Rick Latona, a self-proclaimed serial entrepreneur, has been making waves in the Internet business since there was one. In the mid to late 90s he was an executive at Interland, Inc (now web.com) a hosting company which he helped take public. He owns an outsourcing company (Offshoring.com) with offices in The Philippines and India which employs nearly 2,000 people and was the first person to loan money on domains when he launched DigiPawn.com in 2003.
Rick is now one of the largest portfolio holders of “trophy” domains which is constantly changing due to deals he is making. His email announcements of “daily domains” has been averaging $200,000 a week in sales. Many of Rick’s domain transactions have made DNJournal’s weekly sales report, several coming in at the top of the list.
5 With… Rick Latona – Internet Entrepreneur
5 With… Lonnie Borck, Founder, netRocket
The first word that comes to mind when thinking of Lonnie Borck is the Yiddish word “mensch,” meaning a good person. I haven’t told anyone this until now, and I hope Lonnie doesn’t get upset, but he and his partner are behind the best deal I’ve ever made in the domain business.
I wrote about it in greater depth before, but the short story is that Lonnie and his partner made a very substantial offer on a domain name I owned, knowing all proceeds were going to a non-profit organization we all support. This was all precipitated by a chance meeting with Lonnie’s business partner as we were exiting the restroom during the TRAFFIC show in New York.
Since our introduction and subsequent dinner, I’ve had the chance to get to know Lonnie better, and come to find out just how active he has been in the domain community. Lonnie first started registering domain names in 1998. Using a dial-up connection in Edison, New Jersey, he would search through the NSI drops until the early morning. The first name Lonnie ever registered, for $70, was Offlease.com (he was a reseller of off-lease equipment), which still generates a good amount of revenue today.
A year later, Lonnie moved to Baltimore to become Director of Marketing at his friend’s highly successful company, Poetry.com and Picture.com. That friend was also his first investor. Through this experience, Lonnie learned a lot about the power of Internet advertising and the money involved. Though intriguing, it wasn’t enough to pull him away from the business of his dreams, owning a restaurant.
An opportunity came about for Lonnie to take over an upscale kosher steakhouse in Baltimore. He jumped on it, and a year later, he opened a brick oven pizza place. Running two restaurants didn’t leave much time for domain investing, as he would be working from 9 am to 1 am. He would get home in the early morning and then sit down at the computer and start domaining – quite rough for someone with a family. Lonnie’s wife is a graphic designer (which certainly comes in handy), and they live in Baltimore with their family.
Recently, Lonnie left the restaurant business and now works on his Internet ventures full-time. He is currently launching a start-up, netRocket, with his web development company. Netrocket is a bookmark scheduling service that allows you to collect, edit, and schedule your bookmarks for viewing when you want to view them. This is a unique service, and I predict it will take off!
EJS: 1) How is netRocket different than most comparable sites, what advantages does it offer registered users, and how does your company intend to generate revenue from the business?
LB: “netRocket.com differentiates itself from comparable sites by focusing first and foremost on the individual and their needs. The business idea stemmed from a true practical need that we felt was not being adequately addressed. We carried out one-on-one sessions and discussion groups with a diverse group of real-world users to ensure that we were solving the problem at hand. Our goal is to provide a free service that helps people manage their time and keep track of all their online information in a smart and efficient manner.
Smart bookmarking services are no longer enough. One needs a service that helps organize and schedule their online resources in an efficient and pragmatic manner. I’ll give you an example: I frequently discover interesting things while I am surfing the web. One minute I’ll discover an auction that ends in 3 days and later on I’ll be reading an article about something and discover a couple of other sites that look like they may be of interest to me but I simply don’t have the time to look at them then and there. Then an e-mail comes through from a friend or colleague recommending that I look at a viral video (or some other online resource) and now I have something else that I’d like to get to at some point but it’s simply not practical to do it at that point in time.
So what I really need is a way to be able to organize all of these things along with other essential items such as credit card bills, online news and weather and so on. I schedule an e-mail reminder for the auction that fires off an hour before the auction ends, I place the other resources in my ‘To View’ list so that I can find them easily when I have some downtime and I save the other useful stuff I’ve found permanently in the site. That’s where netRocket.com comes in. It goes above and beyond the other sites that are out there and lets you tackle all these things with the click of a button using our browser toolbar buttons.
We will continue to add bells and whistles as we move forward, but what makes us different from the others is that our focus is primarily on you – the end user. We have a strong business plan in place and revenue is going to come from a few different angles with the primary one being highly targeted advertising that is automatically generated based on the things the user likes and dislikes. We are also working on ways to make the advertising effective without being obtrusive. We consider ourselves as part of the user base since we are all avid users of netRocket, so we don’t want to do anything that will diminish the usability or overall feel of the site.”
