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Demand for gTLDs Appears Strong

Elliot Silver
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9

While the data can be skewed because there is no cost to reserve a gTLD domian name using Pool.com and Quintaris’ system   to reserve gTLD domain names before their registries are even created, the companies are indicating that the market for gTLDs is strong. According to the companies, 10,000 gTLD domain names were reserved every day during the first month in operation.

An interesting observation that was noted is “Early results show a stronger market for generic-named registries, like .sport than for those being pursued by a specific city or region. Farrow noted that “no city gTLD has cracked the top ten on the pre-order list.” This doesn’t necessarily mean there isn’t a market for geo names in extensions like .nyc, but it shows that generic categories like .sport or .sucks are popular.

If you have any interest in reserving a gTLD, I think this is the place to do it. There’s no risk – although there’s no guarantee either. I haven’t reserved any gTLD domain names yet, but I might – just in case.

Government Bailout of Newspapers is BS

Elliot Silver
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75

I really enjoyed the Fool.com’s article that is critical of the potential government bailout of newspapers. Because of my geodomain holdings, I’ve been keeping tabs on the state of the newspaper industry by reading as much as I can, and the article really sums up my feelings on any type of government assistance to newspaper companies.

In my opinion (and many others), the newspaper printing and delivery model for news consumption DEAD, and the companies need to reorganize and change their strategies, without help from the government. Media and news delivery isn’t dead – just the way newspaper media companies deliver the news via print. By the time the “news” is printed, it’s old news that nobody wants to read unless they are stuck on a train or in a waiting room somewhere and their Ipod, Blackberry, or other device doesn’t have reception. (**Edit** or don’t have modern devices.)

Entrepreneurial journalists such as Ron Jackson and Andrew Allemann (in the domain industry) are proving that the interactive model of news delivery is where it’s at, and if you look around their site (and mine, too), you will see that advertisers are still paying for placement, showing that there is a way to make money online, as papers like the NY Times hasn’t figured out. I suppose when you have HUGE overhead expenses, it can be difficult to make it viable, but that’s their problem, not our government’s problem (and my problem since I pay lots of taxes).

People aren’t sacrificing knowledge simply because they don’t receive a print edition of a newspaper – they are getting the news from many sources online, instantly – as the news actually unfolds, and they don’t need the NY Times or another newspaper to tell them about breaking news.

Just because a particular business model is outdated does not justify the government’s involvement in a handout. There are plenty of ways to make money in the journalism space, and the newspaper companies are either not smart enough to figure it out, or they have too much overhead to make it work, or maybe there is a reason I missed. With any of these options, I don’t see how a bailout is going to help in the long run, other than giving people working in obsolete jobs a few months of pay before the government handout is gone.

I am very sorry for all the people who are responsible for printing the papers, delivering the papers, monitoring the staff of printers…etc. Unfortunately for them, their business model is no longer viable. I would be significantly annoyed that the government might try and help my competitors who are using a business model that doesn’t work any longer.

Make As Much Money As You Want

Elliot Silver
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6

When I first started investing in domain names, I had very modest goals. I was in graduate school, and I primarily used the money I earned to buy dinners and drinks. I didn’t really set many financial goals, because there wasn’t any point to it. I registered new domain names for around $8/each and I quickly sold them for anywhere from $15 – $100/each.

On occasion, I found buyers who wanted to buy a large number of domain names, so instead of selling each name for $35, I would sell 10 at a time for $25/each. The profit on that type of deal would be somewhere in the ballpark of $170. I started doing those bulk deals more frequently, and I figured if I could do one of those deals a week, I could make $10,000.

For many people, I would imagine making $10,000 a year with domain investments is a lofty goal – it was for me when I started, and I am sure it’s the same these days. However, if you break it down into smaller, more surmountable chunks – say $200/week, it makes achieving your goals more realistic.

As I started to get more serious about domain investing, I set goals for myself and tried to figure out the best ways to achieve those goals. As the goals become more lofty, I began to buy higher value domain names, which I could sell for lower profit margins, but much more money. Instead of selling an $8 new registration at a 300% mark-up, I could sell a $1,000 domain name for $1,500. The profit margin shrunk from 300% to 50%, but the profit grew pretty rapidly.

Set goals for yourself and try to beat them. Continue to raise the bar and look at new ways to generate revenue. Don’t cut corners and do shady things. You might make some more money in the short run, but it could be very damaging to your reputation and business in the long run.

