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Life Lesson

9

Domain investing may be a way of life, but life isn’t isn’t about domain investing.

A former marketing partner of mine when I worked at AIG passed away this morning after a short battle with pancreatic cancer. She was a wonderful woman, full of energy, and she left behind young children. This is a tragic part of life.

I spend a lot of time on the computer, doing research and trying to make deals. This is a way for me to make a living for me, but this isn’t life.Life is about spending time with the people you care about. Enjoy every minute you can. Unfortunately, life can be short. Life can be unpredictable, too. Take some extra time to enjoy the little thigs in your life.

I am writing from my Blackberry in the middle of Herald Square in New York City. I lived near here and hated this time of year. Too many tourists, too much commotion, and too many street vendors and cab horns. Right now I am just staring at all of this in awe. People are happily living their lives and enjoying the season. This is the first time I am enjoying Herald Square during the holiday season.

Take a break from doing business. Get away from the computer for a little while. Watch a movie with your loved ones. Live your life to the fullest and enjoy the meaningful things. Life can be short and unpredictable, so make the most of it while you can.

Why a Generic Domain Name is Important

2

In the process of emailing a group of friends today about figuring out plans for Friday night, I included my friend’s girlfriend. Unfortunately, I forgot to include her middle initial in the email address and ended up sending it to a nice person with the same name. An excerpt from our email this morning:

“On 11/29/07, Elliot Silver wrote:
I think we should get together for dinner on Friday before Adam’s
birthday party. Maybe Sushi Samba or somewhere in the area of the
20s-30s on the east? Are you guys up for it?”
———–

On Nov 29, 2007, at 10:55 AM, xxxxxxxxx xxxxxxxx wrote:
Sorry, you’ve got the wrong person.
———–

On 11/29/07, Elliot Silver wrote:
Two xxxxxxxxxx xxxxxxxxxx? Sorry about bothering you.
———–

On Nov 29, 2007, at 11:03 AM, xxxxxxxxx xxxxxxxx wrote:
Don’t worry about it. 🙂 I think there’s one girl in NY, possibly in a dental program, with international friends, and I keep getting her emails. Enjoy your party and dinner.
———–

On 11/29/07, Elliot Silver wrote:
Shoot… there must be a third xxxxxxxxx. The girl I was emailing dropped out of high school and doesn’t have many local friends, let alone international friends. I was emailing her out of pity.

If you are free, you are more than welcome to join us – especially if you are cute and single. The guy who is celebrating his birthday is a single Jewish doctor. Hot commodity.
———–

On Nov 29, 2007, at 11:12 AM, xxxxxxxxxx xxxxxxxx wrote:
Ha! Thanks for the invite, but I’m in Boston. Single Jewish doctor, huh? Hot commodity indeed. I may be cute, but I’m married to my own Jewish hot commodity (though not quite a doctor). 😉
———–

On 11/29/07, Elliot Silver wrote:
I love Boston. Die hard Sox and Pats fan. My brother lives in Boston.

My friend isn’t really into married ladies (even cute Jewish ones), so I guess that’s out of the question. Your hot Jewish husband commodity must be a lucky man.
———–

On 11/29/07, Elliot Silver wrote:
Wow… I just found out you aren’t my friend’s girlfriend just messing with me. I am in fact looking for the dental student, and I am sorry for bothering you.

Hope you have a nice day, and hope you see another victory parade in a few weeks!
———–

On Nov 29, 2007, at 11:33 AM, xxxxxxxx xxxxxxx wrote:
No problems. When you do find her, tell her I keep getting her emails. I can pass on that international one if she wants.

Have a good day.”

Although email addresses are very different than domain names, I believe this perfectly illustrates why one needs to have a generic domain name. Had this been a case of mistaken website instead of email, and I was looking for a type of product, I may have ordered it from a different website out of confusion. If that website provided the same or similar product with a good customer experience, they may have turned my one time mistake into a new customer.

As I’ve said many times, a generic domain name is worth much more than a brandable domain name for much more important reasons than PPC advertising. People instinctively use the generic domain name, and if that website offers what they want, they will usually have no problem using the new provider.

My apologies to the other person I inadvertently emailed!

DomainersChoiceAwards.com Goes Live

2

DomainersChoiceAwards.com  has gone live, and it is now up to the domain investment community to choose the best of the best. The first round of write-in voting has started, and it is up to you to decide who is deserving of the Domainers Choice Awards in categories including, Domain Ambassador, Industry Spokesperson, Industry Achievement, and many more.

Donna Mahony  is the brains behind this, and I know its going to be one of the most popular features at  DomainFest.

If you are interested in helping to sponsor the Awards, please visit the Sponsor Sign-up page on the website.  A portion of the proceeds will be donated to the  Domainers Choice Scholarship Fund,  a new organization that Donna is starting.

Register Domain Names for Charity

8

Below are a few unregistered domain names I believe have some potential. Although I am not charging anything for researching these names, I am requesting that the person who registers each makes a donation to a non-profit organization.

AftermarketSite.com  
OldAgePlanning.com
GeriatricPlanning.com
Rescuing.mobi
AssistVeterans.com
SoldierCounseling.com
AgreementTemplates.com
HandheldCovers.com
OnlineStripteases.com
RemoveRubbish.com

Three new additions – 2:30 update:  
CheapestGadget.com
CheapestDevice.com
ForeignLodging.com

A few non-profits I recommend (with the link to make a donation):

At this point, I usually recommend about 10 charities I think make a positive impact on the world. This time, I am requesting that readers make a donation to a single cause. One of my blog readers sent me this tragic story, and I am asking that anyone who buys one of the names above, makes a donation to the family of this tragedy to help them through this difficult time.

Please send donations to:
The Cain Family
183 Wayne Street
Mount Airy, NC 27030

Charities Previously Helped By Generous Readers of My Blog:

The Elizabeth Glaser Pediatric AIDS Foundation
Simon Wiesenthal Center
Dana Farber Cancer Institute
ALS AssociationCystic Fibrosis Foundation
National Multiple Sclerosis Society

Kiva

VirginiaMortgages.com – On Sale

0

I am looking to raise some capital for a domain purchase.  I am selling the following state specific domain names:
VirginiaMortgages.com
Price: $15,000

WashingtonDoctors.com
WashingtonDoctor.com

Pair Price: $9,500

New JerseyDoctor.com
Price: $4,500  

3 Doctor Names as a set: $12,000

All 4 Names: $24,000

Why You Shouldn’t Use Revenue Multiples

3

I think Michael Gilmour has one of the sharpest minds in the domain business, but I am going to play devil’s advocate to his post today about buying based on revenue multiples. In today’s post, Michael provides some guidelines about what someone might expect to pay based on the type of name they are buying:

“I’m really going to stick my neck out here and state some revenue multiple ranges for different types of domains. For the purposes of this example let’s imagine that roysfood.com has a trademark and is a small business in Utah.

Type of domain Example No. Months
Direct TM infringing from heavy TM defending company microsoftword.com 0-3
Direct TM infringing from non-defending company roysfood.com 6-12
TM typo of heavy defending company micorsaft.com 3-9
TM typo of non-defending company rosyfod.com 12-18
Typo of a generic multi-word domainperking.com 36-48
Typo of a generic single-word domain.com 48-60
Generic multi-word domainparking.com 60-72
Generic single-word domain.com 72+”

In my time in the domain business, I have never purchased a name nor have I sold a name based on any type of revenue multiple. Incidentally, I had a long conversation with a successful domain investor today about this, and I believe that buying or selling based on a revenue is very risky and shouldn’t be done by anyone but a domain expert and/or domain actuary.

Reasons why I think you shouldn’t buy (or sell) based on a revenue multiple:

  1. It’s very difficult to determine how much a name can earn based on different parking companies, different revenue shares, different landing pages…etc. Whose revenue do you use for the multiple? Do you count on someone else’s revenue share which might be considerably higher than yours? It would be in the buyer’s best interest to have revenue be as low as possible during a traffic test. Likewise, it’s in the seller’s best interest to earn as much money as possible while the domain name is being tested. If the buyer can’t replicate the exact conditions the seller had when he was selling, the buyer may never see anything close to the quoted revenues.
  2. If the name is dependent upon search engine placement, what happens if Google/Yahoo update their algorithm, causing traffic (and consequently revenue) to plunge? The buyer could be screwed in this situation. This is especially difficult if the new owner changes DNS or does something that could catch the attention of search engines. Even a change in the Whois or registrar could possibly impact it. The reality of the situation is that the search engines are powerful and mysterious. We don’t know exactly how they work, but we hope things we do can help boost rankings.
  3. How does a buyer know if the traffic is “real” or if the seller is asking his buddies to do a little clicking on the PPC ads. What happens if/when the traffic dies? Hypothetically, a domain name that earns an extra $1.00 per day is worth around $3,000 more on a ten year revenue multiple.

Maybe I am wrong, but I don’t think there are many people out there willing to sell their revenue producing generic domain names simply based on a 72 month revenue multiple as suggested by Michael, or even a 120 month multiple. If there are, I would be suspicious, just because it sounds like it could be too good to be true.

As I said in my post about the Art of Pricing a Domain Name, the most important factors for me in determining a price to sell and to buy are the following:

1) Traffic the name receives
2) Revenue the name receives
3) Google listings for the “bracketed term”
4) Advertisers on Google
5) Comps of recent sales
6) Gut feel

Revenue is certainly important, but no way would I buy only based on a revenue multiple. It’s good to know what kind of revenue potential the domain name has based on what people are looking for when they navigate to the site, but it’s not close to being the main factor.

To me, buying or selling a domain name simply based on a revenue multiple is a losing proposition for both parties.

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