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Buying Domains at Bankruptcy Auctions

Elliot Silver
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14

I spent some time with someone who mentioned that his company filed for a strategic bankruptcy in the past year. Although I have recently come to know this person and his family pretty well in just the past two years, I had known of his company since I was a kid because of his company’s regional television commercials. In fact, I was joking around with him by imitating some of the lines that were frequently used in his commercials.

When we were talking about the bankruptcy, I asked him about his company’s fairly generic domain name (contained part of his brand but would have been defensibly generic since many other companies use the term). He mentioned that it sold for $3,000 in a bankruptcy auction, along with other business assets (both intellectual property and tangible equipment and goods).

After doing some research, it seems the site still gets about 2,000 visits per month and has a ton of back links. I feel the name would have been worth at least $10,000 to a domain investor based on traffic alone.   I was a bit bummed because I would have bid on the name had I known about the auction, and I could have used the site for lead generation, which probably would have yielded several hundred dollars in commissions or referrals each month. This was a very targeted business, and customers would spend thousands of dollars on services. Operating this type of business was difficult with this economy, but the leads that continue to come to the site have value – especially since the bankruptcy was fairly quiet.

Long story short is that domain investors should monitor bankruptcy auctions. Toys.com was won in a bankruptcy auction – one that most people didn’t know about at first. A few months ago, I learned of a bankruptcy auction via Google Alert for Friedmans.com and CrescentJewelers.com, two bankrupt jewelry stores whose websites at one time had significant web traffic. I didn’t place a bid on the auction, but it’s good to know about them anyway, especially if you run a jewelry business.

As more and more companies file for bankruptcy, there are bound to be good deals on domain names that people may never learn about. It’s equally important to research the company’s history and customer service situation to prevent buying a hot potato, but in some cases, the quality domain name will outweigh the risk.   Bankruptcy auctions would seem to be another source for domain acquisitions.

Get a Gravatar!

Elliot Silver
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6

Yesterday, Josh wrote a comment on my blog directed at another commenter who used the initials “JP” in his comment, “Curious who you are, I see a lot of comments on boards by ” jp ” and since I am known by JP myself I have people getting us confused so I switched to just my name. Who are you ?”

It’s a good point from Josh, but I can’t blame JP from using his initials, as he has done for quite some time when commenting on my blog. It gets confusing when people respond with just a name, moniker or initials. People may assume one person is responding when it’s someone else.

This is the primary reason for why you should sign up and get a Gravatar. Connected to your email address, a Gravatar is a small logo graphic that appears next to your name in a comment on many WordPress blogs. Gravatars are free to use and quick to make.

Take 5 minutes sometime soon and get yourself a Gravatar.

Collusion on Drop Auction Bidding

Elliot Silver
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26

During the past year, a few people have mentioned that they received emails from other bidders competing on domain auctions, although primarily involving drop auctions. The competing bidders reached out in an attempt to thwart their bidding, to keep their own acquisition cost down. Judging by the fact that I was told about this, it’s obviously not something that’s appreciated.

There are a number of reasons people reach out, most of which seem to BS. Sometimes it may be to ask the other bidder(s) to stop bidding since it’s a domain name they really want for “personal” reasons. Others may threaten that they are prepared to bid very high, so they may offer their competitor a cut to step aside – or consideration on a future auction. Some may even ask to stop competing and make a joint bid – to be partners in the domain name (a humorous idea considering the situation).

Whether these actions are illegal or just unethical aren’t for me to decide since it probably differs in each jurisdiction and to each person’s values, but there is one thing I can say for certain. It makes some people very uncomfortable to receive emails with requests such as these. Although some recipients may be too polite or politically correct to call someone out in public, it bothered a couple of people enough to mention it to me.

So… if you are involved in an auction, don’t reach out to other bidders. You may think the other guy doesn’t mind or won’t care, but I bet you are probably wrong.

Expedited Fax # at Network Solutions

Elliot Silver
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5

I recently bought a domain name from a company who hadn’t touched its domain name since the late 1990s. At the time, they were using Earthlink for Internet service, and the Registrant Contact was listed as Earthlink, while the Administrative Contact was their company contact information. The domain name was registered at Network Solutions, and although they had some control over the domain name, they didn’t have full control.

As a result of this, the owner was unable to push the domain name to my Net Sol account, and he was also unable to send me the transfer authorization code so I could transfer it to Moniker. Network Solutions required that he would have to fill out a Primary Contact Replacement form and fax it back to them to verify domain ownership.

Long story short, they said it would take either a couple or a few days to review the form and approve the change. In the life of a domain reseller – and/or anyone who has five or six figures sitting in an escrow account awaiting a domain transfer – two or three days is a long time, especially when the contact information is the only thing holding up a transaction.

After a couple of phone calls with Network Solutions, I was informed about an expedited fax number that Network Solutions has, and some type of forms are generally approved within a couple of hours instead of days. In case you ever need it, the expedited fax # I used was (570) 708-0171.

Definition of a Category Killer Domain

Elliot Silver
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15

In an article I wrote about Vino.com yesterday, I mentioned that it was a category killer domain name and a couple of people commented that it wasn’t. Just like in the National Football League, I am doing an instant replay review, and the call is overturned. Vino.com doesn’t really meet the definition of a category killer domain name, although I do think it’s a brandable and memorable wine domain name.

So… what do I think defines a category killer domain name? Well, Wikipedia says the term “category killer” is a marketing term used “to describe a product, service, brand, or company that has such a distinct sustainable competitive advantage that competing firms find it almost impossible to operate profitably in that industry.”

Similarly, in my opinion, a “category killer domain name is a domain name that creates a distinct competitive advantage for a company that is in, or that wishes to enter a specific industry, where that term defines the industry or a specific sector within the industry.” A category killer domain name gives a company a consumer marketing advantage as well as a search engine optimization edge.

Some category killer domain names discussed on my blog in the past include Bobbleheads.com, Candy.com, AmericanFlags.com, Bodybuilding.com, Cars.com, and Apartments.com.

Raise Money to Help The Water School as Domainers Climb Kilimanjaro

Elliot Silver
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0

I just received an email from Rick Latona announcing that he is raising money for his climb of Mt. Kilimanjaro in March. The money he and his group are raising will be donated to The Water School to support simple, safe, strategic, and sustainable clean water solutions to the developing world. Through their programs, TWS provides clean drinkable water using extremely inexpensive and locally available materials.

There is a fairly large group of people from the domain community who will be making the trip, and the complete list can be found on the Kili2010 website. Rick’s fundraising goal is $19,340, which amounts to $1.00 per foot that he and his group will be climbing.

You can make a donation directly on Rick’s pledge page or you can donate to one of the other climbers. My company just made a pledge to help Rick achieve his goal, and I hope you will think about doing the same.

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