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Special Offers from eDirectory

Elliot Silver
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7

eDirectoryI know a number of people that either use eDirectory on their websites or have considered using eDirectory, and I wanted to let you know about a special offer I just received in case you are thinking about using them in the future. I am not being paid or compensated to post this (nor have I even been asked to do it), but I know that the cost has been one primary reason why some people have been reluctant to use the products, and these special offers may be beneficial to people who read my blog:

The following three offers are valid during November and December. There may be some exceptions and exemptions, that I am unaware of, so you should email Owen Zhu with questions.

November:
– 20% discount off your purchase
– Free 30 minute private business consultation with our Marketing Director, Jared Elder
– Code: November2009 (Expires November 20th, 2009)

December Part I
– 15% discount off your purchase
– Free 23 page, “How to Monetize your Directory” booklet. $400 value.
– Code: December2009 (Expires December 10th, 2009)

December Part II
– 10% discount off your purchase
– Code: December10 (Expires December 31st, 2009)

Can Development Decrease the Value of a Domain Name?

Elliot Silver
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25

My friend Mike is in the middle of building out my newest domain acquisition, and I am getting psyched to launch the website in the coming weeks. I am not ready to reveal the name publicly yet, but I am sure some people might think it’s not great, while others will agree with my opinion that it’s a great name with an obviously workable business plan. I am excited to share – but just not yet.

Within a couple of days after I bought the domain name, I began receiving inquiries. In fact, I received an email from the owner of a similar domain name, just in a country code extension. I told him the domain name is not for sale, and that I am in the process of building it out. He also sent me a Twitter message, and I replied the same.

Last week, I put up a coming soon page with the new logo I had created. In the past week, I have received two additional inquires about this domain name. I receive unsolicited inquiries for my geodomain names on a frequent basis, but I don’t recall getting three for the same one in less than a week. The most recent one was received this morning, and after I said no, I received a follow up asking me if there’s any price at which I’d sell it. Of course, the answer is yes, but that’s simply because everything has a price.

So, that leads me to the question, “can developing a domain name decrease its value?” Would it be possible to make a domain name worth less with true development? Of course if its the source of major spam, spyware, or other thing of the sort, it could potentially have less value, but that wouldn’t be the case here.

I really believe I have a great domain name, solid business plan, and a solid marketing plan that is fairly aggressive but wouldn’t really require additional work from me because I am involved with it almost every day. But the question remains, could my developing this domain name diminish its value?

I also think there are two things at play here.

1) Can the actual developed website hurt its value?

2) Can development make it less likely that a company will want to make an inquiry about a potential sale?

Development: A Domain Investors’ Dilemma

Elliot Silver
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6

This might sound strange coming from me, but as a domain investor, domain development often brings up a dilemma for me. In order to generate the majority of my revenue, I rely on the sale of domain names that were usually recently acquired. I buy domain names at great prices, and I sell them for fair prices in the aftermarket.

Most of my acquisitions would be considered “ripe for development,” and most people could immediately imagine what should be developed on these domain name. For example, I recently sold MountainBikers.com and CDStore.com, and it’s fairly obvious what type of content should be on those sites.

For the most part, I look at a majority of my domain names as pure investments. Aside from a vested financial interest, I have very little interest in being the developer. I buy them specifically as investments and hope to re-sell them at a profit without adding content. However, there are times when I do want to develop a website on a particular domain name, and that leads to internal business conflict.

When I buy a $10,000 domain name and hope to sell it quickly, the $10,000 investment is in the form of a salable asset, which hopefully will be converted back to $10,000 + profit in short order. When I keep a $10,000 domain name for development, that $10,000 is no longer liquid. I can’t pay my bills with a domain name. I also feel added pressure because my bank account holds $10,000 less. Additionally, I need to spend time and money researching and building a website.

I am counting on building a revenue generating website on that $10,000 domain name, which would not only earn more from advertising along the way, but it will also increase the value of that asset. As most people can tell you though, development isn’t easy, and there’s no guarantee that the domain name will earn more in advertising revenue than you would had you kept the money in the bank and were earning interest.

Holding domain names right now is smart due to the economy, but because of my business model, I need to be selling to pay most of my bills. Whenever I get a domain name I have a particular interest in developing, I always have to think twice about whether it’s worth putting that investment funding on the sidelines. In some case it’s not, but in some cases it sure is.

I just acquired another domain name in the aftermarket after some internal (and external) debate, and I hope to be able to share the finished product in a few weeks. In the meantime, I will feel added pressure from taking some liquidity out of the business for a period of time while developing, but I think it will pay off.

