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Use a Domain Contract for Domain Sales

Elliot Silver
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Subscribe to Elliot's BlogFor a variety of reasons, I think it’s important that domain buyers and sellers use contracts when moving forward with a domain sale. It’s probably more important for the buyer to have an agreement, but both buyers and seller should use one – even if the escrow service you choose to use has an agreement, as I don’t believe it covers anything related to the actual domain name.
Like many other domain investors I know, I sometimes am lazy about getting a domain agreement, especially on a lower value deal. When dealing with non-domain investors, submitting a contract for review can be a hurdle, as many people are leery of a contract, and some will want to have a legal review done by their attorney, which can take some additional time and add additional costs to one or both parties.
When dealing with domain names that might not be considered completely generic, I strong recommend using a domain contract to add an extra layer of protection. Any domain or contract attorney can probably provide one to you at little cost, which can be used as a template for all of your purchases and sales going forward.
Some things you may want included in the contract include:
Terms of Sale
No Legal Problems with Domain
Any Encumbrances on Domain
Non Disclosure Agreement

Tucows Stripped of WADND Registrar Seal of Approval

Elliot Silver
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Subscribe to Elliot's BlogIn an email sent by Rick Schwartz today, World Association of Domain Name Developers Inc. announced that Tucows has been stropped of the WADND Registrar Seal of Approval that was awarded on October 22, 2007. To receive this seal of approval, a registrar has to meet the following criteria set forth on the WADND website:
1. Registrar must agree to cooperate with all other Registrars when a domain is claimed to be hijacked.
2. Registrar must have 24-hour Hot Line for reporting stolen domains or other registration problems.
3. Registrar must delay transfer, or double-check authenticity of purchaser when transfering a domain to a Registrar who knowingly harbors hi-jacked domains.
4. Registrar must have “Executive Lock” in place that can only be removed by direct communication with Registrant.
5. Registrar must have a minimum of one million (1,000,000) domains registered.
6. Registrar must provide sufficiently direct means to unlock domain locks, so as to not unduly deny a legitimate transfer request from a verified domain name registrant.
7. Registrar must collect emergency contact information from registrants, other registrars and resellers to respond to an urgent restoration of a hi-jacked domain.
8. Registrar must define and make clear the emergency procedures which can be instituted in events where emergency contacts are not available.
9. Registrar must provide clear and readily accessible information to registrants regarding domain locking and domain name protection measures offered by Registrar.
Below is the press release distributed today:

The majority of non-obstaining Board of Advisors from the World Association of Domain Name Developers Inc. has voted to revoke the WADND Registrar Seal of Approval awarded to Tucows.com. Tucows has continually chosen stockholder interests over domainer interests. The latest plan, selling expired domains they kept from their own customers for failing to timely renew.
http://www.thedomains.com/2008/10/29/tucows-now-selling-the-expired-domains-they-kept-from-their-customers/
http://www.thedomains.com/2008/10/31/tucows-responds-to-yummydomainscom/
http://www.whizzbangsblog.com/index.php/20081110486/MyBlog/Conflicts-between-customers-and-registrars.html
And earlier this year:
http://www.thedomains.com/2008/06/21/ethics-of-domain-drop-auctions-tdnam-and-namejet-called-out-yesterday-today-we-call-out-tucows/
http://www.thedomains.com/2008/06/25/tucows-response-to-our-post-not-good-enough-and-heres-why/

ChainCatshark.com: A New Site is Born

Elliot Silver
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Subscribe to Elliot's BlogSteven Kennedy’s development story motivated me to build a site on my own to show just how simple it is – even for someone without much development skill (like myself). I wanted to find an animal-related domain name that wasn’t registered, as the point of my experiment is to start from absolute scratch. I did some research focusing on sea-life and sea creatures, and I honed in on species of sharks.
After doing some research, I learned about the Chain Catshark, and I saw that Aaron Wall’s keyword tool showed 65 daily Google searches and 93 total daily searches. There were also just a few thousand sites indexed in Google that even mentioned the Chain Catshark. I saw that ChainCatshark.com was unregistered, and I went to work at around 4:30 in the afternoon.
I found a site for free web templates, and I downloaded one of the templates I thought would look nice. The only requirement they have is a link in the footer. I then found a GNU free to use image on Wikipedia, and I began to play around with the template. I wanted the template to look as customized as I could with my limited technical expertise, and it was fairly easy to do with Dreamweaver.  
After adding Adsense spots and making color and font changes, I began to do some research on the Catshark, Chain Catshark habitat, Chain Catshark food, and other Chain Catshark information. I used several reliable internet resources for my information in order to provide visitors with the content they are looking to find. I created individual pages for several topics related to Chain Catsharks and wrote small articles for each.
Overall, the entire project (research to development) took just under 4 hours of time. Hypothetically, if I paid myself $100/hour, I will need this site to make $.15/day consistently to profit on an 8 year revenue multiple – basically less than 1 click per day. If I was able to do 2 of these a day (I won’t – I would rather work on Burbank.com or Torah.com), I could probably sell these sites for a nice return down the road.
While I don’t expect to make a lot of money from the site or others like it, I do want to show that you can make money by registering new names without having to hope that someone randomly makes an offer on the name before it expires. If you have a passion for something and buy a domain name related to that interest, learn how to build a small website and spend an afternoon developing. You probably won’t get rich, but you will learn how to use html in a low risk setting. I should also add that it’s nice to be able to mess around like this – being my own boss is great. 🙂
***I am headed to another wedding in a couple of hours, so I won’t be approving comments until I return.

