Seven Mile

Conor writes:

“”I am giving fullname.com domains as gifts for Christmas this year. Any suggestions on how to give as a gift? I am thinking about just registering and hosting myself and if they want to take full control I will transfer it to an account they create. Otherwise, I’m not sure how to register in another person’s name easily (have to create and verify whois info for them and setup payments for them, etc.). Asking Elliot the same, but not sure if there is an easy answer. I know the domain gift card idea has been mentioned previously, but how about just gifting domains in general?”"

   ***FS*** Giving a name domain gift can be a big responsibility ..  and if done correctly, can really change a person’s online life.  I would renew the name for 10 years upfront..  spend the $100 or so, so that the name doesn’t expire right away..  I’d set the name up in a seperate account with a top-tier registrar and a very easy to remember password (unless the name is bobsmith.com it’s unlikely that somebody will try to hack the account and hijack the name) .. You want an easy password because the person receiving your gift may not be net/name savvy and may let their administrative email address lapse at some point over the next 10 years and you don’t want to loose control of that registration.  Conversely you could manage the name on behalf of the gift’s recipient..  I’m still managing family gift names ..  my oldest one is 7 years now.  I couldn’t buy that name back today and have actually had offers to sell the name, so you are doing the right thing..  It’s entirely likely that you won’t be able to get your desired .com first and last name in 5-10 years time.

Tia Wood asks:

“”Frank, after looking at a thread at DNF titled “Why Domains cost what they do…Your Reasoning?”, I don’t feel anyone has hit the nail on the head. To me, why domains cost the what they do has largely to do with reverse branding: the ability to reverse brand a word for a company instead of a company for a word. The same goes for branding words for individuals or organizations, etc. But the value lies within reverse brandability, correct? Which brings in a higher quality of consistent and valuable traffic. What’s your take on it?”"

***FS*** I often hear secondary-market domain sales and names referred to as “powerful” or “expensive”. Not all domains are powerful of course..  And why exactly are the powerful ones considered powerful?  Well..  As I’ve explained previously if you buy a good, meaningful, generic domain which garners some measure of organic type-in traffic for nothing more than the keyword weight of the name itself;  you essentially have a storefront with guaranteed visitors coming into your door and strolling past the merchandise.  Typing in a domain isn’t necessarily like a good storefront in a high traffic location,  it’s more like the gift shop at the end of a theme park ride that you have to pass through to leave the ride.  Only these visitors aren’t looking for the street..  they have self qualified the topic they seek by typing that particular domain name. In the real world you have to pay to lease the space, put in lease-hold improvements, etc, etc.  On the Internet, window-dressing is cheap..  the storefront and improvements which bring the visitors in “are the name”.

People often tell me domains are “”soooo expensive”"… They ask:  ”Why would I pay $10,000 or $20,000 or $50,000 for a great name when I can make up another name for less?!?” 

   Well if you buy a name like the one described above with organic,  generic-intent type-in type-in traffic; 10, 20 or 50 thousand dollars is not a lot of money.  Years ago I worked in marketing consumer electronics and we purchased full page magazine ad-space in “gamer” magazines for $15,000 for the month..  That’s one side of one page, for one-month… and that didn’t include artwork.  It was just to build nebulous concepts like “mind-share” with the gaming public.  You can’t put mindshare in the bank folks.  Had we bought a great domain for $15,000 (and we could have gotten gaming.com or games.com for $15000 back then) we would have gotten millions of yearly visitors forever;  for nothing more than the price of the renewal fees.

   The other dynamic at-play is scarcity.  With 100 million domain names registered how can they be seen as scarce? Well most registered domain-names are either “terrible” in quality or are specific to a certain branded product or service.  On any given day, a random slice of the name-space expires for non-payment. 15,000, 20,000, 25000 names expire each day.  I have watched these expiring name lists every day, for the better part of a decade.  These lists are a virtual “boulevard of broken dreams” ..  names which people bought with great hope, only to allow them to slip away after they had some emotional change of heart or after they forgot to renew them. 90-95% of these expiring names are complete and total crap.  You could make-up better names in the unregistered available pool.

The remaining 5-10% are names which could have some traffic or some value to more than one person.  Names which could be called meaningful, powerful or generic. That’s 5-10 million domain names globally.  It doesn’t take a mathematician to determine that there are just not enough great names to go around.  It’s not possible for every person or company to have even one “good” registration.  That shortage of supply and global demand keeps prices high…  and will for years to come.  In fact if the examples above show anything, it’s that great domain names are “still” cheap.

Thomas Price asks:

  “”…how do you know when an unregistered domain is good enough to be registered? I find domains all the time that I think are great domains, but if I registered every domain I found, I would be bankrupt by the time it came around to renewing them. I’ve got a list of over 500 unregistered domains that I think are great domains – while only a few of them are great names for “type-in-traffic”, almost all of them are “two or three stackers” in advertisemnets on Google. (The term comes from Jay Westerdal)

I think all of these unregistered domains could developed into profitable websites, but how do I know when to stop registering, and start developing? (How to cut loose of what I think may underperforming names in my porfolio).. I’ve always had a few domains that really outperformed the others, including on single domain that averaged over $500 a day in clickthroughs (until Google caught wind of it and torpedoed my organic search ratings.) I still have several GREAT performimg domains, and am always looking for that next star performer.”"”

