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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.

No Hurray for "Hoorray"

Elliot Silver
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I understand the whole web 2.0ish theme of creating a cool sounding company name, but that becomes a problem when it confuses visitors who accidentally type-in the domain name phonetically. This type of thing seems to happen all the time when people opt to spend money on marketing efforts rather than ponying up to buy a good domain name. It’s almost like building a beautiful home high up in the mountains of New Hampshire. Sure, the house is beautiful, huge, and there is plenty of cheap land to build a sprawling estate, but when it comes time to invite your friends, you better hope it doesn’t snow, because they aren’t making it if there’s snow.
I was reading through my emails this morning, and I received a press release with the headline “Hoorray.com Acquires “Hooray” Domain Name.” Apparently, the company thought buying the correct spelling Hooray.com was press-release worthy. According to a representative of the company,

“This is a significant step as we prepare to relaunch the 2.0 version of Hoorray later this summer,” said Robin Zieme, Director of New Ventures for Hoorray. “While the spelling of Hoorray with two r’s was not a hindrance, it will ensure that all traffic intended for our site comes our way.”

Maybe I am not their target audience, but whether the name has one “r” or two, if someone suggests that I visit Hoorray, I am probably going to type in Hurray.com, another proper spelling of that word. Yes, having a cool and unique company name makes for a less expensive domain name, but losing a considerable amount of traffic to the proper/alternate spelling of the domain name can be an expensive mistake – especially since the correctly spelled domain name will increase in value once the incorrectly spelled domain name starts driving traffic to it.
I’m old school. If I am going to confidently build an online company that will rely on web traffic for revenue, I am going to bank on its success and buy a non-confusing domain name. At least if the company fails, the domain name will still have value!

Combating Content Theft

Elliot Silver
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One of the things I’ve learned about search engine optimization is that search engines such as Yahoo and Google really like unique content. The more unique content you write, the more the search engines will reward you with better placement in their rankings, obviously driving more traffic to your site. Sometimes when unique content is written, others steal it, either trying to pass it off as their own or because they are lazy and want to put up information but don’t feel like writing their own content.
Lately, I’ve noticed an increase in the later. There are people stealing (or borrowing) from various domain blogs and posting either full posts or posting partial posts without adding their own commentary and without seeking permission. While I don’t mind if someone quotes me for the sake of writing an informative blog post, I do mind when people just take my content without even asking.
When I notice this, I do my best to contact the domain owner via Whois lookup to let them know I have an issue. I don’t want them to gain rankings in Google at my blog’s peril. More often than not, the offending person apologizes and takes down my content. However, there are times when the offender has Whois privacy on their domain name and doesn’t have their contact information readily available. This is annoying, and through a hosting company, I found out a way to stop it.
If a website steals content and you either can’t get in touch with the owner or the owner refuses to take down the material, you can file a Digital Millennium Copyright Act complaint with the host, and the host legally has to take action within 24 hours of receiving the complaint. The one caveat is that you need to file an official complaint. It’s not difficult though, and you don’t need an attorney to do it for you, as there are several DMCA complaint templates available online at no cost. Simply find out the web host and email them your complaint.   The issue should be resolved fairly quickly.

Take Advice for What It's Worth

Elliot Silver
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When I had to write reports in high school and college, I was usually required to cite many sources rather than a single source. This was to ensure that the information was accurate and factual instead of simply one person’s opinion. Sometimes a person’s opinion is accurate and factual, but it is important to see what others say to make sure of it. The same goes when you are looking for advice in the domain industry.
Whether you are looking for advice on whether to buy, sell, develop, park…etc or anything at all in this industry, you should try to get as many opinions as possible and make the best determination yourself. Before Frank Schilling started his famous blog and before the domain forums became as popular as they are now, most industry pioneers had to go out on a limb and go solo for many of the things we openly discuss today. They didn’t have (many wouldn’t want) the luxury of openly discussing strategy. Today, it is an important part of the domain industry.
Just like anything else, it is important to know about who is giving the advice and their motivation. I was reading one of the popular forums the other day, and someone was asking how they should reply to an offer/solicitation. Some of the answers were not only unhelpful, but they probably would have been harmful. There are plenty of sources of information out there, so the best advice I can give is to use all of your trusted sources carefully.
Free advice is cheap, but it can be very expensive.

Bigger Isn't Better

Elliot Silver
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Of course I am referring to the size of your domain portfolio. Some people may think that because they have 1,000, 5,000, 10,000 or 20,000 domain names, they are better off than others. I really couldn’t disagree any more, unless you happen to have an unbelievable portfolio (meaning you spent many sleepless nights over the past several years researching and cashing in on money making domain names).
I saw a post where people were asked how many domain names they own, and I was pretty surprised at the amount of people who owned hundreds of domain names. Additionally, I’ve received emails from many people who have asked me to appraise their domain names, and they’ve sent a list of hundreds of mediocre domain names to evaluate. I really believe a person can go broke quickly by registering hundreds of new domain names. Technology and data mining scripts have gotten to the point where it is nearly impossible to hand register domain names that will pay for themselves in PPC revenue, unless a trend or event happens that makes the names relevant. I would like to suggest that people focus on quality and not quantity.
One trend I’ve noticed is that some people believe that because they have an entire portfolio of hundreds of similar names, the set has more value. For example, if someone owns 12345Golf.com, 12345Shopping.com, 12345Travel.com, 12345Sex.com…etc, the names aren’t more valuable simply because almost every 12345 domain name is owned by them. Unless someone else wants to build a huge network of websites using that idea (doubtful), the set is a $7.50 X x,xxx annual drain. One thing to think about is why would someone pay your premium, when they could come up with an idea that is similar and hand register the set (123456 for example).
There is nothing wrong with owning a large portfolio of domain names if you are generating enough revenue to support it, or if you are making enough profit in sales that you can incur the renewal costs with no problem. However, I have seen people become overwhelmed with renewal fees, and it can be difficult to watch some domain names drop because of it.
My advice is to keep your portfolio as trim as your budget will allow. Instead of buying dozens of new registrations, it might make more sense to buy one quality name.

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