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Life Lesson

9

Domain investing may be a way of life, but life isn’t isn’t about domain investing.

A former marketing partner of mine when I worked at AIG passed away this morning after a short battle with pancreatic cancer. She was a wonderful woman, full of energy, and she left behind young children. This is a tragic part of life.

I spend a lot of time on the computer, doing research and trying to make deals. This is a way for me to make a living for me, but this isn’t life.Life is about spending time with the people you care about. Enjoy every minute you can. Unfortunately, life can be short. Life can be unpredictable, too. Take some extra time to enjoy the little thigs in your life.

I am writing from my Blackberry in the middle of Herald Square in New York City. I lived near here and hated this time of year. Too many tourists, too much commotion, and too many street vendors and cab horns. Right now I am just staring at all of this in awe. People are happily living their lives and enjoying the season. This is the first time I am enjoying Herald Square during the holiday season.

Take a break from doing business. Get away from the computer for a little while. Watch a movie with your loved ones. Live your life to the fullest and enjoy the meaningful things. Life can be short and unpredictable, so make the most of it while you can.

Godaddy: Tell Us How to Improve Signature Auctions

Godaddy Logo Godaddy is asking its customers to provide feedback on how the company can improve its Signature Auctions, after the first round saw pretty poor results. This request is one of the smartest moves I’ve seen from one of the big domain companies. Most companies would probably have tried to put a positive spin on the results, which may have made them look foolish. Because of their humble appeal, I will give some advice that I believe could improve their next Signature Auction.

1.) Better Names at Reasonable Reserves

Godaddy should do what it takes to ensure there are good quality domain names on auction with low/reasonable reserve prices. They should seek out domain owners and cut deals with them to guarantee certain prices will be achieved (lower commissions, sales price guarantees, bid on behalf of Godaddy’s internal portfolio…etc). The better the quality names at reasonable reserves, the more likely it is for buyers to show up and bid. Conversely, the more wealthy buyers that are present, the more likely it is for domain sellers to list their names at reasonable reserve prices.

Sellers are reluctant to put their names on auction at a lower reserve because if there aren’t enough buyers, they’ve created an artificial price ceiling for their domain names. Hypothetically, a $500,000 name with a reserve price of just $100,000 might not sell if an interested buyer doesn’t show up. If that’s the case, the domain owner has created a price ceiling that isn’t realistic because it probably would have sold for $500,000 in a different venue.

2.) More Publicity

In the days leading up to the auction, there didn’t seem to be any publicity for the auction. It was almost like Godaddy wanted to have a soft opening, but when they chose that route, bidders didn’t show up (or if they did, they didn’t bid). Godaddy needs to publicize their next auction as much as possible. I suggest the following:

  • Purchase impressions in all the domain forums and domain blogs
  • Buy related Adwords
  • Email entire database of current customers
  • Ask Bob to blog about the auction to generate buzz
  • Issue press releases touting the high profile domain names
  • Give coupon credits to VIP customers

3.) VIP Invitations

There are quite a few people who are known for bidding aggressively at other live domain auctions. Senior Godaddy executives should go through their rolodexes and do what they need to make sure these bidders show up. Godaddy might even want to ask them what types of names they are looking to purchase, and they should make sure at least some of these types of names are on auction.

4.) Manage the Escrow Process

Instead of handing off the sale to Escrow.com to complete an auction (or any of TDNAM’s sales for that matter), Godaddy should handle the transaction on their own. This is an important part of the process, and it will ensure that payment is made quickly, and the domain name is transferred promptly and correctly. Why should they leave anything to chance?   All other major auction houses offer in-house escrow services, and I don’t see why Godaddy still doesn’t.

————-

The better the auction results are, the more likely it will be that people will want their names listed in future auctions. The better the names in auction, the more likely it will be that buyers show up and bid. The second round will be much more successful than the inaugural attempt because Godaddy was smart enough to ask for advice from the domain community.

