recognized any value in domain names at all.

The disconnect I have built to is that large groups of names are actually worth less together than their individual break-up value apart (and by a considerable margin).  In a perverse way, it would almost be better for a company like Marchex to unwind the foresight of that name-portfolio’s founder [Yun Ye], by selling their names onesey twosey. I previously estimated a conservative breakup value of Marchex’ domain names alone at north of a billion. Problem is, even the best name-sellers can only liquidate about 2% of a large portfolio like Marchex’s in any given year (and that’s pushing it), so in exchange for "cash now", a name-seller has to give up the upside. To be fair, a seller may be giving up the unknowns of the uncertain world illustrated in the opening paragraph as well.

In the final analysis, any large name seller needs to ask themselves, "What will I do with the money?" Come back full circle to that world where oil is going to get much more expensive. Not necessarily because there is going to be less of it in 30 years but rather because the paper money we use to pay for it is going to become worth alot less in the next 5-7 years.  Fedex 3-4 day service may become the norm.  We may need to get used to paying more for a Fedex, and we’ll be picking up our packages a 10-20 minute bike-ride away. That may be the future with much more expensive oil.  Time will tell I guess.

If that reality comes to be: Would you rather own a media enterprise run with trucks, printing presses, ink and lots of people in offices, or would you rather own a pile of generic domain names getting millions of monthly visits in an organic and benign manner?

If there are to be difficult times ahead I feel comfortable owning domain names.  If the times are to be good then I feel even better holding them. Based on the prices of individual name sales this past March, it would appear I’m not alone — Even if other purchasers motivations run slightly less cautious than my own.

Couple of great reads over the past few days on Sahar’s Blog  ..  I had a good chuckle today when reading his piece about MSN.co.uk’s prepopulated search box.  We could do that across all our sites, powering it with the keyword assigned to each domain, but Yahoo and Google expressly forbid it as ‘leading’.  If we did it,  search box searches would explode. I guess being leading is not a problem when you’re MSN..  then again,  MSN probably uses their own advertisers so there is nothing for Yahoo or Google to forbid.  Sahar makes a great point though…  rather than forbidding pre-population in the search-box,  Yahoo and Google should have a "trusted partner" arrangement and allow us to place related search queries in the search-box,  then they should charge advertisers a premium for that privilege.  If somebody types antarctica.com and you prepopulate "antarctic cruises" that should convert to a sale at a decent clip and if the advertiser wants that traffic they should have to pay a premium for it..

Sahar always seems to be thinking outside the box.  I wish we had entrepreneurial minded folks drinking more of the domain-entrepreneur koolaide at YHOO and GOOG.

Pre-populated searchboxes may seem very ‘Web 1.0′ ..  but when implemented correctly, they have a place in Web 2.0 and beyond.

…at the aptly named:  http://www.registerfly-lawsuit.com… Probably not the last.

http://biz.yahoo.com/ap/070327/fcc_internet_device.html?.v=1

…Proposal calls for Web broadcast on unused frequencies

Quote:   "The coalition, which includes Microsoft Corp., Google Inc., Dell Inc. and others, wants the agency to open up unlicensed and unused TV spectrum, also known as "white spaces," for broadband Internet service."

I wonder how we’re going to navigate there..  you’re gonna need to call it something,  so you’re gonna need a domain name.  I foolishly sold FreeTV.com to a colleague..  regrettable decision.

Firm says Yahoo! is well ahead of Google in display advertising. That’s obvious due to the model..  Yahoo is more of a media portal with destination content sites so they are in a better position to serve rich-media/banners (display).  Google is a search pass-through so PPC listings are the natural ad implementation there:

http://www.thestreet.com/newsanalysis/businessinsurance/10347132.html

..  While Yahoo! is the underdog,  I like Yahoo alot better than IAC because Yahoo runs a vibrant ad market. I personally think GOOG is fully valued… (law of large numbers) so if you want to own a search stock,  back up the truck on YHOO.

http://news.bbc.co.uk/2/hi/business/6502773.stm

Quote: "…spending on UK Internet advertising overtook newspaper ads for the first time in 2006"..

I love news but hate newspapers because the ink gets all over my hands.  My high-school science teacher freaked me out by suggesting that prolonged exposure to printers ink — reading the paper every day (getting the print ink on your fingers) may increase your likelihood of getting cancer.  True or not,  I’ve shied away from newspapers ever since.

