Advice

It’s the time of year when I evaluate everything that happened during the past 12 months and set new goals for 2008. This is always a great time of year, because it allows me to briefly reflect on the positive things that have happened, and allows me to think about the things that could have been better. There is no point in sugar coating things, so deep personal reflection is essential in order to grow.

Although I think this reflection should be made internally, I will share a few of my goals for 2008, and if you would like to share yours as well, I welcome it.

Domain Investing
– Purchase 1-2 premium domain names with the goal of developing them in Q4 2008
– Trim down my portfolio, only keeping strong generic domain names and a few speculative names

Domain Development
– Successfully launch Lowell.com
– Create strong relationships with Lowell businesses and civic leaders
– Begin phase two of Lowell.com, including some social networking capabilities and newsletter
– Build several miniature websites using the hybrid development concept I discussed a couple of weeks ago

Blogging
– Continue to write 1-3 original blog posts per day to give advice to readers of my blog
– Teach people about the value of domain names using well-executed examples
– Forge advertising relationships with industry leading companies

While you are thinking about goals, it is important to think about more than what you would like to accomplish in 2008. You should also take some time to consider (or reconsider) your life goals. What do you want to accomplish in life? Where are you now compared to where you want to be? What can you do in 2008 to make it easier to achieve your life goals?

This will help you stay in track in business and in life.

Reading Sahar’s post this morning has me also wondering what people have in place as an “out strategy.” What if domain values suddenly dropped (due to a number of possible factors), and the value of undeveloped domain names suddenly plummeted? I can’t even imagine this happening on one and two word category killer .com domain names, but this is something to think about for people whose portfolios may be made up of decent, but not killer domain names.

As with any market crash, panicking will only make things worse. I would advise against rushed selling just because the perceived value has decreased. The domain market is always in somewhat of a state of flux because there is no completely accurate price guide.

Here are five recommendations I would make while you evaluate your portfolio (which is always a good thing at this time of year)
1. Cash in hand is very important – (you can’t pay your taxes with domain inventory)
2. Have a development plan for each name you own. If PPC advertising drops, you will be more protected
3. Trim down your portfolio ($8/year x # of names is expensive).
4. Drop names that realistically have no chance of making money unless someone random wants the name to start a business. A few names at $8/year is nothing major, but if you have 500 or 5,000 this is a huge sunk cost.
5. Make less speculative purchases. Just because Brittney’s sister is pregnant, doesn’t mean you need to try to guess the name of the baby and buy 100 .com names.

As an aside, if you are concerned about this and want to cash out of your one word category killer .com names, drop me a note 🙂

I sometimes reflect on just how incredible the Internet is with its reach across the globe   I am doing some work at Starbucks right now, and the guy who stands on the corner collecting money for the homeless walked in to get a cup of coffee. He and I frequently nod to each other and wish each other a good morning, but I know absolutely nothing about him.

As he was leaving Starbucks this morning, he saw me on my computer and asked if I had heard of YouTube before.   After telling him I was familiar with it, he gave me a piece of paper with his name on it and told me to check him out on YouTube.   Low and behold, there he was beat boxing. His seven videos garnered a few hundred views in about a month, no doubt intrigued by his beat boxing skill and cool personality.

On my way home today, I am going to give him something more valuable than a dollar or spare change.   I am going to make a suggestion to him. He should buy the .com of his beat boxing persona (I will even buy it for him). He should then overlay this domain name on his videos to bring traffic to his website. If he adds his contact information to his new website, perhaps someone across the globe will be intrigued by his skill and offer him some work. Even a simple blog site with contact information could give him the exposure he needs to break out of anonymity.

Assuming he takes advice, this will be one time he is happy that I didn’t give him a dollar.

I frequently visit the various domain forums, and I am often surprised by the lack of common sense exhibited by some people who are too trusting. Accepting a direct Paypal payment directly from a buyer on a transaction over a few hundred dollars can pose a significant risk. Apparently it isn’t too difficult to request a chargeback, and once the domain name is transferred, if a chargeback is requested, it may be difficult to reclaim the name.   This would remove the money from the seller’s account, while the buyer can retain possession of the domain name.

