Domainer Magazine can now be found on Amazon.com! Congrats to Jerry Nolte and Mike St. John for their tremendous efforts in launching Domainer Magazine and for the impact its had so far on the domain business.
Back in the 1980s when the US economy was facing tough times and the dollar was weak against Asian currency, the Japanese swooped in and purchased a tremendous amount of New York City real estate. They realized that they could buy valuable real estate at a fraction of the real value. Once the dollar rebounded in the 1990s and US investors like Donald Trump began buying it back, many Japanese real estate investors made a fortune. With the recent currency woes facing the US dollar against the Euro and Canadian dollar, I believe we may see the same thing happen to domain name assets. Foreign investors now have the advantage of stronger currencies against the the US dollar, and they can afford to go on a domain spending spree.People may counter this theory by saying that because PPC payouts are made in US dollars it wouldn’t be a good deal for foreign investors to buy domain names. Do these people think that when the Mitsubishi Estate Company of Japan bought the Rockefeller Building in New York City, rent was paid to them in Yen? I am sure rent was paid in US dollars, and they were happy to buy this US property jewel at a discount.While the Euro is strongest against the US dollar, I don’t believe Europeans will be the most active buyers. There are too many European extensions that are popular (.uk and .de for example), so they may not take full advantage of the discounted US prices.I believe the spending spree will start north of the border in Canada. Some of the most prolific domain investment companies reside in Vancouver, British Columbia. Since Canada is so close to the US and .com names are certainly common in Canada, I predict the Canadians will be the biggest buyers of domain names while the dollar is weak. For the first time in 31 years, the Canadian dollar is on par with the US dollar, and it has grown 62% since 2002. Canadians are proud that their economy seems to be outperforming the economy of their US counterparts. What better way to show their economic advantage than buying property? Instead of just a real estate boom, I foresee a virtual real estate boom, and our friends north of the border could be leading that charge.
Sahar’s post and a thread on Rick Schwartz’ Targeted Traffic Forum got me thinking about what advice I would give to someone looking to enter the domain investment business. Since I have a couple of friends who recently started out in this business as a hobby, I have a few pieces of advice that I shared with them and will publicly share.
1.) NEVER ever register domain names with famous or somewhat famous trademarks (or trademark typos). Either you will get burned or live in fear if you buy them. Not to mention that the money producing ones are registered (mostly by keyword scripts), so it would be a waste. Additionally, stay away from domain names of athletes, celebrities, politicians…etc.
2.) Read as much information about domain names and the industry as possible. It takes a gut feel to be able to do well in this business without spending a fortune on new registrations. You may end up wasting alot of time and money registering domain names that have no meaning or value to anyone but you. I have a list of valuable domain resources in my blogroll, and you can go from there.
3.) Get a feel of what’s selling in DNJournal’s weekly sales list. See previous sales prices on DNSalePrice.com. Check out what’s closing on Sedo and Afternic as it is more likely that a rookie will have access to names that don’t make DNJournal’s sales list. It might be wise to focus on a particular niche at first (like LLL.com names or financial names for example). Try to find unregistered domain names that are similar to ones that have sold.
5.) Always be honest in your business dealings. Although most business is done online in the cyber world, almost everything is traceable. No matter how many online personas you may create, you will be known for what you post and how you post it. If you are dishonest, it will probably haunt you, so don’t start off on the wrong foot. There is no such thing as “easy money.”
6.) Ask some of the more seasoned domain investors for advice. I’ve met many people who have been successful in this business, and most are very willing to give out advice. Alot of people spend hours in front of their computers focusing on various projects, and human interaction is greatly appreciated. Personally, I like speaking about domain names, and it’s great to see new people in this business finding success.
7.) Read the news, popular blogs, trade journals…etc to find and become knowledgeable about current events and new trends. Buy non-trademarked names related to those trends you spot. Never try to capitalize on a tragedy or other event no matter how much money you can make in a short period of time, unless you intend to build a “real” memorial site. Think of it this way, would you want a New York Times headline to read: “Cybersquatter John Doe Takes Advantage of Families of XXXXXXXXX Tragedy?”
8.) Don’t spend thousands of dollars on a single name until you have a plan that does not solely rely on ppc monetization. It is likely that the seller isn’t selling a high earning ppc name for less than market value, so it will be difficult to find a deal. Also, don’t buy an expensive name until you have the resources already aligned to implement your plan. As Darren Cleveland mentioned in this post, development is difficult, can be expensive, and can be time consuming. Unless you need to act immediately, hold off on buying high value names.
9.) Do your due diligence when buying a name in the aftermarket. As I said in this post, you should do a Whois history check, call previous owners and search the forums/boards for any issues. If you buy a stolen domain you may lose your money and the domain name. Aftermarket sites like Sedo are not immune from domain thieves. You should also use an escrow service like Moniker or Escrow.com for higher value transactions.
10.). Keep good records of your domain portfolio, sales, expenses and contacts. Use the contacts as leads for other domain names or even for open discussion. Track your domain names as you would track stocks in your investment portfolio. Always be honest on your taxes because the penalties could be much more than what you would gain.
Domain investing is a great hobby or profession for many people. I believe it is still the “wild west,” and as such, special precautions need to be taken when going into this business. If something seems too good to be true, it really probably is. Trust your gut, and if you need help, feel free to ask.
I have a couple of suggestions to help the .nv registry grow even bigger:
1) Incentivize owners to develop their subdomains. The more successful, developed websites there are in the .nv.com extension, the more other companies will want their own. Offering discounted web design services, long-term registration discounts or registration rebates may do the trick.
2) Open an office in Nevada and make it even easier for people to buy their subdomain names. Believe it or not, a majority of the people out there don’t know how to register a domain name – let alone manage it. If they make buying a subdomain a simple process with an easy to reach account manager, more people might sign up. Also, it would make more sense for the “Nevada Registry” to be located in Nevada.
3) Hire a staff of sales people to sell the subdomains door-to-door. Equip each of them with a laptop and wireless access to allow registrations on the fly. Set-up a sales booth at malls, fairs, or anywhere else that people may congregate in order to get the word out. The primary target audience is businesses in Nevada, but the sub-target should be citizens of Nevada.
The one downside to subdomains that I see is that doing this is a long-term commitment to this type of business plan. Once people begin buying their subdomains, it may be very difficult for the owner to change direction without litigious implications. However, if the ownership nv.com wanted to do this, it could conceivably develop NV.com into something else while maintaining the subdomains for their customers.