Josh writes:

"Ka-ching."

http://news.com.com/Microsoft+to+buy+DoubleClick/2110-1024_3-6171162.html?tag=nefd.hed"

Quote: Online-advertising firm DoubleClick is exploring a sale and is in talks with Microsoft and other potential suitors, according to people familiar with the matter, The Wall Street Journal reported on its Web site. The New York-based company is using investment bank Morgan Stanley to help sound out its options, including a possible stock market listing, the Journal reported.

No one at DoubleClick was immediately available for comment. The company is majority-owned by San Francisco private-equity firm Hellman & Friedman, which is seeking at least $2 billion for DoubleClick, one person briefed on the situation said in the Journal.

Unsubstantiated rumor but I’ve heard it from several folks.  Clearly it’s a healthy, natural part of the industry. Let’s see if the announcement happens this week as sources suggest.

http://www.computerworlduk.com/management/security/cybercrime/news/index.cfm?newsid=2365

Spam ads,  Pop-ups with Smiley Screensavers… desktop-wallets and form-fillers, assorted feeds, weather apps and web-lets …  These are all apparently a bunch of bullshit designed to get malware on your PC.  Man; it’s enough to make me start living the life of the Amish. Get my buggy-whip Vern!~

More of same story here: http://www.spannerworks.com/seotoolkit/search-marketing-news/article/view/online-advertising-a-beacon-for-malicious-code/437/

Expect every news outlet on the planet to run with this story. It’s a slow week and old-world media loves nothing more than to show the masses that the new-medium, chipping away at their business model is fraught with danger.  Ooogey Booogey !!

http://blogs.zdnet.com/micro-markets/?p=1140

Quote:  "If Ask.com is the “glue” for IAC’s most admired brands, why is it not standing more on its own two Web advertising feet" ..

"What about delivering long-term IAC results for shareholders? Wouldn’t IAC be better served in the long run with competitive advantage via proprietary ad sales and serving systems, and all advertising revenues, instead of revenue shares?"

Absolutely right  Donna Bogatin.  If I was Barry Diller I’d hire ‘you’ to run Ask.com.

Web Advertising 101:  Where does the money come from?  It comes from people placing ads.  Where do the people place ads?  Through Google or Yahoo.  Those are the major Pay Per Click ad-takers [markets].  Almost everyone else syndicates or distributes the advertising from those two networks.  In domain-land, PPC middlemen include Sedo, Fabulous, Domain Sponsor, Skenzo, Hitfarm etc etc.  In search,  Ask.com is such a middleman, fronting a deal for the likes of Looksmart and others. All these middlemen try to get better deals than sub-syndicators could cleave directly and then make money by paying said sub-syndicators less than the full percentage the middleman garners, yet more than subs could get by going to Google or Yahoo on their own.

Ask.com distributes Google’s ads rather than taking advertisers direct. What’s the problem with that?..  distribution relationships can go on forever, don’t they?

Diller, Ask, IAC have less control over their destiny because they don’t have alot of leverage over Google. Google is in a position to gradually push them back because Google owns the platform. Google knows it, Ask.com knows it too, so in the end all Ask can do is talk tough, threaten, puff out their chest and then take whatever Google gives them.

Quote: IAC took out a full-page promo yesterday [in a special advertising feature in The San Francisco Chronicle Technology & Business section], showcasing its 60 Internet brands in full color and touting: "IAC was recently named by FORTUNE Magazine as America’s #1 Most Admired Company in the Internet Services and Retailing Industry."

This fluff is not for the benefit of IAC stockholders so much as it is to impress Google into giving them 100% rev share. A full-court press of press.. That’s Ask.com’s negotiation tool.  I’m good so you should give me a better rev-share.  That’s no foundation Mr. Diller. I would hate to own stock in IAC for that reason.

http://www.dmnews.com/cms/dm-news/internet-marketing/40482.html

…Das alotta money mang.

Related: Auto industry continues to move Ad dollars Online, http://www.dmnews.com/cms/dm-news/search-marketing/40525.html

Life Magazine has died before ..   but this time it looks serious:

http://www.nytimes.com/2007/03/27/business/media/27life.html?ref=media

There are subtle cues around us every day that the Internet is changing the World:

Quote:  "In its heyday, it occupied five floors of the Time & Life Building in Midtown Manhattan; today its staff takes up a corner of one floor…  Life is moving its huge archive of photographs. onto the Web, where consumers will be able to download them free."