EJS: 2) What are the favorite feeds that you currently have in your netRocket Mission Control panel?
LB: “My main use for netRocket is for organizing my domain name auctions, articles and useful resources. I have all of my favorite auctions, drop lists, blogs and useful tools/resources scheduled on a daily basis and every time I come across an interesting article or a name I am potentially interested in, I add it to my ‘To View’ list so that it doesn’t get lost. The great thing is that I can catch up on my domain research from anywhere using this method. I have pretty much everything I need in there so it gives me an edge at the end of the day when I am working on my domain real estate. I am also a huge football fan and I have a lot of sports links so I can keep track of the Philadelphia Eagles when I’m not in my seat at the Linc.” (EJS: I am a die hard Pats fan, so I must interject a big BOOOOOOO!)
EJS: 3) Since netRocket is currently in a Beta test phase, what enhancements do you plan to make during the official release?
LB: “We have just moved into public beta so anybody and everybody can now sign up and use the site for free. The private beta phase was used to iron out initial bugs and to get more feedback from a core group of users. We are strong believers in taking note of all user feedback and incorporating as much of it as possible as we strive to offer a service that provides the maximum benefit to our users. So we are currently working hard on integrating the key features that have been proposed. The biggest enhancements you should see in the very near future are seamless integration with mobile devices as well as making it even easier to add links to the system even when you are not sitting at your computer. We have a few more tricks up our sleeves but you’ll have to keep using the system to see them unfold.”
EJS: 4) You were once involved in the restaurant business. How has that experience helped you as a domain investor?
LB: “The restaurant business is one of the toughest and most demanding businesses out there. If you’ve survived the experience of owning and running a restaurant then you can conquer just about anything. One of the positives of owning a restaurant is that you get to meet people from all facets of life and this in turn broadens your outlook on things and arms you with a lot more knowledge and insight on trends and opportunities. I came out of that experience with more tools in my arsenal than the average Joe as I have seen it all and have developed a profound understanding of how people think and act. This has helped me tremendously as a domain investor as I have a knack for what people get excited about and where the money is at. I am also a lot more resilient than the average person so I am willing to take on more risk and in turn the reward is there for the taking.”
EJS: 5) What advice would you give to people who are involved in developing an online business?
LB: “The most important thing is to work with people that are smart, hard working and hungry. I associate myself with the best of the best and I am willing to take chances and to persevere in order to attain success. Nothing scares us technologically and we are confident in our ability to outproduce our competition. If you are working with great minds and you are willing to work hard at it and do whatever it takes, then this is one of the most rewarding businesses.
The Internet is shaping the future of our lives and there is nothing greater than being a part of that. Just make sure that your expectations and resources are in line with the reality of things. The other important piece of advice is that you need to be open to criticism and challenges. My business partner and CTO of netRocket has a tag called ‘Inspiration’ in his netRocket.com page that contains all of our competitors from various projects that we are developing. Instead of focusing on them negatively, we use them as an inspiration to attain greater success.”
5 With… Jessica Bookstaff, PigeonForge.com
With hard work and determination, Jessica Bookstaff has become a successful Internet marketing entrepreneur, owning popular geographic websites such as PigeonForge.com and Durango.com among others. Clients, partners and colleagues love working with her because of her contagious enthusiasm and bubbly personality, coupled with her intelligence in the geographic marketing space.
Since acquiring PigeonForge.com in 2000, Jessica has been developing the site with a firm belief in original content, electronic newsletters, visitor interaction and satisfaction. She believes that one of the keys to success in the city.com industry is a clear understanding of customer and market needs. Jess and her websites are ambassadors for the cities they represent, and she does a fine job at that. Clearly she is onto something, as the site has grown 1,400% since she took the reigns.
Jessica has been active in the Internet industry since 1998 managing marketing and public relations efforts for a mature start-up company. She enjoys the challenge of implementing effective site design and content management with a goal to increase overall revenue. She is actively involved as a board member of CASA of East Tennessee (Court Appointed Special Advocates) and a board member of Associated Cities. In her spare time, she is a volunteer with Junior Achievement and the Boys and Girls Club of the Smoky Mountains. Jessica lives in Knoxville, Tennessee with her awesome dog, Jackson. She enjoys running, biking, and the occasional dance-off.
EJS: 1) For geographic domain names, is .com considered the king, or are other extensions just as good if the intent is development? Is it worth paying a considerable amount more for the .com over another extension?
JB: “I am a purist. I truly believe that .com is the best extension by far, and I believe this will always be the case. .com is branded just as Coke, Kleenex, or Xerox are branded. It has become a generic term used describe and entire industry. This being said, it is absolutely worth paying considerably more for a city.com domain. I have passed on purchasing many other city names with alternative extensions. Saying this, I would never discourage anyone from developing their domain be it a .com, .net or .whatever.”
