Although I haven’t set a merchandise shop up for Lowell.com yet, I’ve heard that these shops can be a nice source of passive revenue, and they help build brand recognition. David Castello emailed me to let me know about a large hat sale that was made via the Nashville.com merchandise shop.
While CCIN netted a couple hundred dollars from the order of 55 hats, the greater benefit is that there will be a bunch of people receiving hats with their logo, and hopefully some of them will actually be worn by those who receive the hat! While many entrepreneurs pay big bucks for various branded tsotchkes to give away, having a shop allows people to actually brand your site for you! CafePress offers an easy to use and operate white label shop, and I plan to set mine up in the next couple of weeks.
This is one reason why having a fun logo is important to set your brand apart from other websites.
Generating Revenue While Building Your Brand
Importance of Having Cash on Hand
While it is generally a good business practice to keep an adequate amount of cash on hand to cover expenses for at least a few months, there are plenty of reasons why it is necessary to do so if you are in the domain industry. Aside from the lost opportunity of not being able to purchase a domain name that can help your business, you never know when unexpected liabilities will pop-up, and money will be needed.
A perfect example is the LH.com legal situation. While we can all assume FMA has adequate cash to pay for the defense of LH.com, smaller domain investors might not have had the cash. I would peg the re-seller/need to liquidate quickly value of LH.com in the ballpark of $300,000 (not taking the offers received or anything else other than the 2 good letters into consideration). Had a domain investor saved up and purchased LH.com as his prize investment, there is a good chance he would have been drained of his cash reserves. While he holds a high value domain name, you can’t really pay the bills with this paper worth.
Now say a UDRP is filed against the domain name. The ballpark cost for a UDRP defense is anywhere from $5,000 – $15,000 (very high) if you hire a competent domain attorney. With that said, if the UDRP defense was unsuccessful, the domain owner would be on the hook for the defense fees, and he would have lost this $300,000 hypothetical paper value. If a federal lawsuit would follow this action, as it could be the only way to recover the domain name, the cost of this could be in then tens to hundreds of thousands of dollars. While it is possible to sue for attorney’s fees, I don’t know the success rate of that.
The point of this is that we often jump on great domain deals when they come up, but as business people, we need to be mindful of the cash we have in reserve. Even though the interest rates in American banks are very low and we all assume that most of our premium domain names are fairly liquid, we need to realize that our domain names could be frozen and contested by overreaching corporate entities, and we need to be prepared to defend them.
If I Were You…
People often say you shouldn’t develop a domain name just to develop it. You should either have a passion for the topic or have knowledge about the industry, as a development project is difficult, and if you don’t enjoy that business, you are going to have regrets. While that advice may be 100% accurate, I think high value domain names need to be secured, and it appears that development may be the best way to secure them. After the recent LH.com UDRP decision, I would advise people to develop the domain names they can’t afford to lose via UDRP.
Yes, the chances of losing a name via UDRP are still arguably slim, but with each decision like the LH.com decision, it becomes easier and easier for companies to cite other similar cases when they file a UDRP for a generic domain name. I do understand the difficulty of developing all of your domain names if you have hundreds of names. I would argue that if you do have hundreds of domain names, you are probably at the greatest risk of losing your names – even if they are generic. In fact, the LH.com decision cited:
“…Respondent’s business model involves the indiscriminate acquisition and use of as many such domain names as possible. The traditional analyses of the rights to or legitimate interests element should not apply in gross when a registrant is not seeking to use any particular domain name to conduct business, is not otherwise known by that name, and has no interest in the nature of the transferor’s rights there from.“
Trust me, I know how hard it is to develop domain names. I haven’t started soliciting advertisers for Lowell.com, and as such, I am only making a few dollars from the hotel and job boards at the moment, but I know with optimization will come advertising dollars. This is a full scale business I have developed, rather than just a developed domain name. There are plenty of options out there to develop where you don’t need to spend a ton of time or money. If I had more high value domain names, I would be developing all of them quickly.
Incidentally, check out Salinas.com to see a site that was fairly quickly put together. Maybe I could generate a little more revenue if it was parked, but as it is, I have closed close to 25 hotel reservations in less than 2 months, have generated good revenue from the job board, and have a nice deal with the photographer. Once I develop the domain name more fully (in a couple of months), it will look even better.
LH.com – A Scary Decision
The decision has been reached in the LH.com UDRP filing which pitted Future Media Architects up against airline giant Lufthansa. Unfortunately for the Respondent FMA, the domain was ordered to be transferred to Lufthansa, which seems to be a terrible decision, in my opinion. How one company can claim the rights to owning a two letter domain name is beyond me. According to AcronymFinder.com, there are 38 listed meanings for the “LH” acronym, and there are countless businesses who have LH as their initials.
This case is far from over, however, as FMA filed a preemptive lawsuit against Lufthansa in case they lost the domain name via UDRP. It will be interesting to see how this case gets resolved, but as of now, Lufthansa won the first battle for LH.com.
It’s times like these that I wish the Internet Commerce Association had more support and was able to help domain registrants fight large corporate entities. At the moment, we are like a herd of deer being chased down by a hungry lion. The individual chances of one of us getting picked off by the lion are slim in a herd of hundreds of deer, but the likelihood of one deer getting killed is great.
Friends, we need to be like the Water Buffalo in this thrilling video. While the pride of Lions (and even the hungry crocodile) are trying to kill a young water buffalo, the herd returns to save him. As domain investors, we need to put individual squabbles aside and realize that a united and active group of self-protective domain owners can help stave off large corporations. The Snowe Bill was just one thing that threatens our industry. In the months ahead, we will certainly face other obstacles, and it is important that we help each other.
We are a small industry, but we wield tremendous power. Individually, it might be difficult to take on the wealthy corporate powers who want nothing more than to take generic domain names for a song. As a united group, we can stop them. It’s time to stop looking after our individual assets alone and to unify and help protect the domain investment industry.
Optimizing Lowell.com
I thought I would give an update on the progress of Lowell.com. While I launched the site publicly a couple of weeks ago, I have been working on many content updates, adjustments, and additions to optimize the site for search and to promote stickiness. In the past two weeks, the site’s ranking has grown quite a bit (probably because of the new content), but there is a long way to go until I am satisfied. I am not in a rush to generate advertising revenue, so I don’t plan on soliciting advertisers until I feel the site is ready. Although I have had inquiries, I am planning to wait until I believe the site is optimized and ready to roll.
While I haven’t been able to stick to this religiously, my goal has been to add a page of content just about every day to grow the site. It is much more manageable to build a new page a day rather than becoming overwhelmed by adding many pages at a time. Doing this also gives me time to think about different topics of interest in Lowell that might be searched to help drive traffic to the site. I used Aaron Wall’s Keyword Tool to do the keyword research, and I also used Google News results to help me find other topics of interest. Also, I used the tool to purchase a few domain names of keyword strings that were unregistered – such as FrancisCabotLowell.com, and I forwarded them to appropriate pages within the site (thanks to Rob Grant for that suggestion!)
One thing I am very much against are having user reviews on the site. Although it will presumable increase stickiness and site awareness, I don’t want to have to police user comments. If three people post a negative comment about Joe’s Steakhouse, I don’t want to be responsible for making sure the comments are legit and not Joe’s competitors. I don’t want to deal with the legal liability that a forum/review site could pose – at least not right now. Perhaps when the site has grown it will be an option, but I decided against it for now.
I recently added a news section which uses the WordPress blogging platform. I’ve been told blogs are looked upon favorably by Google, so frequent news updates should help the site with ranking. Last week when I was in Lowell, my fiancee and I were enjoying a coffee at a sidewalk coffee shop and happened to have a nice conversation with the patron at the next table. It turns out he is the band director of the city high school, and the band had just returned home from a competition they won in Virginia. Of course, that was a great story that I blogged about – complete with two YouTube videos. While I won’t become a “source” for most news articles, I will write about the happenings in the city that would be of interest to residents and visitors.
I also added two neat features using feeds from other websites. GasBuddy.com has a feature that allows me to create a page with a feed from their site to offer local gas prices in the city. On the Lowell Gas Prices page, I have the ten least expensive gas stations in Lowell listed, and this is updated daily. Additionally, I used the three day weather forecast from iBegin.com and paired that with a chart of monthly record and average temperatures on the Lowell Weather page. While I have a small weather widget on the home page, I hope to drive some traffic from people looking for weather records or a longer weather forecast for the area.
I met with city officials in Lowell, and they didn’t seem keen on the calendar I envisioned. Since they have been building a main city calendar that will be utilized by non-profits and governmental agencies, they asked me to not list those types of activities on my calendar. Their calendar will have RSS capabilities, so I will link to those instead. Additionally, I will be listing various business events – such as happy hours and live bands at local night clubs. This will enable me to link to the Lowell ticket site as well and hopefully generate revenue that way.
Whenever I visit another website (large or small), I always look for ideas that can be adapted to Lowell.com and eventually Burbank.com and Salinas.com. The goal is to drive traffic to the site, and encourage people to return by giving them a reason to come back (gas prices for example).
I will get into a revenue generation discussion more in a week, but ideally the site will be optimized before I go out and solicit business. When I was in Lowell, there was strong interest from the few business owners I met, and I told them I would be in touch. I want to make sure the product I am offering meets my standards before trying to sell it. I want to give advertisers a reason to advertise on Lowell.com other than the fact that it’s Lowell.com (which isn’t a good reason). I want to be able to say, we are #1 for the term “lowell,” #2 for “lowell restaurants”….etc. We aren’t there yet, but that’s what we are working on at the moment.
Listing Domain Names for Sale on My Blog
Due to the considerable number of inquiries about listing domain names for sale on my blog (most frequently from people I don’t know), I’ve decided to allow it. If you are interested in listing a domain name for sale on my blog in a blog post, there will be a non-refundable listing fee of $250 per domain name. This fee will include your write-up about the domain name and will include your contact information. I am not a domain broker, so there is no commission for selling your domain name on my blog.
I do maintain the right to reject any domain sales requests that aren’t appropriate for my blog (blatant trademark violations for example). For further information, drop me a note. Depending on the response to this, the fee may increase at my discretion.