Correcting an Out of Context Article

Elliot Silver
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1

As I do every morning, I received a Google news alert today with the topic of domain names. The title of the article is “Expert says very few domains are worth millions,” and it was posted on GlobalGold.co.uk, “UK’s most progressive and innovative web hosting and web-based application providers for SME business today.”

Ordinarily I don’t post links to articles I believe are written poorly, but this one happened to include my opinion as the source, and the conclusion they drew was taken from a completely unrelated article. I don’t know if the article was written as SEO bait, but it got me to read it, and unfortunately, it caused me to write this post.

The article tried to juxtapose my article about the problems impacting domain auctions with the Media Post article, How Much Are Domain Names For Campaigns Worth?, in which Laurie Sullivan wrote, “Marketing and advertising agencies looking to strengthen campaigns might pay just about any price for a solid domain name if it means building a better relationship with consumers.”

The Global Globe article referenced me by writing:

Laurie Sullivan told Media Post that the most commercially attractive web addresses can sell for millions, meaning they can be prized business assets.

However, internet entrepreneur Elliot J Silver says multi-million pound transactions are the exception to the rule, as domains generally have a much lower value.

Although I do think that million dollar domain names are a very small percentage of overall domain registrations, I don’t think that this has anything to do with domain auctions, as the article further implies (“Writing in his blog, he reported that domain auctions have suffered lately due to firms being unrealistic as to the value of their addresses.”). The article was confusing to read, and it didn’t really make sense to jump to its conclusion based on an unrelated post of mine.

My opinion on valuable domain names can be found in Website Magazine’s Web Trends for 2010 article, in which I was asked for some predictions for the new year. In that article, I said  “High-value keyword names like toys.com and candy.com, which sold this past year, will continue to command high prices. Companies will continue to invest in their own businesses and will acquire high-value keyword domains names for growth and for competitive reasons.”

This puts my opinion more in line with Sullivan’s Media Post article than the Global Gold article insinuates.

Francois Makes Business Decision, Lazy Domain Investors Go Nuts

Elliot Silver
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32

Apparently Francois Carrillo of Domaining.com decided to add tech blog feeds to his website today. The result of the decision was that Domaining.com was briefly filled with non-domain related news articles. This made it difficult for domain investors to quickly find their favorite domain news and blog articles, and people publicly complained in blogs, Facebook, forums, and Twitter. That is, until Francois reversed course and took those feeds out.

I know Domaining.com has become popular because it allows people to easily find interesting domain-related news articles without having to visit a whole host of websites. I even get about 8-12% of my daily traffic from Domaining.com, so any confusion or excess articles might result in less traffic to my site. However, Francois has every right to make his own business decisions without public criticism from users who aren’t paying him a dime.

I don’t know if his business model is good (because someone may eventually buy him out) or it sucks (because it’s now a loss leader), but that’s not my business or anyone’s business.

The fact that we use and benefit from Francois’ website should not mean that we have the right to publicly criticize the guy and put him on blast when he tests things out in an effort to make some money. If you are paying for services and they aren’t what you agreed to when you signed up, you have every right to complain. When you are using someone else’s services at no cost to you, you have no right to complain.

I support the First Amendment right to free speech, but I think it’s uncalled for when people openly criticize the guy for trying to make a buck with his business. There are plenty of people who do worse things to make a buck.

Domain Investor Interviews on Domainers Digest

Elliot Silver
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0

Based on feedback I have received from people regarding my “5 With…” series of interviews, I know people love to read about how others got started and found success in the domain investment business.

Steve Kaziyev recently launched a new website, Domainers Digest, and the purpose of the site is to give people an inside look at people from all parts of the domain industry.

Today, Steve has an interview with Frederick Schiwek of EuroDNS.com, the person who sold Voodoo.com for $300,000. Over the next few weeks and months, Steve has interviews lined up with people such as Parked.com’s Jazmin Carrillo, Bill Sweetman of Tucows, John Yeomans of Edge Capital, and many other people you may know but may not know much about.

I wish Steve lots of luck with his new venture.

Just as an aside, this isn’t a paid post nor am I being compensated for it in any way.

2010 Domain Industry Predictions

Elliot Silver
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20

I was asked by the editor of Website Magazine to give some domain industry predictions for 2010 for their Web Trends for 2010 article. My quote from the article is below, but I am also interested in hearing what your predictions are for the upcoming year.

“As reported in the December issue of Website Magazine, businesses have increasing opportunities in the domains industry. Elliot Silver, president of Top Notch Domains and Silver Internet Ventures agrees. “High-value keyword names like toys.com and candy.com, which sold this past year, will continue to command high prices. Companies will continue to invest in their own businesses and will acquire high-value keyword domains names for growth and for competitive reasons,” Silver says. “With PPC revenue down and not looking like it will increase in the near future, some domain owners will make top domains available for acquisitions that haven’t been available in many years.”

In addition, the Microsoft-Yahoo! deal will affect the domain industry, according to Silver. “The Microsoft and Yahoo! deal is going to be impactful on domain name values because Microsoft’s Bing tends to rank developed keyword domain names higher than Google and Yahoo!,” he says. “Right now, impact is minimal because of Bing’s relatively low market share. With the deal, Bing will manage search results for Yahoo!, bringing the market share to 30 percent of search from around 8 percent. This is significant.”

What are your predictions for the domain business in 2010?

