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Adapting to the Changing Internet Landscape

Elliot Silver
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Back from a short trip to the beach. I’ve been reading quite a bit on the new vanity TLDs, and the best conclusion I can come to is that nobody really knows for certain how things will play out. Neither the people who are vociferously stating that .com will always be king (myself included), nor those who are saying that new extensions will cause major sweeping changes to the Internet, really know for sure whether their opinions will be accurate.
What is for sure is that some people will take a big financial risk with these new extensions and some people will remain on the sidelines. In five years, there will be some obvious winners and there will be some obvious losers, but the answers will not be seen over night. I am eagerly observing from the sidelines for now, observing what my friends are doing, getting ready to make changes to my business model if they are necessary. Change is essential to growth, and being able to adapt to industry changes is fundamental.
The domain industry has changed quite a bit, even in the five years that I’ve been involved in the industry. The one constant thing is that the people who are able to adapt to the changes and work within the new parameters are those who are successful. While my thinking about .com may be inaccurate, I (and others) will still manage to do well if we are able to notice changes quickly, and are able to adapt to these changes rapidly. Just because I didn’t buy my first domain names in 1995 doesn’t mean that I wasn’t able to be successful. I found the industry later than many, but I learned as much as I could, took some risks and the rest is history.
It is great to see all the dialog about the new extensions on domain forums, blogs, and other news outlets. We are at a time of major change in the domain industry and in the history of the Internet. If you are reading this blog and other domain resources, it is likely that you realize how important this time is for all of us. Pay attention to the things going on in the industry, watch the industry veterans and media companies to learn about their plans, and invest wisely. You don’t have to be a trendsetter to make money, but you have to be able to adapt to the changes to avoid becoming obsolete.

Development Quick Tip – Revenue from Ad Sales

Elliot Silver
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On the mini sites I’ve either created, am currently creating, or plan to create, Adsense is the most visible revenue generating tactic. People find my “mini” websites through various means (mostly search engines), and they click on the Google advertisements to find more information, generating revenue for me. While this is great, it will certainly take quite some time to make a decent amount of money this way.
As most developers would agree, the real revenue generation from a developed website comes from direct to advertiser ad sales. Selling advertising space takes a bit more time than just putting up your Adsense code, but that’s where the money is. When building a website, you might consider tailoring parts of it to meet the needs of potential advertisers and give more opportunity for advertising.
A quick example would be with TropicalBirds.com. I created a page to advertise bird breeders from around the country. Since the site was just launched and traffic is minimal, I decided to offer free listings by state in exchange for a reciprocal link to TropicalBirds.com on their sites. This should help boost the ranking of my site and also provide a service to visitors looking for bird breeders. I sent the following email that was individually to bird breeders I found online:

“I recently launched TropicalBirds.com, a website with information about many species of tropical birds, including parrots, macaws, conures, cuckoos, cockatiels, and many other types of birds – both domesticated and wild. In addition to discussing the proper care of pet birds featured on the site, I am also going to build a small directory of breeders. I would like to include you on the site in exchange for a link to TropicalBirds.com on your site.
If you would like a free listing and will link back to TropicalBirds.com, please send me the following information:
1) Business Name
2) Business Location (city, state)
3) Website Address
4) Types of Tropical Birds Bred
5) One sentence about your company
6) Location of link to TropicalBirds.com on your site
If you are interested, please send me the requested information as soon as you have a chance. We are still building TropicalBirds.com, and not all of our links are working yet. We anticipate a full launch by the end of this month. This is the main directory page: http://www.tropicalbirds.com/tropical-bird-breeders.html”

In addition to receiving several positive responses, I also received a request for a featured listing, which the breeder will pay $xx annually for each category. She breeds several types of birds, and she would like a breeder list by breed in addition to a list by state. I didn’t even have to solicit upgrades, yet I can make $xxx/year from this one person if I create a breed by breed listing. The cost of building this is very minimal, as it will probably take just an hour of my time to do. Once done, I can also seek out other advertisers who may wish for the same type of listing, potentially netting me $x,xxx/year, making break-even less than a few years away including acquisition and development expenses.
Point of this is to let you know that you shouldn’t have to be reliant on Adsense or affiliate advertising to make money. There are plenty of old-school businesses out there who would just as soon have a relationship with a small business than one with a big search company. If you give someone a reason to pay to upgrade, chances are good that someone will take it.