EJS: 2) If you had the opportunity to acquire a phenomenal geographic domain name, but you had no interest in that particular geographic area, would you buy it and develop it, buy it and resell it to someone else for a profit or pass on it?
JB: “Casting my emotions aside, as long as a) it were a sweet name and b) there was viable business potential, I would buy it and develop it – Absolutely!”
EJS: 3) What are you three favorite geographic websites, and why (other than the ones you own)?
JB: “There are so many I like and for different reasons, but if I must, I will only give you three …
Saratoga.com – I love the design and creativity they put into their sites. They are aesthetically appealing and user intuitive.
NewYorkCity.com – An amazing job developing the site using user generated content. This really gives the site a “community” feel.
SanFrancisco.com – as well as the other Boulevards sites using this design. So clean and organized yet packed with information a visitor or local resident could use.”
EJS: 4) To date, what are you most proud of in your business?
JB: “The relationship and reputation I have with my clients (250 +). They believe in my product and goals. I have personally met about 95% of them which is sometimes rare in this business. They are really like family!”
EJS: 5) Who has been the most influential person in your career, and what was the best piece of advice that person gave to you?
JB: “I’m picking two – my dad and brother. They have both given me so much advice and encouragement. One thing that sticks out in my mind my dad said, Just do your best and give it a try (referring to the purchase of PigeonForge.com in 2000). Thank goodness, I listened! Blake, my brother and possibly my biggest fan, always challenges me to look at everything from a different perspective. It’s really important in decision making and gaining clarity on issues. My dad did tell me Men are like streetcars – one comes along every 15 minutes. That’s stuck, too.”
***Bonus Questions!!!
EJS: 6) Aside from the camaraderie with like minded people, what other advantages are there to joining Associated Cities?
JB: “Besides hanging with me? Just kidding! Seriously, I am amazed at each member of Associated Cities. All the members are so creative and full of ideas. What I have found most interesting is that everyone has a different business plan with their sites. No one does it the same. All the members are so encouraging and willing to give advice and share their experiences. I am always learning so much!”
EJS: 7) What is a better bijigity moment: acquiring a great domain name, finishing the development of a great domain name or closing a large deal?
JB: “Just the thought of acquiring a new domain and closing the deal makes me bijigity. I love it!! I never really consider a domain finished in terms of development as it’s continuously changing and updating.”
5 With… Jeremy Padawer
One of the most energetic people I’ve met in the domain business, Jeremy Padawer balances his full time job as a Vice President of Entertainment Brand Marketing at the third largest toy company in the United States with his online domain investment business.
Jeremy is serious about his businesses, but he has an excellent way of balancing this with his wit and sense of humor. Frequently, when I have a conversation with him or read a domain forum post written by him, I can’t help but laugh with him. This is a “5 With…” interview that is unlike any I’ve done before. As promised, here is a complete and unedited email chain with Mr. Padawer!
ELLIOT SILVER:
Mr. Padawer,
Greetings!! I’d love to interview you for my blog now if you are still willing. There are 8 questions below, and I ask my participants to answer any 5 of them (or all 8 if they want). If you could provide a brief bio and a picture (if possible/desired) it would be great. You will be the next interview I post I hope.
Here are my questions:
How does your full time job impact your domain investments?
JEREMY PADAWER:
“I am the Vice President of Entertainment Brand Marketing at the 3rd largest toy company in the US. The toy brands that I manage include World Wrestling Entertainment (WWE), Pokemon (Pokemon USA), Neopets (Viacom), Dragonball & Spongebob Squarepants (Viacom).
My job includes:
– Licensing acquisition and new business development
– Sales to mass and secondary account management, analysis, and account management
– Divisional P&L responsibility (Product Margin and Operating Profitability Goals)
– CPG Marketing: Product, Pricing, Packaging & Promotions (Marketing/Advertising)
I’m constantly chasing the next trend, the next innovative item, the next big brand.
Regarding the impact on my style of domaining: I steer clear of any TM concerns as I deeply relate to brand holders. I chase trends. I’m not afraid to make a decision which will result in a moderate loss if it means I went for a home run.
My life is relatively non-stop. It’s almost 3AM in Europe. I am here for the week negotiating with a potential toy partner. I jump on an airplane in the morning to head back to Santa Monica, my home base. The following week I go into the Malibu office on Monday and then jump on another out of country (2-day) trip Tuesday/Wednesday.
And, yet, what am I doing right now? Emailing Elliot J Silver, my domainer colleague.
There is time to sleep and this isn’t the time. Maybe tomorrow.”
ELLIOT SILVER:
What was the best piece of business advice someone ever gave you, and how do you use it in your business?