Valuate.com Adds Trademark Checker

Elliot Silver
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1

Valuate.com has launched a trademark checker engine in conjunction with their domain evaluation system powered by Estibot. When you enter domain names that appear to have trademark issues – be it a Fortune 1000 company or brand, there will be an error message notification letting you know the system has detected a trademark.

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When I am searching for a domain name and think there could potentially be a trademark issue, I search the United States Patent and Trademark Office’s TESS, which is a database of live and dead US trademarks. It’s important to note that not every system is accurate, and you should seek professional legal advice if you have questions.

Obviously TheGoogle.com would be a TM issue, but the system didn’t target Windows.com as a potential trademark. Of course, a glass company could legitimately use Windows.com, but a computer company other than Microsoft would probably have issues if it was used.

One reason I like the offering is that many people who are new to the industry don’t know much about trademark issues – or don’t think of them as a potential problem. I’ve been upfront about stupidly hand registering some names with trademarks back in 2003. I didn’t really know any better at the time. With this offering, people who want to check on a new registration like GoogleBusinessServices.com or something like that will get the warning that the name could be risky to own.

Taking Valuate.com for a Test Drive

Elliot Silver
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13

When I visited Domaining.com yesterday, I saw the headline announcing the launch of Valuate.com, a sister website of Domaining.com and a domain valuation tool that is run using Estibot 2.0. Users are allowed to look up 50 domain names if they aren’t registered users of Domaining.com and 200 if they are logged in to their Domaining.com account. This is the Beta version of the site, with the full launch expected to come in December.

One of the easiest ways to do a comparison of domain values is to compare recent domain sales from DN Journal with the results from Valuate.com. Since a domain name’s actual value is derived from what someone would pay for a domain name, one can infer that the recent sales price is close to its valuation. I wanted to take the new site for a test drive to see the results, and I figured using recent sales would be the most fair way to compare.

Below are some recent sales along with their prices and the Valuate.com valuation. I also added a few of my domain names to see how they are valued.

Domain Name | Sales Price | Valuate.com Valuation
Resumes.com | $400,000 | $910,000
Candy.com | $3,000,000 | $3,080,000
Bubbler.com | $10,000 | $10,000
Exterminator.com | $600,000 | $620,000
Ticket.com | $1,535,000 | $2,600,000
Luck.com | $675,000 | $690,000
Voodoo.com | $300,000 | $320,000
Jets.com | $375,000 | $620,000
Christian.com | $600,000 | $1,300,000
ChinaTours.com | $200,000 | $210,000
800.com | $250,000 | $260,000
Physicians.com | $250,000 | $700,000
DiamondRings.com | $228,420 | $1,970,000
Brazil.com | $500,000 | $630,000
FreeQuotes.com | $210,000 | $220,000
Snowboards.net | $30,000 | $31,000
Science.org | $20,000 | $29,000
LMK.com | $58,500 | $60,000

Some of my companies’ investments:
Torah.com | N/A | $110,000
Burbank.com | N/A | $160,000
Dreidel.com | N/A | $25,000
AthensVacations.com | N/A | $15,000
DubrovnikVacations.com | N/A | $1,000
CabCompanies.com | N/A | $2,200
CatOwner.com | N/A | $1,200
Oenophiles.com | N/A | $4,100
TropicalBirds.com | N/A | $2,800

Overall, some of the values seem to be fairly on point, although I wouldn’t sell a few of them at close to the valuation (TropicalBirds.com for example).   My domain names were private acquisitions (except for Lowell.com), so there probably isn’t an element of human intervention with these values.

One thing I disagree with is the disclaimer, “We DON’T valuate businesses, we DON’T valuate sites.” Although it may not provide valuation on websites, the value takes traffic and incoming links into consideration. By default, developed sites have more of these valuable attributes, which could cause the value to increase. One could argue that the domain name ElliotsBlog.com is worth a few hundred dollars to someone else named Elliot who wants a blog. However, Valuate.com gives ElliotsBlog.com a valuation of $9,200, presumably because of the traffic and site ranking.

One way to really test its accuracy will be to rate the values of pending domain auction names before and after. This will let you see how accurate the system is – and it will also tell you if there are human filters correcting errors.

Here are some Valuate.com valuations of domain names that are up for auction this week during the Traffic show:

40.com – $62,000
900.com – $12,000
Arbitration.com – $250,000
Bands.com – $520,000
Boy.com – $620,000
CigarBars.com – $6,200
DataCenters.com – $27,000
EuropeanVacation.com – $35,000
GolfClubs.com – $410,000
Hookahs.com – $15,000
Marketers.com – $2,000
OfficeSupply.com – $110,000
Penpals.com – $22,000
QB.com – $15,000
ScubaDiver.com – $9,700
SecondMortgage.com – $140,000
SkyDiver.com – $4,100
TreasuryBonds.com – $40,000
WineCellar.com – $56,000
Zimbabwe.com – $410,000

Clearly, some of these valuations are way off. I’m no baller, but I would buy Hookahs.com, Marketers.com, QB.com, 900.com, ScubaDiver.com, SkyDiver.com, and WineCellar.com at those prices right now without even thinking about it twice.

A while back, I discussed Estibot and how I don’t think you can ever rely on the results of an automated website to get accurate domain valuations. I still agree with this, but I think Valuate.com can provide an additional sanity check when buying a domain name.

Francois recently put Domaining.com up for sale with an asking price of $3,000,000. Valuate.com only pegs the value at $110,000. As we all know, the only real way to value a domain name is by offering it for sale and seeing what someone will pay for it!

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