Reading these passages are striking for me. As a child I remember a copy of Life magazine being in most homes on my block.  When I saw Netscape 1 for the first time in 1993, I knew immediately that the Web would change the world because of its ability to share pictures from any location with anyone, anywhere.  Even today that is a powerful core tenet of the Web. The Internet has taken the life out of print (pun intended).

http://www.bizreport.com/2007/03/the_wealthy_are_on_the_web.html

I think ‘the rich’ shop online for the same reason that people look for Porn online:  Annonymity.

When I was poor and younger I would walk down Rodeo Drive in Beverly Hills and I feel totally outclassed.  I’d see people leaving stores with their big shopping bags and wonder what those people do for a living. "I wish I could afford something to fit in the BIG bag."

Today I feel awkward for the opposite reason.  Walk out of Prada on Rodeo with so many bags you can hardly carry them and you begin to feel more like a target than a symbol of success (the BH store will let you park in back if you call ahead to avoid that awkwardness).  Shop online and you don’t have that concern..  the rich don’t worry about the Fedex charge. Fedex is alot cheaper than fueling the jet.

Reports suggests that only 30% of the rich would click on a PPC ad. Interesting how that contrasts against a previous Spannerworks report that suggests the rich are more likely to click on paid search advertising.  I suspect that the other 70% of rich folks didn’t know they were clicking on a PPC ad or their assistant did the clicking.

http://www.pr-inside.com/additional-1-2-million-in-domain-names-r77671.htm

And the sales keep rolling..  Good domains are always in demand.

http://www.sltrib.com/ci_5524587

..  and regardless of your religious views, it’s a good ruling for domain registrants.  Taken to its illogical conclusion, anybody parodying anything or providing info could be taken to task under ACCPA. 

As a quick sidebar; I think the ACCPA is a dated law that doesn’t clearly allow for circumstances such as this and (in many circumstances) steamrolls registrant rights by instilling fear. The people writing this law did so during a period when the net (and domain space) was still evolving. There was no counter-balancing voice at the time to speak against over-reaching trademark holders interests. This particular law simply serves to drive many US centric entrepreneurs to start companies away from America.  THAT is ultimately bad for the US economy.  The world is changing and America’s economy needs domain name related laws that recognize registrants rights and help to foster entrepreneurialism; while still controlling wholesale trademark abuse (which is clearly unacceptable).

The keyword is balance.  Generic name-holders need laws that protect against Cyberbullying by over-reaching, covetous latecomers, just as much as TM holders need laws to protect against squatters..  Cyberbullying is a problem that is going to amplify by orders of magnitude as the Net continues to evolve and as latecomers finally come-around to realizing the opportunity that they missed.

I ran it up from $13,000 to its $15,000 reserve this AM,  then I got distracted with some blogging and and some errands  — a couple of other folks ran it up to $19,000 where it sold.  Good buy IMO.  It would probably have topped 30k with the usual suspects bidding at Snapnames.com ..  my bad.

Firstly..  Subprime in the US has not imploded..  Not yet anyway..  This is just the beginning of a big real estate/mortgage market/capital market correction.  Ask me why I’m not worried..  I’m not worried because difficult markets reinforce the need for advertisers to pay more to generate business.  Part human nature, part business instinct.  What happens when you make less money from domain name traffic?  You double down and work harder to find new names generating traffic and (initially anyway) paying more at auction, paying more for leads.  A wise businessman once told me: There is no such thing as saving your way to prosperity.

Recessions and corrections impact advertising but only nominally relative to the overall economy.  In the final analysis you have to spend money to make money.

Remember my philosophy,  If you’re not growing,  you’re dying.

I was talking  to Vern this weekend about blogging and he said, "Man your blog writes itself". There are so many funny stories in this biz that most people will never know. The domain industry is still so young. There are many untold wild-catter fables. The entire space reminds me of Old Las Vegas.

Take domain tasting .. the "new plague of the modern Internet". Tasting started out so innocently back when people had less money than there were generic names in the sea. It was hard to make money from generic domain names back in the mid 90’s. There were no PPC programs. Internet advertising (in general) was yet to be born.

Before I had any domain names, I had a curiosity about the domain industry and I had ambition.  I hungered to learn more about names and the big name holders. If I could meet the players that ruled this new world, perhaps I could offer outsourced services to them. My curiosity heightened after reading stories that leaked to the late 1990s press about domain names selling for 100’s of thousands (or even millions) of dollars.