Public Service Announcement

Elliot Silver
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Most people I’ve met through my blog balance their domain investments with a full time job. I was in the same position when I worked at AIG for two and a half years. I would work from 9-6, come home for dinner, and get to work on the computer managing my domain business. While this may be the way to be most productive with essentially two jobs, it isn’t the best thing for your health.
A little over a year and a half ago, I was told my cholesterol was pretty high and I needed to lower it or else I would probably have to take statins in a few years. Not wanting to do that, I began to run a bit with the encouragement of my fiancee (who is a runner). I wasn’t really overweight, but losing a few pounds wasn’t going to hurt. A few weeks after this, my father had a heart attack (from which he has now thankfully recovered almost fully). This really got my ass in gear, and I began to run more consistently – even running in a few 5k and 4 mile races.
In the last year and a half, I lost about 15lbs, lowered my bad cholesterol, and raised my good cholesterol, without really altering my diet too much (although I do watch what I eat a bit more). I try to workout about 4 times per week using the elliptical machine, treadmill or running in Central Park. I was lucky because I heeded the warning signs and was hopefully able to change my habits before it became too late.
I urge those of you who are essentially working two jobs to take some time to exercise and take care of yourself. I live in Manhattan, so I walk practically everywhere, but if I was still living in New Hampshire, I probably wouldn’t. I get some great domain ideas when I am working out, and I think it’s important to be physically in shape as well as mentally.

How I Privately Acquire Domain Names

Elliot Silver
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I’ve been asked how I go out and attempt to acquire a domain name in private, and I am happy to share how I do it – although I don’t think there is anything special to it. There are a couple of ways to go about it, with the most common being via email, and the lesser used phone call. I believe the best way to acquire a domain name in private (that may not even be for sale) is to make a phone call to the owner.
With a phone conversation, you can hear the owner’s tone and gauge whether he is actually interested in speaking with you about selling his domain name. For most sellers, it’s much easier to negotiate a sales price via email because there’s more of an opportunity to craft the email. Because of this, you may be able to have a “real” conversation on the phone rather than a contrived email about how the guy has spent the last 10 years owning the name but hasn’t had the chance to develop his multi-million dollar plan. Sure, he might want to develop it, but chances are good that he would rather sell it. You can get a feel for that over the phone, rather than an email.
Phone conversations are also good because most people will pick up their phone when someone calls, whereas emails can be easily ignored. Phone calls are much more personal, and they show the buyer’s sincerity. Emails are impersonal, and they are much more easily ignored. The main obstacle I’ve found is that many phone numbers in the Whois database are either intentionally incorrect 555-1212 or they’ve been changed. If you can’t get in touch with the owner, you can’t try to buy it. This is where emails can be valuable.
While there really isn’t a special method to my efforts, I thought I would share an email that I typically send if a phone call didn’t go through:

Subject: Offer for XYZ.com  
Dear (personalized if possible),
I am interested in purchasing XYZ.com from you. I would like to offer you $xx,xxx (always a reasonable offer) for the domain name. If you would consider selling XYZ.com, please let me know and we can discuss the terms and payment details. Please give me a call if you have any questions. I can be reached at (xxx) xxx-xxxx.
Regards,
Elliot Silver (always my real name)

By addressing the person by name (when possible), he can tell that I didn’t send a bulk email, and that the offer is sincere – this is important because of the amount of Whois spamming to huge lists of similar names. I also make an offer that is reasonable. If I offer $100 for a $100,000 domain name, it’s probably going into the garbage, or I will get a “f-off” response.
How do I figure out what’s reasonable? I do my research on the name and make an offer based on my gut and research. No, I don’t think it’s wise to offer $100,000 for a $100,000 domain name, but maybe $60,000 if I want it. Trust me, if you make a reasonable offer, you will usually get a response. Before I sent emails with offers (when I first started), I simply asked if the domain was for sale. If I received a response, it usually said it might be for the right price. Well, instead of responding with an offer on the second effort, I figured I might as well just make an offer and grab attention. Just like a 1-click lander is usually more profitable than 2-click, I found that starting with an email is a better bet.
I’ve heard all the stories about people making those $100 offers and getting lucky. Yes, it happens on occasion (just like the jackpot slots), but with all the spamming, it’s happening less and less these days – although maybe on some non-.com extensions it could be more fruitful. I would rather make reasonable offers and negotiate than rather than wasting my time trying to get lucky.
When it comes to making offers, you usually get one chance to make an offer before the owner sends your email to the trash – or worse – his spam folder. Once you’re in his spam folder, it’s game over since he won’t even see any follow-up emails. With all due respect, if you don’t know how much you’d pay for a domain name, you probably shouldn’t be buying it 🙂