You’ve Got to Know When to Hold ‘Em, Know When to Fold ‘Em

Elliot Silver
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14

“You got to know when to hold ’em, know when to fold ’em.
Know when to walk away, know when to run.
You never count your money, when you’re sittin’ at the table.
There’ll be time enough for countin’, when the dealin’s done.”

I saw Rick Latona’s post today about his company exiting the mini site space, and I immediately thought of Kenny Rogers’ 1978 song, The Gambler. Rick’s company, AEIOU.com, has decided to exit the mini site development space, citing the lack of profitability, “The reality is there is no money in web design.” Although I disagree with what Rick said about web design because I know people who do quite well, I believe he has much bigger fish to fry, and I can commiserate with that decision.

I spent some time building my own mini sites, and although it’s enjoyable to see a project completed on a good domain name I own, the reality is that they often aren’t worth my time and effort. Like Rick, I have bigger fish to fry. When I have started new mini site projects, friends have told me I should focus my efforts on my bigger projects (Torah.com, Burbank.com, Lowell.com…etc), but for me, it was more of a learning experience than anything.

The mini sites I built are earning more money than when they were parked, and instead of having them sit idly, they have pages indexed in Google. However, in retrospect, they weren’t really worth my time and effort, since that time could have been better spent doing other things that are more profitable (researching, buying, and selling domain names for example). Chalk it up to a learning experience I can have as a full time domain investor.

Anyhow, like the Kenny Rogers song, it’s important to know when you’re taking time away from profitable endeavors and doing something that isn’t going to help your bottom line, it’s time to throw in the towel. I’ve pretty much thrown in the towel on developing mini sites on my own to save money, and there would have to be a compelling reason to do another one since my lesson has been learned.

To Buy & Develop or Not…

Elliot Silver
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20

I have an opportunity to buy a great domain name that is the name of an industry and profession (not Internet-services related). I am around these types of people often, and there is an abundance of them in my area, as well as throughout the country. Many of them advertise on a variety of websites, including their own, but there is no industry leader.

The domain name is expensive, and the price I pay would probably be considered more of an “end user” price. However, I would not be overpaying by so much that I couldn’t recoup the investment should my business plan not go as well as I believe it can. In other words, it might sell for a loss if I had to liquidate it.

The problem is that I have several projects on my plate right now (including the blog), and I am not sure the smartest move would be to outlay a handsome sum of cash to acquire the domain name and create another project for myself. There are competing websites that do what I would like to do, showing that there’s a market – but also showing that there’s competition.

Decisions, decisions… What would you do?

Rick is Right About Development

Elliot Silver
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11

When it comes to development, Rick made a good point yesterday. One of my biggest obstacles when it comes to development is myself. With domain sales down for me, I have been spreading myself thinly in an effort to build revenue generating businesses on my domain names.

  • In the last two years, my company has built Lowell.com, Burbank.com, and Newburyport.com into full-fledged businesses, which require frequent updates, client meetings, sales calls, and time devoted to city research.
  • I have my domain blog, which I update every day with news, advice, and commentary. This takes a considerable amount of time, but it’s a good outlet to share and learn.
  • I am in the process of building out Torah.com into a fully operational website, which will have a whole host of features that one would expect to find on a website of this nature.
  • I have a bunch of mini sites, which don’t take a whole lot of time to manage, but they do take some time adding content, testing layouts, researching topics…etc.
  • I spend time acquiring good domain names and looking to make deals to sell other domain names.

I find myself going in circles sometimes because it’s not easy to manage all of this. Building businesses takes time and effort, and I am finding myself having less time to do the things I enjoy. There is a fine balance between spending the right amount of time building a solid business and spending too much time getting few things done.

I completely disagree with Rick about his belief regarding search engine traffic, and I can’t understand how his domain names would lose traffic with mini-sites, because one would imagine the type-in traffic would at least stay consistent, however, that’s a topic for another day.

If you are a domain investor, you need to figure out what you want to do with your domain names before you do it, especially if they may be difficult to re-sell quickly. If you are planning to develop them into a business, it might be best to focus on one and make it into the best business possible before you start another project. Staying focused on one project is difficult, especially when you are working alone.

Take it from me, buying and selling great domain names isn’t difficult. Building a business on a domain name is a completely different story, and while I don’t regret any decisions I’ve made, I am finding it much more difficult to gain traction with some of my projects, since I can’t always focus on one project at a time.

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