One of the biggest name registrants in the mid 1990’s was a company called ‘Mail Bank’. They had registered some really amazing first and last names for the purpose offering email addresses and custom webspace to consumers. The idea was pretty simple, get your email Firstname@lastname.com and website http://you.lastname.com for some small monthly recurring sum.

The company was started in Vancouver, BC (domainer hot-bed) by a guy named Jerry Sumpton. Jerry knew what a good name was but he didn’t have a lot of money. Back then Network Solutions (based in San Diego) was the only registrar in town and they operated the NSI registry (Internic) as well.  Jerry figured out that you could sign up for a ‘business account’ through Netsol and buy names on credit (getting a monthly bill from Netsol).  When the bill came 30-45 days later, Jerry would just ignore it and some time later, the names would get deleted for non-payment. He would then buy back the names he thought were good, effectively kiting the payment system. The best names with lots of email accounts would always get renewed regardless.

In the mid/late 1990’s, kiting the Network Solutions payment system became more difficult because the adult operators of the day figured out that you could register female first names like "Sally", "Mary", "Jessica" and point them to Porn-site entry pages; making pretty good money selling porn subscriptions to ‘gentlemen’ looking for Sally, Mary and Jessica surrogates.  Aside from having trouble keeping his female first names, Jerry faced new drop snipers like "the Watermelon Farmer" Scott Day and "Canadian Sniper" Garry Chernoff who bought names to keep. After a young man named ‘Yun Ye’ came on the scene, nothing good could be kited any longer.

Jerry ultimately sold his interest in MailBank.com. He told me his story in the early 2000’s .. Mailbank went on and re-branded into ‘Net Identity‘ which was acquired last year by Elliot Noss, CEO of Tucows (in a simply brilliant move). The selling price was cheap given the business and organic traffic flow that those names generate. 

So when people today tell you: "Nothing good can come from Domain Tasting",  I encourage you to remind them that at least 1 major Internet concern was built on the foundation of that practice. That concern was acquired for 18 million in cash by Tucows and will be worth 100’s of millions one day.

The modern history of the domain business sure reminds me of the history of Las Vegas and its fabled strip.  These are only the Vegas 1950’s of the domain biz..  Wait till the domain industry’s Steve Wynn arrives to leave his footprint on this space. You ain’t seen nothing yet.

It’s funny what you remember about the domain business.  I remember Garry Chernoff hanging on the phone with me years ago and him emailing a snippet from his coveted .com hold list. This was an older list so all the names in the list had popped (deleted) already.  Garry and I scrolled the list together (a section from the letter ‘ s ‘ )  and up came shrouds.com  ..  I can still hear Garry going on about "Shrouds" and all the great things that term represents..  "They can be engine shrouds,  there are religious shrouds..  I bet you could create a business just selling ’shrouds’ of one kind or another" .. then he said.. Hey, it’s still available!..  why don’t you take that one Frank?"

I reached for my credit card to buy what would probably be a worthless domain name.  Garry hastily got off the phone and I perused the rest of the list opting to buy one other name:  "Sleepdeep.com" (I had just sold an antique brass bed privately and thought I might open an Internet based sleep/bed shop one day). The next year I couldn’t afford my renewals and I let sleepdeep.com expire..  I meant to let shrouds.com drop too but accidentally hit the renew button.  Sleepdeep.com went through its expiration cycle and was gobbled up by Yun Ye.

Yun sold his names to Marchex, so now sleepdeep.com lives in Seattle.

Moral is, If you believe in your names, pay your renewals (even if it hurts a bit).  I believed in sleepdeep.com more than shrouds.com but was just too dumb to renew the correct one.  In retrospect I should have kept both..  This funny little story is to show that we all get it wrong sometimes.  The difference between success and failure is just getting it right more than getting it wrong.

Auction prices on generic names keep climbing..  even I’m starting to feel the pinch ..  Who are these savvy wisemen besting you and I at the block?  Banks?  New Investors? Ebay, Yahoo, Microsoft?  Nope..  the bellwethers are not the ones coming around…  A lot of the big/quiet buys are traditional "mixed portfolio holders" abandoning TM’s under the specter of potential litigation and moving to the generic side with a renewed vigor and determination (or so it would seem anyway). This is good on several fronts.  One, it shows many folks see the unsustainability in holding trademark intent names for traffic (a maturing of the industry). Secondly, it reaffirms your foresight in taking the more difficult road so many years ago and avoiding overt well known corporate trademarks/ typos.