JEREMY PADAWER:
“The best advice I’ve ever received was from my Evidence Professor in Law School. He told me to not practice law. I ultimately took him up on that. Thank goodness.
I started domaining in 1996. I was 23 and convinced that generic domain names had a significant future. I was living in a $300 relatively run-down apartment building in Knoxville, Tennessee, living on student loans, eating mostly turkey sandwiches. I still hate Karl Budding turkey. 🙂 After finishing undergraduate school at the University of Texas, I jumped directly into a legal education. I bought my first domain names (schmuck.com, uninsured.com, arrange.com, spaniel.com – all now sold) with student loans. I believe the cost was $100/domain at the time.
To make a long story short, I finished law school and went on to also complete an MBA program at Vanderbilt… My destiny was to have $200,000 debt. Because of the domaining world, and my sincere professor’s reminder, I paid for the JD/MBA, a few cars, and a nice down payment on a beach condo in Santa Monica with domain names.
By 2000, I sold all 50-60 generic domains in my moderate portfolio. I joined the circus… er, the toy industry. Same thing… Good decision.
Bad decision = selling all 50-60 generic names.
Good decision = clearing my head entirely and learning how to work, and then thrive and lead, in major organizations.
Bad decision = not jumping back into domaining in 2004, after my head was clear.
Good decision = starting over in September, 2006.
And, that is my clever and cloudy transition to the next question.
BTW – My stream of consciousness writing and probable misspellings are due to the ever advancing clock. It’s now 3:12AM. The car picks me up at 7:00AM. Sweeeeet. Plus, I suck at spelling.”
ELLIOT SILVER:
You are in an elevator at DomainFest and a fellow domain investor asks you why he should invest in the .mobi extension. You have about 30 seconds before you reach the lobby. What is the most compelling reason to invest in the extension?
JEREMY PADAWER:
“For kicks, let’s call the fellow domain investor “Bucko.” Just pulling that out of nowhere.
Bucko might ask, “Hey, Jeremy Padawer, why the heck did you spend a tonnage of cash on mobi domain names during the initial landrush phase? You have 30 seconds to answer me and not one second more!”
I’d reply, “Bucko, that’s not nice. Because you were rude, I will duct tape you to the wall and speak to you about mobi domain names for at least 5 minutes.”
I’d then duct tape Bucko to the wall of the elevator and tell him the following.
I am an opportunist.
I love trends.
I have an understanding of the domain name market. I have insight as to the needs of a brand manager. I travel enough to understand that .com is King, but that there are many princes… including country code domain names outside of the US as well as our friends .net, .org.
Bottom line… Com is King. Com is King. Com is King.
…….BUT……..
A domain name extension positioned in a niche area stands a chance.
…….AND……..
If you believe that promotional marketing people are so clear on the power of .com names, you are fooling yourself. You live in a world of domainers and domaining. A world where not even the biggest, baddest Madison Avenue players are still having a hard time figuring out what to buy and what to avoid.
…….AND……..
The timing is perfect. The domain name extension has been launched prior to the explosive growth of mobile content.
I’d then to go on to concede that mobi solves absolutely NO TECHNOLOGY ISSUES, and that mobi may never be adopted.
I’m just throwing my money on my gut. I smell something here. I believe the world has adopted many successful extensions… that this .mobi extension is well positioned to promotional marketers who may or may not understand the power of .com domain names… that the timing is great… and that there will be a massive explosion, an echo boom of investment into mobile.
So, will .mobi succeed – enjoy consumer adoption? Maybe.
Will .mobi replace .com? No
Will .mobi become a nice alternative (much like .org or a cctld)? My gut says yes.
I’d then say one more thing to my friend duct taped to the wall.
I could be wrong.
I could be absolutely wrong.
I’ve found the last 15 months enjoyable. The traffic is increasing. I’ve sold names and despite my 6-figure investment, I’m sitting on 94% inventory at a financial breakeven.
I hope I’m wrong 10 more times, if being wrong pays this well.
Regarding the duct tape. I’d remove it without harming anyone.
And, Bucko, I love ya man.”
ELLIOT SILVER:
When you buy a domain name for investment purposes, what are the most important aspects of that name that are of interest to you?
JEREMY PADAWER:
“Over the last 6 months, I’ve built up a nice portfolio of geo names (memphis.org, scottsdale.org, rye.com, abilene.org, tempe.org, and others…) I’m not necessarily interested in whether a domain name will achieve a 10X ROI. I still hold out that there is room for branding. Although, this year I am achieving about a 7X ROI against my investment all-in.
I am a big believer of self-branding. I picked up www.jeremy.com three years ago after chasing the previous owner for 7 years. Best investment ever. Nobody forgets my personal email.”
ELLIOT SILVER:
When developing .mobi domain names, what are the most important things people need to include to make them relevant?