***FS*** A bunch of great questions here.. There are different philosophies for buying names and many right ways to do things in the domain business.. A few days ago on the linkfest I blogged about how Stephen Webb was turning trafficless lemons  into lemonade with his “We Are *City* ” .com names.  This type of story emboldens every theme-name holder from the good (”e” names, “i” names, “my” names) to the horrifically bad (hotb2b name, names) ..  In the end you need to use a little pop culture, instinct and search volumes as guide posts.

Firstly if the names you are interested in are sitting there available in late 2007,  then it’s doubtful that they have any material traffic. Somebody would have scooped them up by now via tasting or via the expiring name drop (if they were formerly owned).  So what you are speaking of are names which “look cool”,  which ”could” get traffic, or which are “easy to remember”, or which would be “easier than other names” to build traffic to.

I would caution you against taking the Google or Overture search-term popularity tool results too literally.  Some of the worst names are procured using these tools.  If the name ranks highly in Google or Overture,  and it got any merchantable traffic at all (high search count names typically get some traffic), then it would already have been registered through the drop (if old) or through domain tasting (if newly invented term)..  There are the odd stragglers which may have been missed,  but unless tasting stops,  it will be very difficult for the available-pool to replenish with ‘new vernacular’ traffic names.

The Overture tool may say that “psychic reading free” gets 12,000 searches a month but may not serve results in order..  the correct order for the domain name would be freepsychicreadings.com (plural) ..  that’s where the organic type-in traffic component of those 12,000 monthly searches lies in domain-form.  Had you bought the wrong order or the singular tense, you will get less or no traffic.  Building traffic via search engine optimization or making money via paid search keyword arbitrage are similar..  The correct tense,  the most appealing order will convince the human visitor to click.

   You would be much more successful (draw more clicks) arbitraging traffic under the bidded keyphrase “psychic free reading” if you you used the domain freepsychicreading.com.. Yahoo groups less popular keyword orders together for paid-search purposes..  so if you take their suggestion too literally as a domain procurement tool,  you’ll buy the wrong order.  My advice is to watch more MTV,  see what the correct phrases are..  use pop-culture, television and magazine covers as guideposts to steer you in the right direction relating to conceptual names.

You’ll buy better names and make more money selling them that way. 

Lastly,  If you have names you’ve been carrying for years and they get no traffic and they get no whois lookups (whois lookups are useful for determining sales potential because they tell you how often others tried to see if the name was available to register) then you should dump those names.. I never let any names expire,  but I have friends who try to explore for unregistered names similar to those they are considering deleting..  If they find that all related names are registered,  then they keep their name for another year.  If they find other names available and ‘their’ name gets no traffic or whois-lookups,  then they release the registration. 

Hope this helps.

Robert writes:

“”Hi Frank,

I’m brand new to the Domain industry, having recently sold my software company earlier this year.  I’ve been reading the blogs to learn and will be attending DomainFest and TRAFFIC next year to learn more.

I think the domain industry will keep me engaged, and my instincts say that even for a newbie like myself there is still money to be made and fun to be had in this industry.   Many have told me that I’m too late to the dance and missed the boat, but my gut tells me otherwise. 

So, my question for you: If you were to start over today with $250k to invest and the goal of being as successful as you are now, what would you do?
  
Regards,

RM”"

***FS***  Firstly you’re absolutely right.. there is still lots of money to be made and fun to be had in the domain industry.  Historically this business has been the compulsive’s best friend..  the more impulsive and expedient you were the better you did..  ADHD was actually a benefit!..  If you didn’t act to secure those valuable domains “now”, somebody else would.  Today is different..  we are at an interesting point in the evolution of the space where the primary namespace is fairly mined out.  Domain tasting has vacuumed many longer-tail type-in names out of the available pool and most of the good type-in traffic names are held by existing registrants. 

In the next 2-3 months we’re going into many company’s financial year end, so people will be spending money on domains giving the overall space a lift..  That isn’t a great time to acquire names.  I would attend Domainfest in LA..  go easy on the booze at the parties and listen to anyone who will talk about their story.. Take it all in..  speak with the exhibitors and ask smart questions about their specific niches to get an idea of where the lowest hanging fruit is.

I’d look at putting some of your money to work in Feb or March after holiday credit card bills start to bite individual name-holders. Buty names for a few thousand or tens of thousands depending on the value of the name and traffic..  don’t spend too much on any specific name in order to spread risk.. I would try to spend 10k a name but really look for prime stuff..  Names with treal trafic and obvious break-up value.

When I started buying domain names you could register large tracts of traffic producing names across many different verticals..  Today,  I think it’s smart to focus on two or three niche’s depending on your interests (ie.  auto sales leads, car wheels, car insurance)  The names you choose will help lead you to industry specific conventions, you’ll learn about the industries that interest you..  it will be a great journey.

If you just want to flip names the buying season is March through September .. by October everyone is talking about growth in Internet traffic and Tax related purchases pretty much end in Late February, so that’s a good time for sales.

The wild-card in all this is the US dollar and credit markets.  If things keep going badly,  there will come a time when it will be great to have cash and you’ll be able to secure some outstanding name deals if you have that cash.  The key is keeping your nerve and cash in pocket while your instinct tells you to “spend the money” before the dollar falls further..  

Hope you can apply something from this.

Ask your question about domain names paid search or anything I post about, and I will do my level-best to answer you.  Select the Comments text below: