Andrew Rosener, founder of MediaOptions.com, is another classic example of someone who just happened to stumble into the domain industry.  He had purchased a few domains of personal interest in the late 90’s, but it wasn’t until 2005 that he really saw the potential of domain names when he was contacted by an importer of specialty ham from Spain in order to buy several domain names he owned.  After completing that deal he immediately started looking at the domain market and trying to figure out where he could make more money.

Despite his late start, Andrew’s rise in the domain industry has been pretty remarkable, and you’ve likely noticed some of his sales at the top of the DNJournal sales charts. For instance, HX.com was the top publicly reported sale last week, and the prior week AutoInsurance.org took the top spot.

Andrew is now an active domain investor himself, but his primary business is in premium domain brokerage as well as operating one of the most popular domain investment newsletters in the business. If you haven’t signed up for it yet, I recommend you do so when you get finished reading this interview.

I’ve gotten to know Andrew over the last year, and I am always impressed by his knowledge of the domain industry and other interesting things.

ES: What’s the most frustrating aspect of your job and how do you cope?

AR: The most frustrating part of my job is the administrative work that is required in managing my newsletter and responding to hundreds of inquiries a day from domain owners who would like to submit their domains for our newsletter or brokerage service. I’m averaging around 500 emails per day at this point and it has become nearly impossible to respond to all of them, although, I try very hard to. The way I cope with this is my wife! Seriously, she has basically taken over the domain newsletter for us and since then it has grown tremendously.

ES: How has the domain business changed in just the last few years and what is your company doing to adapt?

AR: I think the most profound change that I see in the domain industry over the last few years is the type of names which are most desirable. While many people were shrugging off .net & .org domains as being of no value, I continued to invest in and broker some of the top Lead Generation keyword domains in those extensions. I picked up hundreds of premium one & two word domains which have rapidly increased in value recently. As the SEO space and Domaining has quickly merged, you are seeing a lot of domainer/developers come into the space with deep pockets, willing to invest whatever it takes to get the exact match keywords they need for their verticals.

ES: What advice would you give to someone just starting out on how to build their domain portfolio?

AR: Focus on quality, not quantity. And when I say quality, I mean names with proven value. Either they are short (2 – 5 characters) and HIGHLY brandable, or their value is directly related to specific metrics such as Exact Match Search Volume, CPC, Traffic, Revenue, etc…

ES: How does selling a domain name to a large corporation differ from selling a domain name to a domain investor? What tips can you offer domain investors who want to sell to end users?

AR: Selling to End Users is tough. Plain and simple. It requires a lot of time and you need to educate most of them on exactly how the domain will benefit their business and justify the asking price using real metrics which they understand. In my experience, to sell a mid 5 figure domain or 6 figure domain to an end user, it requires weeks or even months of discussion. Obviously, if you want to sell good names for $1,000 – $5,000 to small or medium sized businesses that can be accomplished through emails and persistence. But larger sales I would recommend you use an experienced broker, perhaps even find one who has made sales in the same industry as your domain falls.

ES: What trends are you noticing in the domain business, and how do you recommend that domain investors capitalize?

AR: I’ve never been one to follow trends. For better or worse. I have always tried to stick with what has ALWAYS worked. For me, that means domains which have clear purpose and meaning and fit within the metrics I use for valuing domain names. Or domains which I feel will have staying power no matter what changes Google makes in its search algorithm, such as 2, 3 & some 4 letter domains. But if you want to talk about trends, then I would look to Michael Berkens’ & Frank Schilling’s blog posts where they update us daily, weekly or monthly with the offers they have received on their domains. I think this is a great indicator of trends.

I’m seeing a clear trend towards short brandable domains. Names that make sense for a new startup and are easy to pronounce, spell and pass the “radio test”. My problem with buying those types of domains, is that unless I can get them for a few hundred dollars, I just don’t know how to justify the prices, they are totally ambiguous. But those guys just have a great eye for these types of names!

ES: Speaking of Domain Values, is there a specific way that you valuate domains?

AR: I get asked this question all the time by people when I have to respond to them that I am either not interested in listing their domain in my newsletter, or I’m not interested in listing it because of their asking price. The answer is YES, I have a very specific way in which I judge the value of a domain. Unfortunately, it would require a novel to describe it all, but here is the gist of it. I like, and I’ve found I’m most successful in selling, domains which have high exact match keyword search volume according to Google Adwords Keyword Tool. My valuation is directly related to the number of searches the keywords in the domain gets. High search, high value. Then I take into account the CPC or Lead Value. Let’s say the standard CPC is $1 for example. If the keyword CPC is less than that, then I devalue the domain a bit. If the CPC is significanlty higher, then I increase it’s value using a factor which I won’t disclose.

I also take into account the length of the domain and of course the extension. Unlike most people, I feel that .org has the second highest valuation after .com. I’m a big fan of .org domains (good ones) and I’ve put my money where my mouth is by investing in them. If the name is specifically for ecommerce, then yes, I prefer .net. But even then, i still don’t mind a .org.

There are a lot of people who have very different valuation methods than mine, and certainly I don’t claim to be the best by any stretch of the imagination. But what I will say is that if a seller is willing to sell a domain within the range I set using my metrics, more times than not, we sell that domain. Reason being that my metrics are justifiable. They are not ambiguous or based on “What is that domain worth to me”. The same applies on the buy side. If I purchase a domain at a price which falls in the lower end of my value range based on my metrics, I have almost always been able to sell that domain at a profit with very little effort.