JEREMY PADAWER:
“I have no idea, Elliot. It’s 3:49AM. Are you nuts asking me a question like this in the middle of the night?”
ELLIOT SILVER:
You are in the final round of Wheel of Fortune. The category is “Thing” and Pat Sajak gives you the letters RSTLNE, and you ask for the letters DMP and O. As the clock ticks down, you holler out “Domain Names,” winning the $100,000 grand prize! Do you spend the cash on a hot new car, or do you buy a domain name? Which car or which domain name would you choose?
JEREMY PADAWER:
“Hmmm… If I had to choose between a car and a domain name, I’d probably find a good name. Cars are depreciation monsters. No thought on a particular name or extension. If I could do anything with the money, I’d just dump it into an investment account and forget about it.”
ELLIOT SILVER:
What has been the biggest surprise/development in the domain industry over the last couple of years?
JEREMY PADAWER:
“Maybe the rebirth of .tv. I’ve been very impressed with the repackaging of that brand.”
ELLIOT SILVER:
What personal accomplishment are you most proud of in the domain business?
JEREMY PADAWER:
“I’m proud of jumping in early… and, then… jumping in late – having some success both times.”
5 With… Brett Lewis, Partner, Lewis & Hand
Good attorneys that specialize in domain law are difficult to find because they are always busy! I first heard of Brett Lewis while reading an article in DN Journal about a year ago. In the article, Brett provided tips to domain owners to help proactively protect their domain assets. I followed up with Brett to discuss some of his tips, and since that time, Brett has advised me on a few domain-related matters. There are several well respected domain law specialists, and I consider Brett one of the most knowledgeable.
Brett Lewis is a partner in the firm of Lewis & Hand, LLP. Lewis & Hand is experienced in representing clients in claims brought under the Anti-Cybersquatting Consumer Protection Act (ACPA). We also act as a legal advisor and consultant to clients throughout the world in disputes handled under ICANN’s (the Internet Corporation for Assigned Names and Numbers) Uniform Domain Name Dispute Resolution Policy (“UDRP”) and facilitate domain name transactions. Mr. Lewis also advises clients in issues involving various types of Internet and licensing agreements, and trademark and copyright infringement.
Mr. Lewis previously worked as Associate General Counsel for Register.com, one of the largest domain name registrars in the world. At Register.com, Mr. Lewis, resolved numerous domain name disputes, shut down websites of trademark and copyright infringers, as well as scam sites and so-called “phishing” sites, and successfully litigated a variety of legal issues.
Mr. Lewis began his career working for the highly regarded law firm Winthrop, Stimson, Putnam & Roberts, now known as . There, he practiced intellectual property, licensing, Internet and domain name-related law. Prior to working at Winthrop Stimson, Mr. Lewis served as a law clerk to the Hon. David G. Trager in the United States District Court for the Eastern District of New York. Mr. Lewis graduated from Brooklyn Law School, magna cum laude, in 1998 and was a published member of the Brooklyn Law Review. He is admitted to practice law in New York State and in the Southern and Eastern Districts.
1) EJS: How did you become involved in domain name law, and what is it about this field that is of interest to you?
BL: “One does not choose to be a domain name lawyer. It chooses you.
Seriously? I was in the right place at the right time. The Internet was booming just as I graduated law school. I went to a big law firm and no one knew anything about Internet law. I started working for a partner in the firm’s IP group and the rest is history.
What is it about the field that interests me? Every case is like a puzzle. A lot of detective work goes into building or defending a case, and it is fun to find those pieces and put them together. It is also very satisfying to represent people who have been unjustly burdened by a demand letter or a UDRP Complaint.”
EJS: In your opinion, what are the biggest legal threats faced by domain investors, and what can they proactively do to help protect their interests?
BL: “Because of the possibility of statutory damages, the biggest legal threat is being sued in Court, although the threat of losing a valuable domain name through the UDRP process is right up there.
For dictionary word domain names, there is a common misperception that they cannot be the subject of trademark protection. This simply is not true. Many dictionary words are also used as trademarks. That, alone, does not, however, give the trademark holder monopolistic rights to the word or phrase, but it may give them the exclusive right to use it in a particular field. Domain investors need to be wary not to use domain names in a similar manner to registered marks, or allow links to competing content to be posted on their Web sites. Consider the domain name apple.info. It redirects to www.apple.com, but let’s say that it was registered to a third party. If that third party used the domain name to provide information on Upstate New York apple orchards, that would likely be a legitimate use of the domain name. If, however, that party used it to post links to MP3 devices and video cell phones, there very likely would be a problem. There is an article on in the legal issues section of DN Journal for anyone interested that lists more guidelines to follow.”
3) EJS: Assuming most domain investors don’t have time to read all UDRP decisions, what key decisions should they read and know?
