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.Mobi Numbers Aren’t Pretty

Elliot Silver
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34

I read the news yesterday about Affilias buying mTLD Top-Level Domain Ltd., the company that operates the .mobi domain extension. I don’t think I’ve owned more than a couple of non-premium .mobi domain names, so I haven’t followed the market, but according to an article appearing today in paidContent:UK, the .mobi numbers look fairly ugly to me.

The article references financial records for the mTLD company that were filed at Ireland’s Companies Registration Office, although there was no link to the source of those. If accurate, it’s a pretty bleak picture:

“In 2009 mTLD had a loss of €3.5 million on a turnover of €6.4 million, compared to a loss of €324,000 the year before on turnover of €9 million. Total assets less liabilities (eg money owed to creditors) in 2009 was €1.7 million.”

The article further states that there are just about one million registered .mobi domain names out of the 187 million registered domain names.

Thanks to George Kirikos for sharing the link to the article.

Tip to Buy Domains in Private: Offer an Alternative Domain Name

Elliot Silver
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2

I want to share a quick domain acquisition tip with you that I have used in the past when I bought a domain name from an end user company who was using the domain name for its website. Although I didn’t think it was likely that they would sell the name, I made an interesting suggestion to them, which helped close the deal.

My advice is that you give them suggestions for new domain names (or cheap domain names), that they can use for their website if they sell their domain name. Depending on their situation, they may be willing to take the cash and re-brand. This is more likely to happen with a company that keeps a minimal web presence, but it probably also depends on the amount of money you are willing to offer them.

Because the deal I made is private and the domain name has already been re-sold by me, I can’t use the exact names in my situation, but I will use two examples to illustrate what you might be able to do. Let’s say you are hypothetically trying to buy ChristmasTree.com from a company called “The Christmas Tree.” In your email to The Christmas Tree, you offered them $50,000 for their domain name, but they said it’s not for sale since they use it for their website.

If TheChristmasTree.com is available to register (or listed for sale), your next move might be to suggest that domain name to them as a good alternative for their website. This might be appealing, especially for a company that doesn’t heavily rely on their website, as they can get some liquidity at the expense of a URL change.

This won’t work every time, and the success rate may be pretty low. I did it once, and the offer was enticing enough to the company. It should also be noted that they didn’t use the domain name for email, so that big complication was avoided. It’s just another tool to have in your arsenal when buying domain names in private.

Correcting an Out of Context Article

Elliot Silver
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1

As I do every morning, I received a Google news alert today with the topic of domain names. The title of the article is “Expert says very few domains are worth millions,” and it was posted on GlobalGold.co.uk, “UK’s most progressive and innovative web hosting and web-based application providers for SME business today.”

Ordinarily I don’t post links to articles I believe are written poorly, but this one happened to include my opinion as the source, and the conclusion they drew was taken from a completely unrelated article. I don’t know if the article was written as SEO bait, but it got me to read it, and unfortunately, it caused me to write this post.

The article tried to juxtapose my article about the problems impacting domain auctions with the Media Post article, How Much Are Domain Names For Campaigns Worth?, in which Laurie Sullivan wrote, “Marketing and advertising agencies looking to strengthen campaigns might pay just about any price for a solid domain name if it means building a better relationship with consumers.”

The Global Globe article referenced me by writing:

Laurie Sullivan told Media Post that the most commercially attractive web addresses can sell for millions, meaning they can be prized business assets.

However, internet entrepreneur Elliot J Silver says multi-million pound transactions are the exception to the rule, as domains generally have a much lower value.

Although I do think that million dollar domain names are a very small percentage of overall domain registrations, I don’t think that this has anything to do with domain auctions, as the article further implies (“Writing in his blog, he reported that domain auctions have suffered lately due to firms being unrealistic as to the value of their addresses.”). The article was confusing to read, and it didn’t really make sense to jump to its conclusion based on an unrelated post of mine.

My opinion on valuable domain names can be found in Website Magazine’s Web Trends for 2010 article, in which I was asked for some predictions for the new year. In that article, I said  “High-value keyword names like toys.com and candy.com, which sold this past year, will continue to command high prices. Companies will continue to invest in their own businesses and will acquire high-value keyword domains names for growth and for competitive reasons.”

This puts my opinion more in line with Sullivan’s Media Post article than the Global Gold article insinuates.

iCharge Should Buy iCharge.com

Elliot Silver
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18

TechCrunch ran an article today about a European company called iCharge which accepts credit card payments through an attachable smartphone accessory. The article compared it to Twitter founder Jack Dorsey’s company, Square, which I previously wrote about.

I am not going to analyze the company’s product or services since that isn’t my forte and I haven’t tried it out, but I would suggest they buy an important domain name for this international company. At the moment, iCharge uses iCharge.net for its Internet presence. This might not be a problem with for some companies, but inevitably, people will type in iCharge.com, which happens to be for sale via Sedo for $10,000 EUR (not an affiliate link).