Buying Domain Names Privately

Elliot Silver
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I was just asked about how I buy domain names privately, and instead of replying to a comment/email, I thought I would make a post out of it, since the question has been asked before.   The question I received was: “just curious if you could provide some detail on your process of buying a name privately. I am not seeking specifics like prices you paid, etc. But more general stuff like, do you use an attorney to write up a sales contract and liability release, do you use escrow, etc.“
When I purchase in private, I only use an attorney if the deal is more complicated than normal, if I am working with a seller who is unfamiliar with domain sales, or if the seller requests it. I had an attorney draft a sales agreement template several months ago, and I generally use that – making changes as necessary. Since most of my purchases are unsolicited offers by me, I am more comfortable moving forward with a deal than if someone contacted me out of the blue to sell me a domain name.
I am vigilant about doing a domain history search (using Domaintools) to make sure everything lines up. I want to make sure the seller has the right to sell the domain name. I also trust my gut – if something doesn’t seem right, I don’t do the deal. If I see a great name that is too cheap, I will typically stay away unless I am confident that things are legit. A few things that I look out for in the history check are that the email address didn’t recently change, the contact email isn’t that of the developer who might be managing the name but doesn’t have the right to sell it, the name wasn’t involved in a dispute, and anything that looks suspicious.
50% of the time I will use an escrow service like escrow.com or Moniker. Escrow.com is more widely known outside of the domain industry, so I will use them if I am dealing with someone who isn’t a domain investor. I don’t want someone to get confused about using a domain service they might not trust. That almost happened once, so after I close a deal, I do my best to make things as simple as possible.
The other 50% of my deals are done using wire transfers or payment via Paypal. These are done exclusively with people/companies I know and trust, or if the value is less than it’s worth to use an escrow service – going on gut instinct again. I also use my AmEx when I pay via Paypal, so if something does go wrong, I am fairly confident that I will be covered. It’s important to know the person who you are dealing with when sending a wire, as your options for financial recovery may be more limited.
The most important thing is going with your gut. If something doesn’t seem right, you are probably right. If you aren’t 100% comfortable going at it alone, you should invest in an attorney to assist you. I know a few who are familiar with the industry, and I’d be happy to make a recommendation if you’d like. There seem to be new scams popping up every day in the domain industry, so it’s important to learn what to look out for and avoid the pitfalls.