BL: “I realize that there are disciples of UDRP decisions. As a general matter, I would warn against ascribing too much significance to any one decision. Unlike court cases, UDRP decisions have no precedential value. In other words, every dispute can be decided independently on its own facts. I could probably find a UDRP decision to stand for any proposition that I wanted to prove or disprove. It becomes much more significant which panelists one has than what decisions are out there. Panelists tend to be relatively consistent with their prior rulings, and both parties in a three-member panel dispute have some say in who the panelists will be. There are many excellent panelists.”
4) EJS: What have you learned from UDRP cases where you weren’t victorious?
BL: “That legally being in the right is not always enough. The first time that a panel ruled against my client, he was a great guy and totally legitimate. We were hit with an unprincipled decision that ignored what should have been binding trademark law. The panel went with its gut. UDRP cases are usually decided at a gut level. The panelists are not paid enough to justify spending very long on deciding disputes, so there is a tendency to rule based on feeling and write the decision that backs it out. It’s really a very human thing to do, although in many cases, substituting instinct and a subjective sense of equity can result in inequitable results. I had another case where the other side basically overwhelmed the panelist with information. Given the nature of UDRP proceedings, we did not have an opportunity to prove that the Respondent in that case had gotten our facts wrong.”
5) EJS: If you were in charge, how would you change the UDRP system to be as fair as possible to domain investors as well as trademark holders?
BL: “First, there is no uniformity to UDRP decisions. The Policy gives broad examples of what types of conduct constitute bad faith, but the examples do not apply to many of the issues litigated today. Those are left up to the panels to decide on a case-by-case basis. As a result, there are inconsistent decisions and not enough guidance to domain holders as to what is and is not permissible conduct. Without clear precedent or rules governing conduct, there is uncertainty and turmoil. I would advocate for a system that provided greater predictability, either by amending the definitions of what is and is not acceptable practice, to bring the rules in line with current trends, or implement a discretionary appeals body to review a handful of cases and set Binding rules that other panelists would have to follow. To me, transparency and predictability equate to fairness.
I would also amend the rules to impose a monetary sanction against parties guilty of reverse domain name hijacking. There should be more at stake for trademark holders to discourage them from filing overreaching claims. If, instead of a meaningless sanction, a reverse domain name hijacker was required to pay the respondent’s attorney’s fees and filing fees, I believe that it would discourage some of the more egregious claims from being filed.”
5 With… Rick Schwartz, CEO, T.R.A.F.F.I.C.
Rick Schwartz is a visionary in the domain investment business. From the mid-90’s when he was registering premium generic domain names to more recently with speculative .mobi names, Rick has been at the forefront of the domain industry, taking risks that almost always seem to pay off. In an industry where many of the top professionals remain secretive (less so now than before), Rick has been one of the few people willing to speak out. Because of his outspoken nature, Rick is a frequent target of naysayers, but he continues to dedicate countless hours to advance the domain industry.
Rick Schwartz, aka “Domain King” and “Webfather”, is the CEO, President and Cofounder of T.R.A.F.F.I.C., the premiere domain conference for the domain industry. It is both the oldest and largest and attracts over 500 of the top professionals in the industry in a by invitation only event. With 9 shows in just 3 years TRAFFIC has established itself as the epicenter of the entire domain industry. It has attracted speakers from Ben Stein to Steve Forbes.
As one of the early domain pioneers dating back to 1995, Rick has a knack for predicting big trends and getting it right. He may have been the first to recognize the value of “Type in” traffic which is now commonly referred to as “Direct navigation” – the most potent and targeted traffic on the net. Rick has a prime portfolio of one and two word domains, and is considered by many to be among the leading experts on domain names, traffic, website flow and valuation.
Besides eRealEstate.com and domains like Candy.com, Property.com, Properties.com, Tradeshows.com, Widgets.com and some 5000 others, Rick is also a founding member and sits on the board of the ICA. (Internet Commerce Association) a non -profit organization which is actively looking after and protecting the rights of domain owners..
Rick sold Men.com for $1.3 million in cash deal that was finalized in May 2004, a domain name that he bought for $15,000 in 1997. Many attribute that sale to jump starting the domain space at a time considered the lowest point the domain business has seen. It also cemented his main theory that “Domains would go up faster in value than any commodity or asset ever known to mankind.” Laughed at in 1995 and 1996 it is FACT today. No stock, no land, no gold, no jewel has ever gone up faster and further in value.
1.) EJS: Development seems to be one of the “hot topics” at recent TRAFFIC conferences, and you’ve indicated that you will be developing some of your domain names. What names in your portfolio are at the top of the line for development, and what type of development options are you considering?