Domain Investor to Domain Developer

Elliot Silver
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Subscribe to Elliot's BlogWhile I haven’t stopped domain investing by any stretch, I have been spending quite a bit of time on development. From Tropical Birds, to Lowell, to Burbank, and soon to Torah, I’ve been learning as much as I can about development. Even with my severe lack of technical and programming knowledge, I’ve been able to learn enough to tread water with the help of my developer, a few friends, and Dreamweaver.
The purpose of development is to drive traffic to the website with compelling content, and either sell ad space or use Adsense to generate revenue. A parked domain name can be great if the domain name receives traffic. It’s a very low maintenence way to generate revenue from a domain name, and it’s perfect for someone with hundreds of domain names. However, if and when possible, I am a firm believer that development is critical.
A friend of mine, Steven Kennedy, is also a domain investor with some great domain names in his portfolio. Recently he decided to spend a day building out one of his domain names, SpiderMonkeys.com. Steven did a considerable amount of research on spider monkeys for his articles, and he used xsitepro2 (a web design program) and xheader (a header creation program) to build the custom site. Steven is monetizing it with Adsense banners. In my opinion, the site looks top quality, and it only took a day to create.
Not only will Steven be able to retain the visitors who type-in his domain name, but he will attract new visitors through search engine results.   Google and Yahoo like content. With a little bit of link building, some additional keyword research, a bit of SEO work, and time, Steven will have a website that receives much more traffic and hopefully additonal revenue. It took him a day to do this, and it’s something everyone can do.

President-Elect Barack Obama Gets It

Elliot Silver
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Subscribe to Elliot's BlogLooks like President Elect Barack Obama knows the importance of keyword domain names: http://www.change.gov.

Trend Domaning Can Be Costly

Elliot Silver
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Subscribe to Elliot's BlogI will caveat this post by saying that I do occasionally buy domain names based on emerging trends once in a while, although I never buy domains related to brands, people, or other potential trademarks. However, I generally think buying based on trends is a way to lose your investment quickly, especially when you are frequently speculating on trends and/or buying dozens of trend-related domain names.
Based on my experience, it seems that most people who buy domain names based on new trends are looking to make money quickly. You can tell this is the case by viewing lists of newly registered domain names for sale on forums and on Ebay that are related to what’s going on in the US or world (Obama domains, anyone?).   When you do a Whois search for various terms related to trends, many have for sale notices or show that the DNS is set to Sedo or other domain sales venue. Most people who buy based on trends do it to make money fast.
While buying a domain name to sell quickly isn’t a bad thing, it’s very hit or miss. There literally could be hundreds of variations of domain names (not even including the various extensions) based on certain trends, and maybe a few of them will have value. While buying 5-10 domain names isn’t a big deal, I know quite a few people who buy dozens or hundreds of related domain names so they don’t miss out on the big one, and that can be expensive – especially if this is done for a few trends.
I think this is a very flawed strategy. If you buy one or two domain names based on every trend of interest (with the sole intent being to sell it), chances are good you won’t get the domain name that has considerable value. If you buy dozens or more, you are better served doing keyword research and spending $300 – $2,000 on a single good domain name. Shoot – NNNN.com names seem to be selling for anywhere from $250 – mid $xx,xxx, so why not try to buy a couple of these (I do not currently own a single numeric domain name).
I’ve had many people email me lists of names – literally hundreds of hand registered names – asking me what I think they are worth.   I hate to say it, but most aren’t worth anything short term unless someone in the business wants it – or unless they are receiving traffic and good conversions.   It really bothers me when I see someone who is new to the industry investing $5,000 on domain names hoping to get rich quickly, when a smarter investment would have been to buy 1 or 2 strong domain names in the aftermarket to sell or build.
Just like I wouldn’t go out and spend $2,000 on lottery tickets (although I would spend that in a blackjack session), I wouldn’t go out and try to catch a trend by registering dozens of trend domain names. If you do that a few times, you will probably lose your shirt and be out of the domain industry quickly.

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