This is a healthy change for the industry, but man does it smart to see some of these prices :) 

Vern says:  "Good for Nelson"  and..  "All the better to own a boatload of generics".

http://www.mickeynews.com/News/DisplayPressRelease.asp_Q_id_E_3237Hogs

You read about this type of story all the time. It shows how you can "predict the future" through domain names that companies register:

Quote:  "The Disney Enquirer has unveiled their Spring edition of Disney Domains, showing us all the various domain names Disney has registered as of late. And yes, among them are WildHogs2-Movie.com, WildHogs2DVD.com and WildHogsMovie2.com."

Clever analysts and techies have been working together to try to predict mergers and acquisitions in this manner for years..  What’s interesting about this story is that Disney basically acknowledges as much by staging a release about their domain names through their own "news".  Expect more of this in the future.  There is no way around registering your name..  you have to do it…  you can’t hide it.  Wait too long and the public (or an insider’s cousin) snaps the name up…   register too early and tip your hand to the press who are watching your registrations.

http://www.bloomberg.com/apps/news?pid=20601109&sid=areHiKV82ocE&refer=home

“It sounds like they’ve really found a formula that could cause that revenue to reaccelerate,” said Walter Price, a fund manager at RCM Capital Management in San Francisco that oversees $152 billion including Yahoo shares. It still will be a tough slog, he said. “Google isn’t sitting still.” ..  and ..

“I suspect that they are holding their breath to see if they can get long-term continuous improvement,” said Ellen Siminoff, CEO at Efficient Frontier Inc., an ad agency in Mountain View whose clients include Web loan company LendingTree Inc. “This is a beginning, not an end.”

Both correct IMO ..

“Click-through rates” on Yahoo ads rose 5 percent in the week after Panama’s debut on Feb. 5 from the week before, said Reston, Virginia-based ComScore, which tracks Web use. The rate rose 9 percent the following week. "

That’s  a 14.5% compounded increase in CTR..  Let’s see what happens with bid prices.

Dear Neiman Marcus,

I think it’s teriffic you are protecting your mark.  My wife is an avid NeimanMarcus.com shopper and she gets the page of one major cybersquatter over and over and over when she hastily types your URL:

http://search.live.com/results.aspx?FORM=DNSAS&q=www.neimanmarcus.xom

Everytime she fat-fingers the .com extension with .xom or .comm or .cpm she gets to these ‘live’ guys…

You know, these Live.com folks have built the 6th most popular site on the net in a very short time, yet I don’t know anybody who types-in "LIVE.com".  Your site NeimanMarcus.com is the 1,528th most popular site online, yet the Yahoo keyword popularity tool illustrates that your little website (#1528 online) actually gets more type-in traffic visitors than the sixth largest site on the Web! :

I wonder where this sixth most popular destination site in the world gets all those visitors from? Could it be people like my wife, typing your "Neiman Marcus" and others sites with .xom, .cpm, .comm (and other variants) instead of .com?

Here’s the owner of this Live.com site in case you’d like to take the issue up with them:

   Microsoft Corporation
   Domain Administrator
   One Microsoft Way
   Redmond, WA 98052
   US
   Email:

Sincerely,  Frank.

PS   My wife is really looking forward to your summer sale.

http://www.foxnews.com/story/0,2933,260822,00.html

slow news day on the tech desk..  quirky piece on long domains in euroland..

http://www.cantonrep.com/index.php?ID=343999&Category=5

…  nothing to add here.. short basic Q&A

It is hard to bet against the .com extension.  Even the most strident supporter of alternate GTLD’s and CCTlds will concede that the .com extension’s brand power is hard to undo. Too many sites have been built there,  too much money has been spent on global branding.  Think of every business card in your Rolodex, every yellow-pages ad, every billboard, bus-bench, TV and radio spot.  Dot Com  (and the CCTld of the Non-US Country you are in) bubbles-up through the collective conscience of all people who think: "Internet".