Another thing that seems to occur too often is payment for domain names using a stolen or compromised Paypal account.   When the actual account owner learns of the charges and requests a chargeback, the domain seller is once again left without the domain name and an empty bank account.

The most simple way to avoid this is to use common sense. If you are completing a deal with someone who you’ve never met or heard of, it is always best to use an escrow service such as Escrow.com or Moniker. If that person refuses to use an escrow service, it is probably better to avoid the transaction. If you have a sneaking suspicion that something is amiss, its always best to trust your gut.

With domain hijackings seemingly at an all time high, I think now is the time for a public domain registrar to take action. I believe security key fobs are a nearly impenetrable line of defense that should be put into action by a responsible registrar. This would curtail domain hijackings, potentially saving registrants thousands of dollars in legal fees and hundreds of hours fighting to have their domain names returned.

Domain hijackings can occur when a hacker gains access to a person’s domain registrar account. This can be done by hacking into someone’s email account using a variety of methods or by hacking into the actual domain account. Either a weak password or a multitude of other factors can potentially lead to this outcome. Once a hacker is in possession of the registrar account, there are many ways he can control the domain names without raising the attention of the domain owner. If the domain names are transferred to another registrar, it may be too late for the rightful owner to take action, and the process of getting the domain names returned can be costly and time consuming.

Domain names are intangible assets, and the loss of one can be fatal to a business. It can mean missed sales, lost emails sent to addresses linked to the domain name, confused customers, and it can be emotionally draining on the registrant. While we are able to secure our tangible assets such as jewelry or property deeds, it is more difficult to secure our domain assets. For example, if I lose the key to my safety deposit box, the bank doesn’t simply permit the finder to access the box. As it currently stands in the domain business, if a hacker gains access to my domain account though unscrupulous actions, he may be able to take control of my domain names. I don’t think its fair to be held accountable for something that may be out of my control.

With that said, I think a security key fob with a changing passcode (similar to what Paypal offers) could help secure a domain registrar account. I would pay a premium for this service, and I am sure others would as well. Having good security is a unique selling point that distinguishes some registrars from others. Having the best security system in place before competitors would certainly give one registrar a major competitive advantage. Most registrants wouldn’t want multiple security key fobs, so consolidating all domain names at the most secure registrar would be the most likely outcome.

I urge all registrars to take action, no matter how secure you believe your system is.

When Sahar writes, I generally listen. This morning, Sahar made some predictions for 2008, and the following predictions worry me a bit:

“1. Top prices will drop: As the top of the domain market is driven by a handful of buyers (Frank Schilling, Kevin Ham and Co., Anything.com), I see those coming to the conclusion they either have enough to develop or have better returns elsewhere, therefore stop paying top dollars.”

“5. Top portfolio owners to diversify away from domains, investing in other technologies (Search technoligies, others), services ( arbitrage, others).”

Sahar has a great feel for the domain name market, better than most, so when he makes a prediction like this, I would take some time to evaluate your holdings.

I’ve noticed that many of the mid-level to highest-priced domain auction acquisitions end up in the portfolios of the big players. They control quite a bit of the money that is invested in domain names. If one or more of these companies drop out of the bidding at domain auctions, we could see what would appear to be a market correction. Of course, another company could come in and fill the void, but it would take a whole lot of financial power to do that.

Regarding the prediction below, I know that Owen Frager has also been saying something to this affect for a while:

“4. Top portfolio owners to collaborate more with marketers outside the domain space (such as Scott Day/Seth Godin The “ever” project), SEO folks.“

This is a smart approach to domain development. If you look at some of Scott Day’s domain names (like Chairs.com as an example), you wouldn’t know that each wasn’t a full business. Not only does Scott seem to have one of the nicest portfolios assembled, he also has one of the smartest development strategies.

At this time of year, it’s always good to evaluate your portfolio and make changes if necessary. It’s smart to have a diversified portfolio in case there is any type of domain market correction. When it comes to domain names, content is king (for monetization and protection), so now is the time to consider your development strategy.