Advice

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.

Greetings from my father’s store in New Hampshire. I am in the region doing some research for my Lowell.com website which should launch in a couple of months, and I am spending the day with my parents (Happy Birthday, Mom!!) Of course, my mind is always thinking about domain names, and that was clear when I walked into the book shop next door to buy a birthday gift.

At the register, I noticed that they were directing people to their website, which wasn’t close to the exact name of their shop. Knowing the manager, I asked if they had tried to acquire the generic .com for the store (a generic word + Bookshop). He said they had, but it was too expensive. Ironically, after coming back and researching, I saw the generic name is owned by a friend of mine, and I know my friend develops all his names (hence the reason for the high cost he quoted).

I also asked if he bought the actual name of the book shop, as that would also have been an even better choice. He said he hadn’t, but when I searched, I saw it was registered back in August and is now a PPC landing page. Unfortunately, the owner has privacy protection on his Whois so it won’t even be possible to ask if he would sell it, leaving them with the choice of either maintaining the status quo or filing a UDRP. The name of the store is fairly unique and the only Google references for the term together are for this little shop.

The shop has been in business for over 15 years, so there were plenty of opportunities for them to buy the name, but they didn’t have the foresight to do so. They are lucky the current owner has a book related PPC landing page rather than adult-related material. The moral of the story is to spend $8 to register the name of a potential new business or idea. The cost of acquiring it after someone else buys it can be financially restrictive and time consuming.

The domain investment business is very small, and because of that, most people within the industry know each other well or at least know of each other. Although most people work independently, there are times when working together can benefit all parties.

If I know someone is looking to acquire a particular type of name, I may personally reach out to that person if another acquaintance is selling a similar name. I don’t do it for a commission, rather, it’s out of courtesy to help two acquaintances make a mutually beneficial deal. Likewise, if I see something shady that may impact an acquaintance, I am quick to point it out, also as a courtesy, because I would hope for the same.

In an industry where thousands of dollars can be transfered for a domain name based on a few emails, honesty and trust is the most important thing. This is the most important lesson to heed in the domain business.

I haven’t been in this business for a long time, but I have seen my fair share of things that leave me shaking my head. Some people will do whatever it takes to advance, risking their own financial status and their reputation. Perhaps making an error in judgment once will be forgiven, but if it’s done more than once, others tend to believe it was more than just a simple error.

The domain investment industry can be fun and lucrative. If you are just starting out, remember that there are no shortcuts, and honesty and integrity are two of the most respected (and expected) qualities.

While some people may complain that its almost impossible to find a true premium generic domain name at a “good” price these days, I believe there are still great deals to be had.

Like the saying goes, sometimes it’s necessary to overpay today to find a good deal tomorrow. I believe there are three reasons to overpay:

1. Create goodwill with a domain owner/seller to buy the next name (the really desirable name) from him for a fair price. Most sellers prefer to deal with trustworthy, quick paying clients that they know rather than trying to establish a new relationship with someone else.
2. Acquire a group of domain names in the same vertical or a set of similar names that add value to each other. If a person owns the singular and plural of a name (Deal.com & Deals.com), the value of both can be enhanced as a set. Likewise, owning several extension (.com/.net/.org/.info) of the same domain name can increase the value, too.
3. Ensure that the offer meets the seller’s needs in order to secure the name. If the seller isn’t inclined to sell for market value, it may take a considerably larger sum to convince the owner to sell.

Frequently, a person only has one chance to buy a domain name before someone else acquires it for a development project. Once a domain name is developed into a website, the name may be impossible to acquire. To avoid this, sometimes a buyer has to jump on an opportunity as soon as it presents itself, or the name may not be on the market again.

If the ideal domain name is available to acquire, now might be the time to do what it takes to secure it. Otherwise, it may be a source of regret down the road.