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Bigger Isn't Better

Elliot Silver
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Of course I am referring to the size of your domain portfolio. Some people may think that because they have 1,000, 5,000, 10,000 or 20,000 domain names, they are better off than others. I really couldn’t disagree any more, unless you happen to have an unbelievable portfolio (meaning you spent many sleepless nights over the past several years researching and cashing in on money making domain names).
I saw a post where people were asked how many domain names they own, and I was pretty surprised at the amount of people who owned hundreds of domain names. Additionally, I’ve received emails from many people who have asked me to appraise their domain names, and they’ve sent a list of hundreds of mediocre domain names to evaluate. I really believe a person can go broke quickly by registering hundreds of new domain names. Technology and data mining scripts have gotten to the point where it is nearly impossible to hand register domain names that will pay for themselves in PPC revenue, unless a trend or event happens that makes the names relevant. I would like to suggest that people focus on quality and not quantity.
One trend I’ve noticed is that some people believe that because they have an entire portfolio of hundreds of similar names, the set has more value. For example, if someone owns 12345Golf.com, 12345Shopping.com, 12345Travel.com, 12345Sex.com…etc, the names aren’t more valuable simply because almost every 12345 domain name is owned by them. Unless someone else wants to build a huge network of websites using that idea (doubtful), the set is a $7.50 X x,xxx annual drain. One thing to think about is why would someone pay your premium, when they could come up with an idea that is similar and hand register the set (123456 for example).
There is nothing wrong with owning a large portfolio of domain names if you are generating enough revenue to support it, or if you are making enough profit in sales that you can incur the renewal costs with no problem. However, I have seen people become overwhelmed with renewal fees, and it can be difficult to watch some domain names drop because of it.
My advice is to keep your portfolio as trim as your budget will allow. Instead of buying dozens of new registrations, it might make more sense to buy one quality name.

WashingtonVC Startup Receives $6m Investment

Elliot Silver
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Just received a note from Mike Mann announcing that Yield Software, a company conceived and incubated by Mike and his WashingtonVC company, raised $6 million in Series B funding. This investment was led by Draper Fisher Jurvetson and includes WPP Group, joining WashingtonVC. When I finished graduate school, my career started at Wunderman, a Direct Marketing Agency owned by WPP.
WPP is a leading marketing, advertising, interactive, and branding holding company, and they typically only invest in the best of breed. This is a big day for Mike and the folks at WashingtonVC, and congratulations are in order.
The full press release can be seen on Business Wire.

Big Week in Domain Aftermarket

Elliot Silver
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According to the weekly sales report distributed by DNJournal, last week saw some fairly strong deals. There were a few six figure deals, including the sale of Coffee.org, and the drop auction market was hot once again with some strong names fetching decent amounts. The real winner of the week was over at NameMedia.

Not only did NameMedia Senior VP Pete Lamson report to DNJournal that the company had a record first quarter, but May was also recorded as the best sales month in the company’s history. NameMedia’s Afternic DLS also closed 15 LLL.com domain names for $40,000/each last week.   Personally, I don’t own any LLL.com domain names by choice, but I think the purchase shows that the market for these types of domain names are as strong as ever, even with the risk seeming to grow.
Interestingly enough, I had been in contact with Bigfoot about acquiring Let.com from them about 15 months ago, and they were only asking $50,000 for it at that time. It appears they have since sold the name, which is perplexing given the fact that they just jumped in feet first with the purchase of 15 LLL.com names at retail price. I do think it is a good sign for owners of LLL.com names though who are looking to sell their names.
Numeric domain names appear to be hot commodities as well. Because of their relative short supply coupled with the number of uses for these names throughout the world, they always seem to fetch strong prices. I like the fact that numbers transcend languages and are important in many cultures. It is important to research what numbers mean in other countries though! I owned a few numeric names a while ago, and one of them happened to have something to do with death. I sold it ASAP.
It does look like the aftermarket is fairly strong compared to the general economy. I have been and continue to be a buyer both for resale and for development. Hopefully these trends will continue through the summer.

Celebrity Baby Domain Names

Elliot Silver
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A couple of weeks ago, I offered a few Celebrity Baby domain names for sale.
SOLD

TRAFFIC – New York City

Elliot Silver
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Tickets to the New York City TRAFFIC show are now available for purchase. The show will run from September 23-26. Unlike last year where the show was in midtown Manhattan, the show will be held just over the bridge in Brooklyn at the Brooklyn Bridge Marriott. The early bid special, running through June 15th, is for $1,495, and then it jumps to $1,795 through August 15th, and finally to the full price of $1,995. The special hotel rate is $299/night.
I’ve heard a couple of grumblings that the show will be in Brooklyn instead of Manhattan, but I think that’s silly. I am the one that’s going to have to jump on the C train at who knows what hour (or pay for a car service) to get to Manhattan! This is probably designed as a cost savings move, as the cost of transportation to/from the venue from the airport is much less, hotel rooms are more affordable, restaurants are less expensive, and you are still a stone’s throw from Manhattan in Brooklyn.
If you have been thinking about attending a pure domain conference, this is one you won’t want to miss.