Funny thing is, a lot of poignant, generic .com names don’t get very much organic type-in-traffic each (considering how meaningful they are).  Take a name like CrossStitchPatterns.com.  That name has enormous resonance.  While you and I may not be logging on anytime soon to seek out Cross Stitch Patterns; in the Month of February,  9010 people searched for that phrase across Yahoo’s network. That’s more than 300 people a day seeking out that search phrase at assorted third party search-pages powered by Yahoo (and at Yahoo.com itself).  Compare that to the 4 unique type-in visits a day this name generated on its own.

Don’t cry the blues for the name’s owner.  4 consistent type-in visits each day on a generic name like that is actually quite good. These visits come for free, without referrer — based purely on type-in to the address bar as a result of this name’s meaning and resonance. You can not get less visits to this name as none come via the search engine, the only way is up.

So I searched "Cross Stitch Patterns" at the leading search engine and noticed the paid search advertising on the right side. These are advertisers who want to buy traffic under the matching cross stitch key-phrase. As I reviewed the URLs of the advertisers, none of them contained "Cross Stitch Patterns" .. we have michellesneedlecrafts, adventures-in-stitching but no exact match for the search string. What do you suppose would happen if I advertised my URL under the key-phrase that matches the name?  Well,  I tried it and I found that because my URL matched the key-phrase people were searching for,  I had to bid less for traffic.  People were more apt to click on a link when it matched the URL..  and the power of .com just reaffirmed to Jane Public that she had found the market leader. The same psychology that makes a great domain name get organic type-in visits, helps the advertised URL to get the attention of the shopper in a search marketing setting. It is difficult to change human behavior.

I went through this little dog and pony show to illustrate my belief that in a few years time the worlds largest SEM, traffic arbitrageurs will be those who own large portfolios of type in traffic domain names with high Overture counts (keyword apart).  Why?  Because if you get four organic visits across hundreds of thousands of domain names,  you will be in a far better position than a naked arbitrageur to take-on a few thousand arbitrage plays paying 35cents at Google and selling to another market/advertiser for as low as 35.5 cents ..  The naked arbitrageur without the type in traffic domain portfolio has no cash-flow driver to prime the pump and compete at lower margin levels.  It would drive them out.  Couple that lack of organic cash-flow with the fact that the keyword-weight of high search-volume domain names will always help their owner to draw more clicks in an arbitrage setting (and ultimately pay less for traffic because search algo’s reward sites drawing more clicks) and you can see why I say; the house always wins. Buy generic keyword domain names with type in traffic (and high "apart" search counts, cuz that’s where the searches/people are) and you ‘become the house’.

I blogged about this poor guy about a week ago.  "Can you help a fellow American who’s down on his luck" (with some advice)?

"Frank some one sent me your link because of my release March 20 about the unemployed laborer I am that person Steven Hafto, Cut to the chase, what can I do? How do I do it?
What I wrote is just the half of it. You probably won’t believe how bad it really is. I am not looking for sympathy I need help I am looking for help, any help……………..Thank you 
You can give my e-mail out i am open to any help thank you."
Steve@FollowMeForFree.com

Vern says:  "Either this guy really wants help,  or it’s the most elaborate phishing/confidence scheme ever."

http://www.cheaphostingdirectory.com/news-domain-investment-talk-radio-show-premieres-2887.html

New Radio show about domain investing on Voice of America’s business channel no less… Amazing how this industry is evolving.  Except rumor has it,  the show is more like a timeshare sales scam… looking for feedback from listeners.

http://www.thestreet.com/_googlen/newsanalysis/technet/10346019.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

…  Well we can all sleep better now.  This is the biggest placebo I have seen in paid search. The vast majority of the surfing and advertising public doesn’t understand that Yahoo and Google already do an excellent job screening their system for invalid clicks. The ad market is just that — a market.  If click-fraud were the tidal-wave that the old world media makes it out to be, average click prices would be 5 cents instead of 50 cents.  Click-fraud is a problem that is well in hand at the major pay per click marketplaces.   

The biggest problem in paid search is not Click-fraud. It is Advertisers who incorrectly label their own inability to execute (draw sales conversions) as Click-fraud. "The Click-fraud Crutch"

But hey,  you want a Click-fraud Czar to make you feel warm and fuzzy?  Yahoo will give you a Click-fraud Czar.

http://www.theregister.co.uk/2007/03/22/icann_registerfly_reform_registrar/

Summary:  That Paul Twomey is no slouch.. having fiddled as Rome burned only to see every major media outfit in the world pick up on the fiasco and point the finger back at ICANN for failing to act in timely fashion;  ICANN is now making themselves look busy with some "reforms".  This Registerfly situation is the domain name equivalent of FEMA’s response to Hurricane Katrina..