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Domain Speculation Pointers

Throughout the past several months, I’ve had many conversations with a fellow domain investor about different speculation strategies focusing on newly registered domain names. He and I frequently share stories of new registrations along with the motivation behind speculating on certain new names.  I want to share a few brief pointers for registering relevant domain names on a speculative basis.  

Travel and geographic-related domain names may be worth speculating on, as their value has climbed and always seem to be in high demand.  Sometimes you can create a relevant domain name by combining a travel destination with a travel-related keyword to form a new name with some value. The key is that the new domain name must make sense, and the keyword should have some click value (be it a large ticket item or an expensive service).

Example:

When I am planning a vacation, there are several things I search for prior to departure:

  1. Hotel
  2. Transportation
  3. Sites
  4. Restaurants
  5. Etc…

To make the most of #3, I frequently search for a tour guide online, in order to visit attractions that will be most interesting to me and my fiance. With that in mind, I believe the terms “tour guide” and/or “tour guides” could add value to a travel destination.  Turns out, CroatiaTourguides.com is available to register.  Whether it has much value, I don’t know, but I like the name for under $10 because there are plenty of  tour guides in Croatia,  and there are many people looking to find them online.

Other types of speculative domain registrations I  occasionally  take a chance on are  relevant health related domain names.  With most health or wellness related issues, there are cures or forms of proactive products.  Oftentimes this is in the form of creams, pills, shots, patches….etc.  Sometimes newly discovered and/or trendy plants and herbs are publicized, causing great demand for their related products.  

Example:  

One way to speculate on this type of domain name is to stay on top of these marketplace trends and buy relevant domain names.  Using the herbs or the health issue, you could add keywords to the end of the domain for potential products that may be developed and marketed.  Recently, I’ve heard quite a bit about fish oil.  I know the pills have become popular, but maybe there will be another application.  Perhaps a cream could be in the works? As of today, FishOilCream.com is available to register.  Maybe this name (and product) stinks, but if it does become popular, it will cost under $10 to secure this name.

The final type of name I would like to discuss are state/local professions and activities. These are my favorite types of speculative purchases because they are less about speculation and more about hunting for unregistered gems.  You can search through the yellow pages or various online directories to see if a particular profession exists in a specific area, and if it does, there is probably at least a small amount of demand, and certainly the ability to add content.  This topic is something that  Frank Schilling  discussed a while ago, and it’s something I like.  Personally, I own WashingtonDoctors.com, NewJerseyDoctor.com, and VirginiaMortgages.com among others I bought in the aftermarket, and I am a big fan of this type of name.

Example:

One way to become inspired is to search through your local phone directory to see what professions exist where domain names don’t.  Let’s say you live down in Palm Beach, Florida.  When I was down there last, I noticed nearly every home had a swimming pool.  These seem to be high value commodities, so presumably there are people who would pay quite a bit for a lead.  PalmBeachSwimmingPools.com is available to register.”Relevant” is the most frequently used descriptive term in this post.  In order to make a wise speculative purchase, the domain name must be relevant.  You probably wouldn’t find much value in registering FloridaMountainClimbing.com for example.  If you stick with relevant domain names, you may come across something of value.  

You should stay away from registering names that contain the trademark of another company. I would advise that you do a search of the  USPTO database  before registering a potential trademark infringing domain name.  

Again, please keep in mind this is purely SPECULATION!  Just like investing in the stock market, I would only advise a small amount of domain names in your portfolio be of the speculative nature – although some might argue that most domain names are speculative if they aren’t developed.  Owning too many speculative names may be cost prohibitive and wouldn’t be something I would advocate.  

Making Purchases Online

Beat the mobs on ‘Cyber Monday’

According to the article and a study from the National Retail Federation, nearly 75% of online retailers will offer special promotions on “Cyber Monday,” which falls on the Monday after Thanksgiving (tomorrow). Up until last year, I had never heard about Cyber Monday, but apparently this is one of the biggest online shopping days of the year.

