I haven’t done this before, but I am thinking about it and would like some advice. Have you ever gone out to buy a domain name based on the current natural search position rather than the domain name? For example, if you have a great oil painting-related domain name that doesn’t rank well in Google, it might be in your best interest to try to acquire the highest ranking website (currently 1st-art-gallery.com) and do a 301 redirect to your domain name.
Although content is king and Google would probably notice that you don’t offer the same website content as what was on the #1 site, you would be able to retain the inbound links that the other website has. Since one of (if not) the biggest ways Google ranks domain names/websites is based on the inbound links, your great domain name with poor links would all of a sudden have a ton of inbound links.
Personally, I have never tried to buy a shitty domain name simply because it ranks well in Google, but since I have begun developing some of my better domain names, it might be worth doing. If anyone has done this before, I would really like to hear how this would help the domain name/website to which you 301 the higher ranking name. At the next update, would Google recognize your new name as the higher ranking website?
Domain Recognition – Buying Domains Smartly
After spending two weeks in Europe and the UK, and now thinking about the industry with a new “set of glasses,” I really think that relevance is more important than the extension – when it comes to developed domain names. With the current domain parking and monetization options, domain names that receive traffic will typically have some value, but as PPC revenue continues to decline, the safest and smartest domain acquisitions are those that are usable and recognizable by Internet users.
With few exceptions, no matter what the extension is, I think domain usability and visitor recognition are two of the most important things to consider when making a purchase. If you or someone else would be willing to spend thousands of dollars building a website on a particular domain name, it might be one in which you would want to invest at the right price. Intuitive names like Enoteca.it (wine bar in Italian), Mapas.es (maps in Spanish), Homes.tv, Burbank.com…etc are all great domain names on which to develop a website as people will presumably type them in searching for something familiar. People know the words, and if they are familiar with an extension, they will have no problem visiting a website on that domain name.
Sure, a domain name that receives traffic may be good, but a usable domain name with little traffic may be much more valuable. While some may argue that a name with inherent traffic is the most valuable, I would argue that a usable domain could be more valuable. If PPC continues to drop as it has, direct to business advertising and/or domain sales to end users will be the best way to make money on a domain name in the future. While names that receive traffic for unknown reasons may have value now, down the road, when they are more difficult to monetize, they may be worth less.
I always think it is smart to buy non-trademark, product-related, service-related, geographical, descriptive and other similar generic domain names. People will always want to build on these domain names (if you don’t), and they will always be salable. In tough economic times, it is important to make wise investment decisions. The deals you make now will allow you to be successful in the future.
I am still recovering from the trip, so please excuse typos or if this doesn’t make complete sense 🙂
Why I Keep Buying
Someone asked me why I was continuing to buy domain names when I couldn’t find the time to develop all of my names right away. One suggestion was to allocate my resources to developing what I have instead of buying more domain names. The question is reasonable and I spent some time thinking about it. Truth is, at heart, I am a domain investor. My business is built around acquiring domain names for good prices and then determining how to make a profit from each domain name I acquire. While I have been developing some of my names and continue to do so, I am not a developer. I believe to unlock the real value of many domain names, development must be done, but I have to determine where to allocate my personal resources, and sometimes development isn’t the best strategy.
When I am in the process of buying a domain name, one of the things I consider is how the domain name could be developed to make a profit. Once the name is acquired, I determine whether it would be possible for me to do this and/or whether I would have the desire to do this. If the answer to either is “no,” I will typically put the name up for sale. Sure, I could keep every great name I buy, but that would make it difficult to generate revenue here and now. In the long run, knowing what to develop and what to sell is crucial, as development can cost thousands of dollars, and recouping the investment might not be possible on some domain names, depending on how it was spent.
A real world example is one my fiancee and I are discussing at the moment. Our kitchen was re-done a couple years before we bought the apartment. I don’t love the kitchen, but I don’t hate it. We asked our building’s realtor to take a look at our place and see what improvements we can do that will be beneficial when we sell in a couple of years. Long story short, she said the kitchen looks good, so there aren’t many things we can do to add any more value to the apartment. If we make changes, it will only marginally improve the value of the apartment, although it will cost tens of thousands of dollars to revamp the kitchen. The kitchen is in great condition, but a buyer might make changes to his liking, so it’s not necessary or recommended for us to do it with the purpose of adding value. Just like some domain names, a website might look nice, but a buyer will probably have his own business plan, so sometimes its better to just leave it alone and sell it as is, as any changes won’t impact the value.
With my developed names, I am planning ahead to create a steady revenue stream for 3, 5, and 10 years down the line. I will always have to adapt to changes in the Internet landscape, but because I am bullish on the .com domain market, I believe no matter what I do, my domain names will increase in value. This is why I spend time and money developing good domain names rather than spending time and money building good websites on sub-par domain names. It is critical to build websites that can adapt to changes, but it is also important to know which domain names to develop and which should just be re-sold. I am always a buyer of great domain names, but determining which I should develop is difficult.
How I Privately Acquire Domain Names
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 Â
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
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. Â 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.
No Hurray for "Hoorray"
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!