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Selling a Domain Name for $1 Million

Subscribe to Elliot's BlogI was thinking about the disconnect between domain owners and end users today and trying to think of ways to bridge the gap. While it may be a bit of an unrelated tangent my mind went on, I came to a simple but accurate conclusion about selling a domain name for a lot of money.
The only way you can sell a domain name for $1 million is by walking away from $500,000. It’s a simple statement, but I believe it’s true.
Several years ago, I was playing Double Down video poker on a cruise. If you’d win a hand, the game would show 5 cards. One card would automatically flip for the player and the player had to choose the game’s card. If you win you get a certain payout, and if you lost, you would lose everything you had earned. Every time you got it right, your winnings would double. You could either double again or collect your winnings.
The long of it is that I won $1,200 by doing this several times, and when I stopped and got 3 buckets full of quarters (and a Jackpot t-shirt). Instead of thinking about how cool it was to win, I only could think about what could have been if I hadn’t stopped. A couple hours later I was playing and had winnings of $1,600 by doing the same thing – only to lose at $3,200.
Point of this is, you never know what you can ultimately get for a domain name if a buyer is motivated enough to buy it. It takes guts to turn down a $500,000 offer, but you won’t get a million dollars for your domain name if you don’t walk away from $500,000.

Apple Founder to Headline DomainFest

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Subscribe to Elliot's BlogApple co-founder Steve Wozniak will be the keynote speaker at the 2009 DomainFest Global conference which will take place January 28-30, 2009 in Hollywood, California. Wozniak, who co-founded Apple with Steve Jobs, is a dynamic speaker, and it will be good to hear him speak. I was at the 2008 DomainFest in Hollywood, and thought it was a fantastic show. I am planning to attend the show, and am now looking forward to hearing Steve Wozniak speak.
From the Press Release:
STEVE WOZNIAK, LEGENDARY ENTREPRENEUR AND CO-FOUNDER OF APPLE COMPUTER, INC., WILL HEADLINE 2009 DOMAINFEST GLOBAL EVENT IN HOLLYWOOD
Los Angeles, CA (October 16, 2008) – DomainSponsor(tm), the domain monetization division of Oversee.net, announced today that Steve Wozniak will be the keynote speaker at the third annual DOMAINfest(tm) Global event scheduled for January 28-30, 2009 in Hollywood, Calif. The Apple Computer, Inc. co-founder and Silicon Valley icon is one of the most influential and colorful innovators in technology history, and is credited with helping shape the personal computer industry with his Apple designs.
For his achievements at Apple Computer, Inc. in 1985, President Reagan awarded Wozniak the National Medal of Technology, the highest honor bestowed on America’s leading innovators. In 2000, Wozniak was inducted into the Inventors Hall of Fame and was awarded the prestigious Heinz Award for Technology, The Economy and Employment.
In recent years, Wozniak has been involved with other Apple alumni in developing a number of telecommunications and technology companies. He also is a founder of the Electronic Frontier Foundation, which confronts cutting-edge issues defending free speech, privacy, innovation, and consumer rights today. In 2006, Wozniak (also known as “The Woz”) published his autobiography, iWoz: From Computer Geek to Cult Icon.
“It’s a great honor to have Steve Wozniak join us as keynote speaker at DOMAINfest Global 2009,” Lawrence Ng, Oversee’s CEO and co-founder said. “His innovative thinking and pioneering spirit inspires all of us. Guests at DOMAINfest are sure to walk away with a renewed sense of entrepreneurial determination after listening to Steve’s insights and experiences.”
DOMAINfest Global is an annual event providing networking and educational opportunities to a wide range of professionals interested in or involved with the domain industry. Guests will include online advertising experts, domain publishers, domain monetization experts, SEO/SEM specialists, website developers, online marketers, ad or affiliate network suppliers, search advertising providers, venture capitalists, bankers, and trademark/legal advisors. Visit http://www.domainfest.com to register for DOMAINfest Global 2009 and to get more information about the event, including sponsorship and exhibitor opportunities.
To enhance networking before, during and after the January 2009 event, DOMAINfest Global now offers a web 2.0 online networking community called DOMAINfest Connect(tm). This free online community is open to anyone involved in the domain industry. Members do not need to be a registered DOMAINfest Global attendee to join DOMAINfest Connect(tm). After entering profile information, individuals can instantly find and connect with other community members who have similar personal and professional interests. For details or to join, visit http://www.domainfestconnect.com

Kentucky Domain Seizure: Ruling Delayed Until 10/16

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Subscribe to Elliot's BlogAccording to a post on Poker News Daily, the eagerly anticipated ruling on the fate of 141 gambling domain names that were seized by the state of Kentucky has been delayed until tomorrow. The delayed ruling was attributed to a computer glitch in the presiding judge’s office. This ruling could be impactful to other domain owners – not just the owners of these 141 domain names or even to owners of other gambling domain names. In one way or other, this ruling could have an impact on any domain owner.
At the hearing last week, domain owners were well represented by the Internet Commerce Association.

Follow Up: What's a Domain Really Worth?

