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Castello Brothers to Keynote at Domain Convergence

Elliot Silver
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David & Michael CastelloThe Castello Brothers (Michael and David Castello) of the Castello Cities Internet Network will give the keynote address and host an interactive session at the 2009 Domain Convergence Conference in Toronto, Canada August 13-14.

The Castello Brothers’ keynote address will be The Future of Domaining – Building Your Brand. In addition, they will be hosting a special interactive session where audience members can submit their domain development and monetization ideas and strategies in advance for candid review and feedback during the session. “David and I are looking forward to speaking and sharing ideas with fellow domainers at the 2009 Domain Convergence Conference,” said Michael Castello, CEO of the Castello Cities Internet Network. “Some of the world’s most successful and innovative domainers are in Canada and this year’s Domain Convergence will surely be a vibrant and creative conference.”Domain Convergence

The 2009 Domain Convergence Conference is Canada’s premier annual meeting of domain name owners, developers, investors and entrepreneurs. This year it will be held August 13 and 14 at the Radisson Admiral Harbourfront Hotel in Toronto. The Early Bird admission rate of $649 (Canadian) expires on July 25th.

Quick Sunday Updates

Elliot Silver
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I read the TechCrunch article that had significant Twitter insider information, meeting notes, and other information detailing Twitter’s internal strategy. Whether or not it was the right decision to post the information isn’t something I care to discuss, but there are some interesting things to see if you haven’t read the article yet. As an entrepreneur, I was taken aback at how easily internal strategy could be shared with the world, and thought about how it must have been a stomach turning experience to learn of the violation.

I had dinner in an area of Atlanta called Glenwood Park on Friday night. All of the brick buildings look very new, and many of the retails areas don’t have businesses yet. There are lots of townhouses and apartment buildings. With a view of the downtown Atlanta skyline to boot. The first thing I did when we pulled up was see if GlenwoodPark.com was registered. Sure enough, the developers grabbed it in 2001 – nice work on their part!

Originally I was going to post my Snapnames test results in my newsletter, but I decided I would publish it on my blog since I had initially posted the article on my blog. In case you missed it this week, the follow-up article was posted on July 16. There are at least a couple of people who understand what I did, as I noticed a few names I would have bought were just purchased by others and listed on Snapnames.

It’s difficult to own more than a couple of websites that require daily updates. I frequently find myself neglecting at least one of my geodomain names for days at a time, and I always feel guilty about it after. I could put RSS feeds on the site as a way to have fresh information, but I don’t want visitors to be able to leave so quickly. I also don’t want to promote other local websites without any reciprocity.

The Dark Blue Sea situation outlined on TheDomains.com and DNW.com isn’t pretty and presumably leaves the company in a bad spot. Domain investors need to think about what will happen in the event of a buyout or other action. I really like Fabulous because of its customer service and management team (which has been depleated this past year). What happens if DBS is acquired by another domain company with different values? It’s always smart to know your options in the event a substantial change happens at your registrar or domain parking company.

I registered BullRidingHelmet.com several months ago and built a mini site – one of the first I ever built on my own (and it shows). The site doesn’t make a lot of money, but it is making a few dollars a month, whereas before I developed it, the domain made nothing with almost no traffic. The question now becomes, at what point do I take a domain name like this to the next level? I could work with AEIOU v2 to build an e-commerce site and make a larger commission. I wouldn’t do it with this particular domain name, but if you build a site that is generating Adsense revenue, there might be a point to consider upgrading to increase revenue.

Dissenting Comments

Elliot Silver
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There have been a number of comments posted on my blog where the commenter has expressed a view that either disputes something I said or opposes my viewpoint.   I want to say thank you to everyone who takes the time to express their opinions here even when they are 180 degrees from what I post.

I have been a domain investor for a few years and recently moved to domain development. As they say, I know enough about a lot of things to be dangerous 🙂 but I still don’t consider myself an expert in many areas. There are many ways to be successful online, and a lot of people have different experiences than mine. Sharing them is what makes my blog more interesting, and I appreciate all comments.

Unless a comment gets caught by my Askimet spam filter or is abusive to me or someone else, I will approve it. I don’t censor my blog comments because I don’t think it’s right to do that and it would make for an uninteresting one-way discussion if I only posted comments that were in agreement with what I wrote. Whether we agree or disagree, I like to think that I’d still go out for a coffee or meal with just about everyone who posts here. I’ve learned a lot from you, and I hope you’ve also learned a lot from others who have posted comments here.

If you write a comment and it doesn’t show up, it’s more than likely that it ended up getting blocked by Askimet, so just drop me a note to let me know. It also might be that I am busy on another project or my Blackberry doesn’t have reception. I get hundreds of spam comments a day, and some do get filtered in error. If you wrote something rude or abusive, I probably won’t post it because that’s not constructive.