I think certain ICANN staff just blew it. I knew there were problems at that registrar.. many others did too (and we’re outsiders). So the negligence on the part of those in charge for failing to act sooner is reprehensible.

That said, in the interest of Global and US economic security, we need a strong ‘well run’ ICANN.  The Internet naming system and regulatory machinations around naming are absolutely vital to US centric commerce and global trade.  We can not — "must not" see the Internet run through some nebulous UN arm where those placed in charge are likely to be confused, befuddled, self-serving and anti-capitalistic.  That would be catastrophically bad for US interests and for the Internet (in my opinion).

A modern information society needs a strong, consistent ICANN, but the organization has an unholy culture that snakes to the top. There are some narcissistic, indifferent policy wonks in that organization (board and staff) that need to "cleaved out" so the remaining organization and decent hardworking people there can run the org. more effectively; and for the benefit of all netizens. Lack of consequences, leaving existing staff/leadership in place would send exactly the wrong message and lend support to those who wish to move global naming oversight to those who do not have economic prosperity and freedom at heart.

http://blogs.business2.com/beta/2007/03/google_fewer_ad.html

… We have noticed the same thing on parked pages..  Or replacing paid search results with content.  This looks like an industry wide trend to me.  Should ultimately increase RPC.

http://www.techworld.com/networking/news/index.cfm?newsID=8328&pagtype=samechan

Summary:  Government says it sold it’s domain extension for $24 in glass beads and wants a re-do.  Can you imagine if this type of thing started to gain traction, theres a coup or something and the people of Tuvalu reclaim the .TV  extension?! 

Paul, Richard ..  Time to invite the Tuvaluians to LA or Seattle for a little feel-good team building exercise. 

Years ago I mentioned my underlying philosophy to a friend in the domain business and he never forgot it.  I still remember the evening.  We were out for dinner with our wives. It wasn’t me who said it to him, it was my wife.  I had told Michele my philosophy several times over the years and she spoke my opinion for me when it fit into a spot in the conversation.

Successful businesses are always growing. They don’t have to grow in the same way mind-you, but they do have to grow.  Whether you’re taking on leverage and grossing up through acquisition and merger; or just growing organically. There is no such thing as a perfectly flat line. There has to be growth or there is decay.

Had I known how my friend would run with my philosophy, I may have thought twice about letting that pearl of wisdom escape. Then again, that colleague could completely change the domain industry in the years ahead, so in a funny way, I also feel proud to have planted the seed.

Over the last few months we have all noticed some subtle (and not so subtle) changes in PPC programs.  By and large they have been revenue negative.  A lot of this has to do with internal modifications at the dominant keyword marketplaces relating to click-fraud and improving their ad markets. Google has become a juggernaut and against their success, they have become emboldened to make changes that their publisher partners have little visibility into.

Years ago I chose Yahoo as a publisher partner for a few reasons: 

1) Google has Google.  Google is in a position to call the shots against their publisher partners because they can leverage the visits they get to Google.com (the search engine) against any traffic you or I might be able to drive to them. "You want what?  Why should we listen to you? We’re Google ".  While that line is overly simplistic, it sums up my fear in selling traffic to the all powerful master of Search.  In addition to their negotiating position, Google has "black-box execution". They throw a big black box of mystery around everything.  A "black box" is like saying:  "Send us all your traffic, we’ll pay for what we think is good and then we won’t tell you how we decided."  That makes me very uneasy.

2) Yahoo was transparent.  Historically speaking, I could see into Yahoo and their statistics talked plainly about PPC, CTR, Coverage, Bidded Clicks, Searches etc. Also, Yahoo has few major growing search properties of their own.  Without their publisher network they would be in a good deal of discomfort.

So here we are today. Google has grown very big and put Yahoo in a great deal of discomfort.  I have even heard Yahoo insiders suggest that Yahoo could plug its entire Yahoo Ad Network into Google and arbitrage the payouts against nearly 100% (negotiated) rev-share. Very clever.  Let GOOG carry the weight of staffing, and infrastructure on their side. YHOO would just cash checks like an Adsense publisher. Yahoo has not plugged their PPC network into Google yet for at least two reasons: Pride and Fear.