RS: “I think Property.com, Candy.com and Widgets.com are the ones that are ripest for development. I have been in discussions with companies on two of these domains. However nothing concrete at this point. Like most things, it all is about the timing. iReport.com is also high on my list. I have experimented with other development. RumorMill.com for one. But development does not automatically mean more revenue. RumorMill.com will likely morph into another type site and be a PPC page during the transition. What most people don’t realize is I had developed sites in 1996 and 1997 when I still had my real world businesses. I have also developed sites that just stay in orbit and I even forget I have them.. eRealestate.com was one of my early sites and I have left much of that largely as a time capsule with only some obvious updates. But most of what was written there came from 1996-1999. I have about 10 other developed sites that I don’t talk much about. As the net matures, matching a great domain name with a profitable formula for development will become easier
Which is why parking pages are so popular. You may collect a little less but you tied up zero time and that alone has value. So every time you discuss development, it circles back to 100% automation. Parking = 0 minutes per month. Development = much more time per month. Eventually there will be some other options as businesses realize just how potent type in traffic is. No matter how you cut it and how well folks think they are doing the fact is the traffic domains produce is worth 10x the current payout rate and sometimes much much more. When the true value of traffic is fully exploited then you will see payouts explode. 2 cent visitors will be worth $20 or $200 or more. What kind of an increase is that? What does that do to the price of domain names with targeted type in traffic? And as parking pages get more sophisticated they will begin to capture data and email addresses and do mail outs and do other things to aid in developing databases of buyers. So development may not be what we expect it to be and it sure as hell is not easy to develop AND be profitable. But like solving the Rubix Cube….we keep trying.. And when folks laugh at those payouts above, they will just show their lack of vision. If I have somebody looking for a $1 million property and I hand delver them to the agent that could make a $60,000 commission, you going to tell me that is worth 2 CENTS?? 2 DOLLARS. $200?? BS! I would rather sell him a 25 cent piece of candy for that 2 cents or just give the visitor to charity. But when the DAY comes that the Realtor says you can make me $60k and I can pay you THOUSANDS for that lead….THEN you will see what a visitor is REALLY worth.. And if a domain can produce just 10 of those people a year, what is the value of that domain? We will laugh when we look back at this period of pennies. Wait until they actually figure it out. How can I be so sure? 2+2 =4. Just because we are in a time in which they have not figured out that 2+2 =4 does not mean WE have to change anything. 2=2 IS 4 and when they figure it out our job is to just be there waiting and the key ingredient is patience. So overpaying for a domain today is still a HUGE bargain when you look down the road and see what I believe will unfold.”
2.) EJS: You paid a record sum of $200,000 for Flowers.mobi, yet the website isn’t mobile-compatible. What are your plans for that domain name?
“Like other investments including dotcom, you have to overpay today to have a bargain tomorrow. I repeat that often because that is one of the foundations of my approach to business. While others are so focused on a bargain, they miss the prize.
.mobi is not relevant today so no need to waste time, money and energy developing. I think .mobi is a play for 3-5 years down the road. It will either hit big or won’t hit at all. That is what speculation is all about. Those that laugh at .mobi remind me of the folks that called me a fool when I bought domains in 1996 and 1997 and paid $100 to register each one. Nobody can definitely predict the future. But you take a calculated risk that may or may not payoff. It’s a risk. You don’t like risk, then put your $$$ in a savings account and make 5%. No risk, but you will watch your buying power shrink away. Some risks pay off. Some don’t. You always have to be prepared to lose your investment if you expect a big payday sometime down the road. It’s about diversification as well. .mobi is a spin of the roulette wheel. Nothing more, nothing less. I have had damn good luck at roulette. If you come to Las Vegas TRAFFIC I’ll show you how you “Hit them hard and hit them fast” and walk away a winner more often than not. I would just rather gamble on domains than roulette.”
3.) EJS: The Dallas Cowboys own DallasCowboys.com, and were nearly the owners of Cowboys.com for a price of $275,000 after the TRAFFIC live auction. The name eventually sold for over $370,000 in the silent auction. What made this name more enticing to purchase during the silent auction than during the live auction when only a single bid was placed?
RS: “I think domainers were apprehensive of the Dallas football team coming after them. There is a history of corporate lawyers that target domain owners and try and reverse hijack generic domain names whether they have any true right to them or not. When the team willingly backed out of their contact at the auction it left the door wide open for that not to happen. Further, the Dallas Cowboys came out so publicly that they were the :DALLAS Cowboys and not the “Cowboys” that gave domainers the confidence to obtain the domain and complete the transaction without fear of repercussions. I don’t speak for the group. They may each have their own takes. This is just how I saw it. Should they ever decide to come after us, I think it would be the perfect case for the public to see. We could even lose the domain when you consider the inconsistency of past rulings. However someone else would lose much more. America’s team would risk that title. Cowboys.com is a generic name. We can keep it an apparel site. We can morph it into a dating site. We can sell saddles if we want. Yes, there would be ways to sell things related to the Dallas Cowboys football team. Probably in excess of 7 or 8 figures a year. But the way the Internet is set up, it does not follow real world rules. So opportunities like that can not be realized without a formal licensing agreement. Being #1 is a great thing. There are only 2 things that can keep you #1. Winning and more sales. We can’t help the Dallas Cowboys win more games, but we sure as hell could add more sales to things they might sell in their stores.