Expounding on Development

Elliot Silver
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I wanted to write a more in-depth post on the development of my mini-site, TropicalBirds.com due to the amount of comments that were left and emails that were sent to me. First, thank you to everyone who sent their compliments to me. Domain investing and development can be isolating things, and I appreciate the support from my friends and colleagues.
Development can be difficult, time-consuming, and expensive. If you have a vision for a website but lack the development expertise, this post is probably for you. I came into the domain industry with absolutely no development skills or even development knowledge. I was barely able to put my development thoughts in an email, and 99% of the vocabularly I used was in layman’s terms. However, heeding the advice of a couple of friends, I taught myself how to use Dreamweaver.
For those of you who don’t know, Dreamweaver is an Adobe program used to build webpages. I probably only use about 1% of its capabilities, but that was really all I needed. Much of what I’ve done is cutting and pasting within the parameters created by my developer. I learned a bit of code (from my Ebay and blogging days), and using code, I was able to make simple changes.   I think there are books about code, but I am talking very rudimentary code.   Well… maybe I am getting ahead of myself.   Let’s start from square 1.
My first step in the process was buying TropicalBirds.com for several thousand dollars.   I saw the name and thought it would be a great foundation for an informational website about tropical birds. With hundreds of species of tropical birds, I knew I could jampack it with information that will get spidered (spread out) throughout Google. Since the name only receives a couple of visitors per day, I knew I would have to develop it to increase traffic and generate revenue. Spending several thousand dollars on a domain name is always a risk, but it was a calculated risk, and I believe I got a fair price.
As I was buying the name, I was thinking about a theme for the site – not difficult when it’s a category generic domain name. I thought about tropical colors, and I decided that orange, green, and red would be perfect.   I contacted LogoJeez.com, and verbalized my vision for the logo. A few days later, they presented a few logos from which to choose, and I have to admit, I barely changed anything. I’ve worked with them in the past, and it usually takes a few rounds to perfect, but this one was almost spot on the first time.
With my logo in hand, I was in contact with my friend Kevin who created the layout for me.   I told him what I wanted to accomplish with the site, I told him that I wanted an easy navigation scheme, and I gave him my logo. Within a couple of days, he provided the layout to me – it was almost perfect with a few minor personal changes. He sent me the base page and the stylesheet, which is used to dictate how the website will look – it’s basically where the architecture plans for the website are kept, and all the pages of the site read the stylesheet to know how to look.
The tricky part with development is building the pages. With a bit of coding knowledge (VERY basic), I am able to replicate pages to build new ones. I basically copy and paste text from Microsoft Word into Dreamweaver, and save it as a different page name. Kevin created the layout for me, complete with pictures, so I basically change the name of the image, copy the image into the image folder, copy and paste the text, and add other pictures using copy/paste. Since the meta placeholders are where they should be (keywords, page title, page description), I just change those out, too.   I do a “save as” and it’s easy.
When it comes to the technical aspect of things, I am a rookie. I wouldn’t say learning Dreamweaver is easy, but if you can learn a little bit about code (what is bold, what is italic, how to create bulletpoints…etc), you can easily make new pages for a website. I wouldn’t have been able to create the foundation and stylesheet from scratch, but with Kevin’s help, I got a great start. He was also willing to create a couple of the more difficult forms for me and has always been willing to give advice. Dreamweaver isn’t easy, and I know I am not using all of the features, but the best way to learn is by playing around with it.   Lot’s of doing and then undoing when I did something wrong!
I am not a great writer, and with Burbank.com being developed by yours truly at the same time, I don’t have much time to research dozens of tropical birds. I hired a copywriter based on a recommendation from someone else. Not only does she do good work, but she has had some great ideas for expanding the site. I get between 4-6 articles per day from her, and I am formatting and uploading the pages as they come. Once my copywriter has finished working on this project, I will recommend her personally, but I don’t want her inundated with requests before she finishes. I would happily use her skills again in the future.
For pictures on the site, I used copyright-free images from Wikipedia. These images are free to use as long as they are cited. All citations are on a single page of the site, which is linked from each page with an image. Additionally, I embedded some YouTube videos throughout the site, which was very simple and only involved resizing.
To generate revenue on the site, I have 3 Adsense advertisements on each page. While they are somewhat strategically placed, my plan is to test the placement at a point down the road to see how that impacts revenue. Additionally, I have Amazon affiliate links on some parts of the site. If people are looking for a bird cage for their macaw, I am happy to refer them to a place that can give them what they want. Once the site is finished, I will look for another affiliate who can offer   more related bird products, but for now Amazon will suffice.
Developing TropicalBirds.com isn’t/wasn’t easy, but I know my personal limitations, and where I didn’t have expertise, I hired someone who is an expert. Yes, development does take quite a bit of time, but I think it will pay off.   Instead of listing TropicalBirds.com as a domain name for $10,000, I will hopefully have a revenue producing website that isn’t for sale. All in all, the site cost under $1,000 to build and it probably took a solid 30 hours on my part for research, revisions, page building…etc.
I could have done the same type of website with CoolTropicalBirds.com or TropicallyBirds.com and saved several thousand dollars on a less expensive domain name. While that might have worked in the long run, if the site failed, I would have spent several hundred dollars on a website with a poor domain name. At least if TropicalBirds.com would fail, I would have a strong domain name to try and recoup my investment.
As I’ve said in the past, I really think development is where domain investors should begin to focus. Although I am still going to be relying on Google for revenue, I am able to increase the traffic to the site, something I couldn’t have done if I parked it. Also, I can sell links on the site to other bird websites, and eventually I can sell advertising, which will make the site non-reliant on Google for revenue. There are many more options with a developed website than a parked domain name.
This project has reaffirmed my belief that it is important to own a strong domain name.

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