CyberMonday.com, a website powered by Shop.org and owned by the National Retail Federation, offers links to many retailers who have “Cyber Monday” deals.  

CNN.com  offers some good online shopping tips to help save money and ensure a safe shopping experience.  As with all shopping, people should use their best discretion, and they should use common sense when making purchases online.  

Art of Pricing a Domain Name

Yesterday, I blogged about the “Art of Selling a Domain Name,” and I want to take a step back a bit and discuss an important step in the process: Pricing. If you price your name too high, it won’t sell, and it will set a price ceiling for the name. If you price it too generously, you won’t achieve as high of a return as possible. There is an art to pricing a domain name, and I would like to share my own personal process for pricing my domain names when I sell.

For the sake of this blog post, I will use my domain name AlcoholCounseling.com as an example, and I will set a sales price for the name at the conclusion of this.

When I decide to sell a domain name from my portfolio, I look at a variety of factors in order to determine the price, including:

1) Traffic the name receives
2) Revenue the name receives
3) Google listings for the “bracketed term”
4) Advertisers on Google
5) Comps of recent sales
6) Gut feel
   

Although I don’t buy my names based on traffic or revenue, I know that many of my clients pay close attention to these figures. The amount of natural traffic a domain name receives is important because it shows how many people are looking for something on that domain name without having to incur advertise costs. I also use the Overture search tool to get an idea of how many people are searching for the phrase or keyword of the domain name I am selling. For AlcoholCounseling.com, the traffic is light, only receiving about 1/2 a unique per day.

The revenue is important because a name might receive very little traffic, but the revenue per click may be very strong. Conversely, a domain name might receive a ton of traffic, but the click through rate might be low and the revenue per click might be low as well. This is important because if a name has strong revenue, a developer can build compelling content, increasing search engine traffic, and dramatically the revenue produced by the name. For AlcoholCounseling.com, the CTR is about 25% and the revenue per click is around $1.50. It is important to keep in mind that revenue share and CTR will differ for each parking provider and can be very different. This is one reason I only use this as a guideline.

I use the number of Google listings for the word or term in my domain name as an indicator of how much information is being published about the topic. It is likely that there is a parallel between the amount of information available and the number of people looking to find information. In the case of “alcohol counseling,” there are 154,000 Google searches for the topic. It is important to put the term in brackets, otherwise the results will include all pages that use alcohol or counseling, which is deceptive.

The number of advertisers who are paying per click is also a good indicator of the importance of a keyword or phrase, and thus the value of it. The more advertisers, the more competitive the bidding is, and that may mean a higher revenue per click figure. In the case of “alcohol counseling,” there are 8 sidebar advertisers, and there are 2 top advertisers, which is very strong in my opinion.

In order to get comparisons of other sales (both recent and historical), I like to use DNJournal’s Domain Sales chart or DNSalePrice.com. I also reference personal sales and other sales that might not have been published. For AlcoholCounseling.com, I would compare it to other psychology, rehabilitation and counseling domain sales. I have been fortunate enough to have sold a few similar names, so I have a good internal base. There have also been several public sales ranging from $3,500 – $10,000, which is in line with names I’ve sold.

Just like a real estate broker, I spend countless hours analyzing the domain market. This has given me a good “gut feel” for certain domain names. I also take my clients’ needs into account. I think about their verticals, their needs, and the types of names they buy as well as the price they would consider for this name.

In the case of AlcoholCounseling.com, I will set a price of $5,800 for the domain name with the hopes of a quick sale. Of course, if you are interested in acquiring the name, drop me a note or post a comment.

***Updated***

I just want to add that these are the most important factors I consider when setting my prices. There are plenty of other considerations, including: whether the other extensions are owned and used, registration date of the name, prior sale price/listing of the name, amount of inquiries the name has received in the past….etc.

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