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Subscribe to Elliot's BlogI read an interesting blog post written by Tim Berry on Entrepreneur Blog Network. Tim discusses a brief email conversation he had with the owner of SWOT.com who had cold-called him regarding the sale of the domain name. It’s interesting to see Tim’s (and his reader’s) perspectives of domain values vs. my own perspectives.   I was going to comment in his post, but it was fairly long and I decided to respond below.
Just wanted to clear up a couple of misconceptions about domain names.   Just because there isn’t a website, doesn’t mean there isn’t traffic as your reply to the domain owner would indicate – “However, you have no traffic. [Ed. note: He doesn’t. The domain is owned, but there’s no site.]” Direct navigation traffic, where people type their keyword and .com, is one of the most powerful forms of traffic.   Before CNN paid $750,000 (yes, $750,000!) for iReport.com, there was no website, but some people probably typed-in the domain name.   The name sold for such a high amount because CNN needed it and the previous owner didn’t need the money enough to sell it for less.
Domain names are virtual real estate.   I live in Manhattan, and behind my old building on 34th and 6th (Herald Square), there was a parking garage.   If a developer wanted to buy that space to put up a building for condos, he couldn’t tell the garage owner he would pay him based on a parking revenue multiple if the owner didn’t have a desire to sell.   The developer would have to do a ROI calculation to determine how much he could afford to buy the space for depending on his business plan.   The price he could afford and the price the garage owner would sell it for could be vastly different, but if the developer really wanted or needed that space, he would have to spend the money.
A real world real estate example is that of Donald Trump trying to buy Vera Coking’s home in Atlantic City.   Was her home worth what she was asking?   Probably not, but her reluctance to sell caused Donald Trump to alter his development plans.
Even in the tough economy, domain names continue to sell for record amounts of money. While virtually all other types of investments have seen pretty large decreases, domain values have continued to increase.   An unknown lawyer in Iowa owning a name like TrademarkLawyer.com would get him much more business than simply using HisName.com.
I am not in the travel or real estate business, but owning Lowell.com and Burbank.com gives me a considerable leg up.   Even before I developed them, they had significant traffic, and it has grown since developing.   Yes, some names like TropicalBirds.com wouldn’t get much direct navigation traffic on their own.   However, after owning and developing it, I’ve seen a considerable increase in traffic and return visits.   It’s much easier to remember than a cutesy web 2.0 domain name like CoolTropicalBirds.com or something like that – and I think Google prefers keyword rich domain names.
In any event, domain names are worth what someone will pay.   Knowing the market (and having a MS in Direct & Interactive Marketing), I would pay $5,000 for SWOT.com right now, so that’s the price floor.   I don’t really have a plan for the name right now, but I think it would make a great site for companies to learn how to perform a SWOT analysis. In this day and age, many brick and mortar companies face a huge weakness in that a competitor’s domain name is the industry defining domain name and it’s difficult to overcome.

Why I Don't Like the Burbank Website

Subscribe to Elliot's BlogI will be the first to admit, I don’t like how Burbank.com currently looks. I don’t believe the current site is attractive or would make people jazzed about visiting the city of Burbank, California – a great city with a ton of activities. Don’t get me wrong, the content is good, but I just don’t like how it looks. So, I am doing something about it and building a completely new website.
When I first launched Burbank.com in July, I was under the gun. Every day that I wasn’t live Google links were being lost and the site’s ranking was being impacted. The site was previously a great Burbank online newspaper, but once I purchased it, the owner redirected the links to his new site. I feared losing Google’s trust, and I didn’t want to make it difficult to regain position once the site relaunched.   It was also very close to my wedding, so with many things going on then,   I essentially built a makeshift site. There are few images on the site, and there are Adsense ads to generate a bit of incremental revenue. This isn’t the idea geowebsite, in my opinion.
After spending the past several weeks working on the new site, I am getting closer to relaunch.   I am hoping the relaunch will happen next week or the last week in October. When I do relaunch, I will write another blog post about what I did and why, to help others who may be in my position. So take a look at Burbank.com now so you can get a good before and after comparison when the new site is launched.

Cybersquatting in the Past Hurts Today

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Subscribe to Elliot's BlogOur industry still has a bad reputation from misdeeds that occurred years ago before trademark laws were actively enforced on domain owners. While there is still less obvious cybersquatting today than years ago, the industry continues to get a bad rap from people who aren’t familiar with it due to events that occurred years ago.
At a wedding this past weekend, I was speaking to a person who is the CEO of a multi-national venture capital firm. In addition to retail, financial, and oil company holdings in the US and Europe, he also owns a professional soccer team. When I told him about my business, he mentioned that he was somewhat familiar with it, having dealt with a guy who tried to sell him the .com of his full name for $20,000 (his name is not common at all, and all Google results for his name are for him). He didn’t outwardly say it, but I could tell he didn’t think domain investing is a legitimate business.
When I explain what I do to people I don’t know, I find that people either have no clue about the domain industry or they have a negative opinion about it. I frequently find myself defending our industry to people I meet, explaining that the domain names I own are generic names that don’t infringe on other brands. It’s frustrating that misdeeds in the past still affect us today.

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