If you look at the big year-end number, you could become overwhelmed. As they say in baseball, you don’t need to hit a home run to make big things happen. Do what you can to slowly chip away at that big goal, and eventually you will hit your number.

Using Whois To Detect Fraud & Counterfeit

Elliot Silver
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1

Last month, a friend of mine emailed me a link to a website proporting to sell Christian Louboutin shoes. She wanted to know if there was a way to tell if the site was fraudulent since it looked a bit fishy, and the prices were almost too good to be true. The website did look pretty poorly constructed, but there are plenty of places that sell close-outs, so that wasn’t 100% convincing.

I did a Whois check on the name, and lo and behold, the domain name was registered a couple of weeks prior. A new domain registration, coupled with all of these other signals led me to believe it was a site selling counterfeit products.

If you are ever in doubt about whether a website is legit, check the Whois. You can see who owns and operates the website (if it’s not private), and you can see how long it’s been operating. If you use the DomainTools Whois tool, you can also see historic thumbnails as well. Since many large brands monitor their presence on the Internet, fraudulent websites are generally shut down quickly.

Make a Good Offer

Elliot Silver
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0

A lot of domain owners have received offers on their premium domain names. Strike that. ALL owners of premium domain names have received offers on their domain names before. It’s virtually impossible to be the first offer someone’s received if they own a great domain name. To get there attention, your email needs to stand out from everyone else’s solicitation.

As a domain buyer, your job is to make an offer that is compelling enough for them to respond. If you insult someone with a lowball offer, they will delete it. Even if you think your offer is a “good” introductory offer, step into their shoes for a minute and imagine you’ve owned that domain name for 10 years and received countless emails. How would you respond to the email? If you aren’t impressed, they won’t be either, and they probably will delete it.

If you ask the domain owner if the name is for sale without naming a price, they will probably delete it, too. They’ve owned the name for a long time for a reason, and that’s because they haven’t received a compelling enough offer to sell it.

The best way to get a conversation going with a domain owner is to make a good opening offer. At the very least, you will usually get a response, and at the best, the domain owner will accept your offer. I enjoy negotiations to a point, but I generally make a strong offer at the outset. Maybe I can go higher, but maybe I can’t. However, it’s generally good enough to get a response.

I’ve also found it helpful to include my phone number in my email correspondence. People want to know they are dealing with other real people, and if they can give you a call to talk, they will generally feel more comfortable. This has helped seal the deal on a couple of acquisitions in the last few weeks.

People are willing to sell their domain names, but you need to give them a reason. For many it’s financial, and you can’t negotiate with someone who immediately deletes your email upon opening it.

No More Easy Money

Elliot Silver
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10

One problem I think many of us have is that we sometimes view our domain investments as a means to make a lot of money quickly. I know a number of people who got started in the industry after reading articles about people like Rick Schwartz making a lot of money with virtual assets, and they want to follow suit because it looks like a great lifestyle filled with “easy money.”

I must admit that the domain investor “lifestyle” I live is great, but it’s not exactly the stereotypical one that people probably think about. I work 12-16 hour days developing, researching, and negotiating, and I work every day. I enjoy what I do, and I set my own hours, so it’s worked out well. If I want to take a day off, I have the ability to do that. There are very few people in the industry who sit back and relax all day while drinking cocktails on the beach at night, although that stereotype does sound relaxing.

All of this said, I want to give a bit of a warning to people who may be new to the industry. Just because you see a specific type of name selling for a lot of money (and growing in value), it doesn’t mean that all similar names are worth the same amount of money. Simply because some people are investing isn’t a good enough reason for you to buy as well unless you know why the name is increasing in value and believe the rationale is correct.

Over the past year, prices in a number of verticals within our industry have dropped considerably, while premium domain names have kept their value. The reason is that many verticals (like 3 and 4 letter domain names) were perceived as being much more valuable than other domain names, and domain investors who were doing most of the buying couldn’t sustain the growth. Eventually, there were many more sellers than buyers, and the prices dropped, tremendously in some cases.

I am not going to preach and tell you what types of names are best to buy and what types of names aren’t. It really isn’t as easy as that. I will say that you should do your due diligence when you buy, and if you are looking to make fast money, you are in the industry at the wrong time. Just about everyone I know is working hard, and there is no such thing as easy money.

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