Responding to Geodomain Discussion

Elliot Silver
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I was going to write this response to Sahar on his blog, but I decided to just post it here since it encompasses more than one post. I have a great deal of respect for Sahar and some of the things he has done in the domain industry. Seeing Sahar build some of his domain names into business has helped spark my interest in development, and I believe he has been instrumental in getting domain investors to begin to develop their valuable domain names. However, I disagree and am a bit confused by some of the things he has recently said.
Before I begin, I want to define what I am referencing when I speak of geodomains that are worth a considerable amount of money, and what I blog about (unless previously specified).

1) .com only
2) City with 100,000 population, a large tourism industry, a center of business activity, or a US state
3) Domain name must be the exact spelling of the city

There are plenty of other geodomains, but these are generally what I consider geodomains when I talk about the industry in general.A few weeks ago, Sahar provocatively wrote a blog post entitled “Are Geo Domains Overrated?” He evaluated his thoughts on what to do with geodomains other than PPC, and the answer is either development or resale. The gist of the discussion on development is that it is very difficult (and I agree), and regarding resale, Sahar said, “To me looking for end users is an extremely tough proposition. I would not consider that a viable option.” Ultimately, Sahar’s concludes, “It is my personal opinion that while today Geo domains aren’t an attractive proposition (and we do own a few), in the near future, possibly 2-5 years, they may be.”
To address this topic, I agree that geodomains should be developed to yield their full value. They are expensive to acquire, and if the owner wants to generate revenue, development is the way to go. I do disagree that looking to sell the domain name is difficult, as I have received significant offers on Burbank.com – which I have rejected in favor of development. I know it wouldn’t be difficult to sell this name or Lowell.com, based on the response I’ve received in the Lowell area when speaking about the domain name and website.
A few days ago, Sahar wrote another post about geodomains titled, “The Other Side of Geo.” Sahar cites my blog and Rick Latona’s newsletter as sources of geodomain discussion, in addition to Associated Cities and Castello Cities press. Sahar believes, “majority of the people who promote Geo domains are doing so not because Geo is doing great but because they are invested in Geo.”
I am a bit insulted by this in respect to the reference to my blog. I talk about geodomains because I happen to be developing two of them, not because I need to increase their value or increase recognition. If anything, I would like the value to decrease so I can buy more of them – as I have tried with my $100k offer for a large east coast city .com domain name. I paid what I was comfortable with paying, and I would pay the same price in a heartbeat without so much as a second to contemplate it – as I am sure many others would agree. Also, geodomains are hot and in demand because supply is very limited for decent ones – because most good geo domain owners won’t sell it.
Additionally, Sahar wrote what most people would agree, “In terms of cashflow performance, in comparison to other domain categories, Geo domains are extremely over rated.” Yes, I agree that Lowell.com would only make $2-3/day in Adsense revenue, but I am making more in hotel/job revenue, and the traffic and revenues continues to grow. When I finish with Burbank.com, that will make even more money in hotel revenue, as that is more of a business/tourist center than Lowell, Massachusetts.
Today, Sahar followed all of this up by concluding, “Truth is, after thinking more about it, Geo domains, in term of Domaining, are extremely overrated.” Although I don’t own any parked geodomains to offer a factual assessment, I do agree that geodomains aren’t a great investment vehicle if you plan to only use a PPC model on them. However, saying   that they are overrated in terms of domaining is like saying that undeveloped oceanfront property on A1A in Palm Beach, Florida is overrated.
For those who know the area, this is some of the most exclusive property in the country, and there is barely any undeveloped property on A1A in Palm Beach. The property that is undeveloped is generally not for sale or may be for sale at astronomical prices.   This property is also some of the most resilient property in all of Palm Beach county, and it hasn’t taken much of a hit when other areas of Palm Beach County has.
So in terms of domaining and simply buying a geodomain name for PPC, yes, they may be overrated, but I think most domain sales would be considered overrated if you just looked at them based on the PPC value (numerics, LLL.com, .mobi….etc). However, I would certainly be willing to pay overrated prices for geodomains.   Hopefully when Bido launches, they will be able to offer some great geodomains for sale 🙂

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