When publishers such as TechCrunch refer to the company as iCharge, people will generally assume the will be found on the .com. This is especially true for multi-national companies that operate in many different markets. As a company that will rely on trust since it’s dealing with payment processing, iCharge should not give another company the opportunity to swoop in and buy iCharge.com. If that happens, they will have no control over that generic domain name.

In my opinion, the price for iCharge.com is fair, especially considering the .net company is positioning itself to become a big player in the field. Now would be the best time to buy the domain name, before the company increases its value.

Domain Name Lawyers

Elliot Silver
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31

Whether or not you’ve ever been involved in a lawsuit, had a UDRP filed against one or more of your domain names, received a cease and desist letter, or had another domain dispute situation, knowing a good attorney that is familiar with domain names and intellectual property law is critical. Likewise, when you are involved in large deals/transactions, need legal advice for your business, or need a terms of service created for a website, having a good lawyer is imperative.

There are a number of exceptional attorneys who have expert knowledge about domain names and the law regarding domain names. I have used a couple of the attorneys listed below, and I have heard good things about the others. Simply because someone is not listed doesn’t mean anything negative about that person or firm, it just means I don’t know of the firm/lawyer or forgot to add that person. You can also learn more about why it’s helpful to use a domain name lawyer in the domain investing guide.

In the event that you need legal advice in the domain space, the attorneys below may be able to help you (in alphabetical order):

“Are Geodomains Worth Less in Light of UDRP Decision?”

Elliot Silver
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9

Shortly after Mike Berkens posted his article about the Hayward.com UDRP decision going against the domain owner, I received an email asking me, “are Geodomains Worth Less in Light of the Hayward.com UDRP Decision“? In my opinion, the quick answer is that city .com names are almost certainly not worth less and some general (non-legal) feedback is below.

Just like almost every other dictionary word/term has a corresponding trademark owned by a company, geographic locations also share their meaning with companies that have marks. For instance, an apple is a fruit and a generic term, but Apple is also a trademarked brand owned by a computer company. In the case of Hayward.com, Hayward is a city in the state of California, but it is also a term used by a pool company.

If I owned Apple.com, I could certainly sell apple juice, apple pies, and apples. However, if I started selling computer parts, cell phones, or even music, Apple Computer would probably sue me or file a UDRP. Unfortunately for the owner of Hayward.com, when he parked it, the name allegedly had “links offering or leading to pages with links offering goods or services that are competitive with the goods and services offered by Complainant under its HAYWARD Trademark.”

In light of this alone, I really don’t think city .com domain name values are impacted. I can only think of a few that are parked right now, and for the most part, the parked domain names are only parked while awaiting development. I don’t think a lack of development should be construed as bad faith, although a number of UDRP cases have determined that non development and non use can be a strike against the domain owner.

In my opinion, this decision is poor since PPC pages can accidentally show advertising that may infringe on another company’s mark, but I don’t think that necessarily means it was done in bad faith. I know the owner owns other geodomain names, and I don’t believe he intended to monetize it based on another company’s trademark. I do think this case should make geodomain owners cognizant of the fact that parking can put their domain names at greater risk, but I don’t believe it impacts the value (just try buying some city .com names and see the responses you get if you send a low ball offer).

I would be remiss if I didn’t mention one thing that really bothers me in this decision. According to the discussion from the panelists:

Respondent purchased the domain name <hayward.com> for USD$20,000 and was attempting to sell it for at least USD$100,000.   These figures would seem to indicate that Respondent saw some value in this domain name for reasons other than its existence as the name of the city of Hayward, California – with a population of only about 150,000 people, according to the city’s website at http://user.govoutreach.com/hayward/faq.php?cid=10774 – and for purposes other than as a PPC parking page (which, in the normal course, would not be expected to earn a return to justify such a rich investment).

I paid a lot more than $20,000 for a smaller city .com domain name. In fact, I bought and/or sold 4 geodomain names for over $50,000 (two of them for significantly more) in the last 18 months. There is considerable value in geodomain names, especially when they are developed. My primary concern is that these UDRP panelists made an opinion that does not appear to be based on facts or public comparables.

Would I have paid $20,000 for Hayward.com for a city website? Probably. In fact, I sold a comparable California city .com domain name (just under 150,000 residents) for over $65,000. Similarly, my company owns Burbank.com and I previously turned down a cash offer of over $110,000 for it, and Burbank, California is a city with just over 100,000 residents.

I don’t see how UDRP panelists can say that the owner could not expect to return the rich investment of $20,000 for Hayward.com, and more importantly, I don’t think it’s appropriate for panelists to make valuation estimations. In this case, it seems to me that their valuation of city .com domain names is flawed.

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