I was looking in my trackbacks today and saw a trackback from a blog to my post “.Mobi Meltdown” where I linked to another blogger with whom I agreed about .mobi names at the TRAFFIC auction. I was going to respond in the comment section of that person’s blog, but I ended up writing quite a bit and figured I would give my thoughts more exposure rather than burying them at the bottom of someone else’s blog.
From DomainerDeveloper.com:

“I must reiterate that I find it disenchanting and absolutely remarkable how so many credible, domain industry veteran investors appear to still be missing the mark when it comes to understanding these fascinating domain extensions. Instead of exploring the many possibilities and communities that are building up around these unique extensions, they continue their relentless attacks.”

First off, I disagree that I have been a source of “relentless attacks.” Before last week when I asked “Is There Money in .Mobi Development,” (which only received one affirmative response with hundreds of page views) the last time I even mentioned anything about .mobi was a February 7th post where I was commenting on someone else’s post about the trouble facing .mobi in getting consumers to recognize and adopt the extension. Prior to that, my last mention was way back in December – a lifetime in this business. If this is considered relentless, that’s pretty weak.
Aside from this inaccuracy, I must ask one important question. Why would I care about .mobi or .any other extension when I can do the same shit with my .com names? If I believe many mobile users are navigating to my websites, I can make sure the mobile browser is detected to give the visitor an optimal experience. Whether I own the .mobi or not, my websites can be mobile-ready, just like thousands of other large companies who may not have even heard of .mobi (or own their .mobi names for protective purposes).
I don’t have the time or bandwidth to develop more than a few domain names at a time. Why would I want to mess around with an unproven extension when I can stick to .com? I am sure there are plenty of people who have plenty of time to experiment and try to earn a return on their investment, but I don’t have the time or the desire to become a .mobi missionary.
At this moment, I don’t envy people who paid mid 5 figures recently for .mobi names to see the 13 “premium” names sell for no more than $18k at last week’s TRAFFIC auction. I’ve said it before and I will say it again, people like Rick Schwartz can afford to take a $200,000 gamble on a .mobi or .whatever domain name. If he hits paydirt in 5 years, people will still probably be jerkoffs to him, but it is his prerogative. I don’t see a very active market for .eu domain names, and I am not familiar with too many that are developed, although there were many people who spent thousands of dollars on those names.
When I buy a domain name for development, I make sure the name is as liquid as possible in the event things don’t work out. If I wanted to sell Lowell.com, Burbank.com (currently under development), WeddingEntertainment.com or a few other names I own, I could make a profit because I bought them for fair prices. If I paid $25k for a non-“premium” .mobi name, I wouldn’t be happy at this moment knowing what these recent “premium” names did. That was the point of my last post.
Sure, maybe 5 years from now some alternate extension domain owners will hit paydirt. IMO, it would have been smarter to invest in more liquid domains in the .com extension either for development or to flip. Are condo investors in Vegas or Miami happy when they see much lower comps on similar condos that they own? Are they willing to wait out the market? Some are, but many are just trying to not lose their shirts when they sell rather than waiting out the market.
Sure, maybe I am “missing the mark,” but I think we are aiming for different things.

I wanted to share some advice to people who are new to the industry, and perhaps others who make the same beginner mistakes. If you just registered a domain name in the past month or two, and you are looking to sell it for thousands of dollars, it makes you look pretty silly. Unless you registered a domain name for a term that was just coined or some other very hot trend, chances are good that the reason it was unregistered was that others didn’t believe it was worth the registration fee, let alone the thousands of dollars you are trying to get for the name.
One of the keys to my success when I started out was that I priced my new registrations pretty well. I saw people were trying to sell new registrations for several hundred dollars, and I was very happy to sell the names I just registered for $30-100/each. Sure, it took longer to make a large profit than it would have if I sold just one name for several thousand dollars; however, the likelihood of selling a new registration for thousands of dollars is slim to none (and slim just left the building). Yes, I’ve seen it done a couple of times, but I’ve seen more people get chastised for trying to do this than for actually selling them.
If you are trying to break into the business and do well financially, it looks pretty unprofessional to expect a gigantic return on your very short-term investment. Don’t be greedy, and you will be rewarded over time. For some examples of this, search the term “domain” on Ebay and sort from highest prices to lowest, and you will see plenty.

I’ve mentioned this a few times on my blog in passing, but I want to briefly discuss the Revenue Sharing model of doing business. When I was at AIG, we frequently used this model for various projects where we didn’t necessarily have the expertise or the ability to commit the necessary time to perfect a project. We would go out and seek the best companies in the space and work with them on specific projects, and in return for taking less up front revenue, they would receive a nice revenue share percentage that would have a very long tail. This would yield much greater revenue for the partners in the long run, and those who put skin in the game were rewarded.
While this might not work for everyone or every project, there are certain instances where this model fits perfectly. As mentioned yesterday, I am going to work with a Lowell-based sales representative to sell advertising space on Lowell.com for a commission rather than pay him hourly or hire him full/part time. As a result of earning a percentage for each sale, he will be incentivized to generate more sales and build strong relationships with local businesses. It will also be in his best interest to give me feedback to improve the site. The better the site is, the easier it will be for him to sell advertising space.
One thing to keep in mind is that the partners you work with need to have the same ethics and morals that I (or you) have when conducting business. When a person is working for straight commission, they may tell prospects anything to close a deal. Ultimately, what they promise a potential client will be the responsibility of the business owner. It’s always important to check your references when you are working with someone who will represent your business.
This model might not work for small business owners dealing with large businesses, but you won’t find out until you ask. Some companies can justify taking a risk by losing upfront sale dollars with the promise of a long tail revenue share. If you have a good business plan, it can’t hurt to pitch this model instead of paying for everything up front. The prospect of earning passive revenue for a long time is enticing to many companies, and as long as the idea is backed by a solid business plan, there is usually mostly upside for doing this.
While I haven’t done this yet in the domain or development business, I have experienced this in my former career. This is a great way to keep upfront costs down, and it’s also a great way to mitigate some risks when you are working on a new project. Sure, you lower the potential profit margin down the road, but if the companies you work with have skin in the game, they are more likely to work harder for you, assuming they see you working hard and buy into your vision.