Pride = Google beat us?!  Never!!
Fear = If they beat us and we fire all our staff, Google will change our rev-share at some future point and hollow out our advertisers/publishers — We will be powerless once we "put it down".

So it’s a cold war stalemate of sorts. Google keeps trying to consolidate its lead by rolling out changes that make more money (ie. CPA). Yahoo keeps modifying their ad network to copy what Google is doing correctly (ie Panama).

Running on a parallel track, you have Microsoft (watching, learning) trying to roll out an ad network of their own, to compete with Google and Yahoo.  That is ultimately good for third-party publishers as another viable ad marketplace is born.

As these machinations play themselves out, it occurred to me:  Today, Google is like Yahoo was years ago, vulnerable in the sense that they have stopped growing as quickly. With every day of slower growth Google moves towards dying.  In some respects , Yahoo has already seen decay, they recognize they are the underdog now, and are moving to gain ground. Through another optic, you could argue that Yahoo is growing again. It’s still early and they may ultimately not execute; but Yahoo is a good position to do something disruptive. It’s when the chips are down that people are more willing to mix things up and take risks.

In my opinion, the winner of this game will be the paid search network that excels at rolling up (and permanently retaining) their publisher partners; and the publishers themselves. Many third-party publishers control an unusually large percentage of high quality traffic. The Domain Name channel is a good example. These folks deliver very good traffic to one ad market or another. What surprises me the most about Google and Yahoo is that one of the most integral parts of their enterprises (the publisher partners) bring in a significant percentage of revenue; yet those partners are available to anyone.  If I was running these two paid search networks (or the third comer: Microsoft), I would be buying 5-10% of every publisher I could find.  Get a minority stake in the traffic source as Google did with AOL, so that they do not leave for the competition. That is what network control is all about.

Google is raking in cash and IMO they are blowing the opportunity of a lifetime.  They should be saying to every single domain and content publisher of significance: “We are the dominant / ad market..  Sell us 5-10% of your enterprise and in exchange we’ll give you BIG% rev-share. That way they assure that if somebody invents another Google to compete with Google, they retain some ability to shape destiny by owning and controlling a network of others.

Yahoo and Microsoft should consider this approach as well. They have the cash and they too know where the high quality publisher bodies are buried. Pony up now and you solidify your traffic supply into the future. 

Regardless of whether they consider this advice, the next few years will see power return to the publisher as ‘somebody’ takes advantage of this golden opportunity in time to sieze on the obvious (and my underlying philosophy):  If you’re not growing, you are dying.

"ICANN knew what was going on, yet they waited and let this train wreck happen," says Philip J. Corwin, counsel for the Internet Commerce Assn., which represents companies that own domain names."

http://www.businessweek.com:80/magazine/content/07_13/b4027077.htm?chan=search

You would never have heard somebody speak for registrants in a BusinessWeek piece like this prior to the ICA..

"Um, yeah. Lemme have, okay yeah, lemme have a Three Musketeers, and a ballpoint pen, one of those combs there, a pint of Old Harper, a couple of flashlight batteries, and some beef jerky."

http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=57491

Quote: "Yahoo is poised for as comeback–fueled by its acquisitions of social-networking service Bix.com, video service Jumpcut, and the six-week-old Panama online advertising system"

Summary:  Bix?  Jump Cut?  .. (even Flickr)?  Give me a break already.. The "money" comes from Panama..  Semel is smiling because he figured out that Google puts thousand-islands dressing and mayo in their secret sauce and he is now serving a similar sauce.  Its all about the Panama.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/03/22/cngoog22.xml

A lot of domain forum chatter about this today.

Bottom line: IMO click fraud has been managed to nearly zero by Google and Yahoo. This has happened on the publishers back.  It’s no coincidence that you are making less money this year as these "announcements" come out.

Lastly and most importantly:  Domain name type-in traffic converts into sales at a higher rate than search-box, search engine traffic. Trademark traffic converts into sales better than generic intent traffic. This is good news for anyone who holds a domain name.  Bring on the new model!  Google @ $460.  I’m sure Google knows this is going to take their stock to 500+ or they would not do it .

Quote:  "Skin that smokewagon and see what happens" — Wyatt Earp

Vern and I were talking about Star Trek ..  and he reminded me about that episode about the tribbles..  little furry animals that were cute and adorable, but kept multiplying and multiplying..  threatening life on the Enterprise.

Foolish comment from the misinformed here.  A