Again, I am speaking from my own personal thoughts and this is not related to the official positions of Cowboys.com LLC in which I am just 1 of 18 or 20.”
4.) EJS: You take a lot of heat from other people in the domain space for nearly every public action you do. What motivates you to continue to be a public figure in the domain business, when you could easily sell out, retire and live a relaxed and quiet life?
RS: “You can’t please everybody. I feel like Joe Torre sometimes. You have one victory after another, year after year and they still want to throw your ass out to the curb. It’s just a human nature thing. So you just do what you think is right and make the best decisions you can by conferring with a large cross section of people and companies and listen to what they say and try and find the direction that moves us all forward.
The best way to take the heat and dispel the nonsense you hear on the boards is having a great success followed by a great success followed by other great successes. At some point when you have a long string of successes over several decades dating back to the 70’s, you can no longer just point to luck. Luck sure helps but it just might also be by design. It just might be having a different formula and vision. It just might be marching to the beat of a different drummer. It just might be that you are so devoted and so dedicated that failure is not an option even though I have no fear of failure. Failure is just a clue in having a great success. (My entire last blog was about failure)
I love this industry. The potential is stronger than anything I have seen in my lifetime. It needs to be exploited and publicized because keeping the industry a secret helps only a few. I have a mission. In a few years I will ride into the sunset knowing I had a major impact in lives of many. That’s a pretty cool feeling. It’s all on record and I will let history and fair minded people sort it all out. We are on an historical mission. It will be written about in history books as we were taught about the gold rush and other epic events. We will all be dead when that happens, but it does not diminish the reality and our place in history.”
5.) EJS: If for some crazy reason some world Internet body ruled that each person was only permitted to own one domain name and you were forced to sell all but one, which would you keep, what would you do with it, and why did you choose that one?
RS: “It is possible extreme actions like this that should have every domain owner supporting the ICA. Believe me, many would like to do exactly that. The ones that blew it and missed the greatest opportunity in their lifetimes will spend YEARS figuring out ways to get our assets. It is cheaper to chip away at our rights with tiny and hidden legislation than to actually pay fair market value of our assets I am going to fight them so I never am forced to answer that question. It will take every domain owner fighting those organizations and lobbyists that will try and re-write law and capitalism in an effort to take title to what we discovered and own. What we took great risks in obtaining. Then we need to publicize exactly which companies are engaged in this type activity and expose them. Some companies may actually be in our space.”
***Bonus Questions!!
6.) EJS: Have you ever regretted selling (or buying) a domain name? If so, which and why?
RS: “Never regretted buying a domain name, but it is hard to part with any. Guess that is why I have only sold about 6 even though I get thousands of offers annually. There will always be an invisible link that is hard to explain once a domain has been in your possession. I think you follow it like a teacher would follow the career of a student. You know you played some small part in their evolution and destiny.”
7.) EJS: The domain business can be a 24/7 operation and can certainly take a toll on your health, family life and social life among other things. How do you escape from the domain world to relax, recover and re-energize?
RS: “First of all it is a hobby and it is fun and I love the daily challenge as well as seeing the future from the front row. So it is hard to escape something you love and look forward to every day when you wake up. I just basically do it in different places at different times and that way my life comes first without forsaking the business or family. So the freedom to be writing this on a 3lb Sony with a wireless connection from wherever I happen to be allows me to re-energize on a continuous basis. Then God created the iPhone and it brought it all together. Now I understand why there are 60 second traffic lights. You can check your email. Check the news, the board, the stocks. Respond to an email and still have time to tune in channel 7 on Sirius or XM Radio. ”
8.) EJS: You own one of the most valuable private domain portfolios. Would you trade your entire portfolio for anything, and if so what?
RS: “I think we all have our “Number” in which we would sell for. I am not looking to sell, but if somebody gave me my “Number”, I might be on my way.
Can I trade for health? Happiness? A few extra days on earth? In that case I will consider cash. Sure, we all have “Our number” in which if someone wrote the check, we would take a hike. No matter what business you have or what asset you own, we all have that “NUMBER” running around in the back of our minds. But even if we get that “Number”, I doubt I would do things much different. I would always own some of my favorite domain names. I actually may do better focusing on a handful as opposed to many.”