Thank You, David Castello

Elliot Silver
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If you read my blog frequently, you are probably well aware that David Castello from CCIN has given me great geodomain development advice on Lowell.com and Burbank.com. As I mentioned in a previous article, David’s advice led me to add banners across the top row of the home page on my geodomains, whereas before I only had the 6 spots on the bottom right.

Not only did one advertiser just renew a six month advertising deal adter nearly backing out after 3 months, but I analyzed my hotel affiliate revenue, and much of it is coming from clicks on the rotating banners on the top row. In addition, I have been receiving many inquiries for advertising from people clicking on the “Advertise on Burbank/Lowell.com” banner in the top row. This is a marked improvement from the side rotating banners.

Without David’s advice, I don’t think the results would be as good. As revenue begins to ramp up, I am realizing that all of the effort I’ve put in is beginning to pay off, and by treating my advertisers well, they are happy to continue advertising on the site.

One thing you can take away from this is that when you develop, you don’t need to reinvent the wheel. Look at successful websites and see how they monetize. For geodomain names, you can look at other Associated Cities member websites and adapt some of the commonly seen strategies. You can also look at the local news and newspaper websites, too. Not only can you gleen strategy, but you can also see who is advertising locally!

Why I Don’t Buy Using Revenue Multiples

Elliot Silver
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Revenue MultiplesI know a number of companies and individuals that have spent a lot of money buying domain names based strictly on revenue multiples, and there are many reasons why I think this is a bad idea. I personally have never bought a name strictly based on the amount of money it generates because of the reasons I outline below. I am sure there are plenty of people who have done well buying on multiples, with the “industry standard” previously being 10 years, but I strongly believe much more money has been spent on bad buys than good ones.

1) PPC will probably continue to decline. A 10 year multiple last year is probably a 14-18 year multiple this year – if not more.

2) Revenue might be seasonal, so if you buy a winter-related domain name in the spring, the last few months of revenue will be strong, but it’s probably not indicitive of how the domain name will perform year-round. If a seasonal domain name is bought on a 10 year multiple, when you consider it could be most active just 25% of the year, the actual multiple could be 40 years rather than 10.

3) A domain name may have been a developed website before it was parked. As time goes on, the site will presumably steadily lose traffic as search engine links disappear, and the money won’t continue to be generated as strongly.

4) A developed website that generates revenue will have costs associated with that revenue, including inventory, hosting, fulfillment, website design/updates, and the time it takes manage. An affiliate-based website will have less upkeep, but there are still management issues that take time and effort.

Sure, if a generic domain name is making money, I will take the revenue into consideration and probably pay what would be a greater multiple than whatever the industry standard is. However, I don’t like the idea of buying a domain name simply based on the revenue it is generating in its current form. In my opinion, there are too many risks to buying domain names based on a revenue multiple, whatever that multiple may be. It’s too difficult to evaluate domain name values based on a fixed strategy like revenue multiples.

** I am out of town for the weekend, so comments may take extra time to be approved, and questions may go unanswered for a bit – but I will get to them of course **

Follow Up: Make 1,000% Profit

Elliot Silver
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I want to follow-up to a post I wrote a few weeks ago called “Make 1,000% Profit.” In the article, I discussed how people can analyze what names are selling at auction at Snapnames, buy names for registration fee at Moniker, and then sell them on Snapnames. The jist was that you can register a domain name for around $8.00 and sell it for $80 (give or take depending on your starting price), for a 1,000% profit.

Since I posted that article, I went out and attempted to do what I had been doing, with then intention of writing up my results here. I had done what I mentioned a few times, and I wanted to prove that it is still possible, even after I publicly wrote up what I was doing.

In any event, the results aren’t as good as the title of my article, but as you will see, I am clearly still more than happy.

Names Registered: 204
Total Spent: $1,550.40

Names Sold: 91
Net Revenue (minus sales commission): $5,849

Total Profit: $4,298.60

All in all, I earned about 3x my investment in profit, and I have over 110 domain names left to sell. One thing that surprised me is that some of the names I bought actually get traffic and some are earning PPC revenue. I suppose with domain tasting being eliminated there are more opportunities to buy names that get random bits of small traffic, but I was surprised. We aren’t talking about a lot of money, but a little bit is more than nothing and shows that there is a value to these names and the buyer presumably knows this.

All in all, I think the test was successful, and I am very happy to have made over $4,000 in profit on this. I still have several months to go to sell the rest of the domain names, but any additional sales is just gravy.

As I said in my initial post as a caveat, it’s important to be able to distinguish a similar domain name to what is selling, and you need to be able to determine someone’s (or many peoples’) buying habits to be successful at this. If you are going to try and do this, I recommend starting small and scaling.

I am sure some people will criticize me because it’s not 1,000% profit as billed. However, I am not selling anything and not making any money from anything you sell, so there’s really no reason for criticism. The first time I did this, the profit margin was greater because some of the auctions had mutliple bidders, driving the price (and profit) higher.

***

Just as a “head’s up” I am leaving for a long weekend in Atlanta later on today, so comment approvals may be a bit slower than normal.

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