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Uneducated Comments from Amateurs

Elliot Silver
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Subscribe to Elliot's BlogThese past couple weeks, I’ve been irritated by people making uneducated comments about end-user sales being too high. On various public domain forums, some people seem to think that end users are paying too much for domain names that define their nice or define a major category in their niche. I think these comments are uneducated and somewhat baffling.
If your family owned a diamond or jewelry business on the 4th floor of a building in New York’s famous diamond district, how much would it be worth to be able to buy out the lease of the shop right on the corner of 47th and 5th, which is passed by tens of thousands of people a day?   This location is far more lucrative to a diamond dealer than it would be to someone else – say a ski shop.   I wouldn’t expect the owner of a ski shop to criticize a diamond dealer for paying millions of dollars to secure the best slot in the diamond district, so why are some domain investors critical of domain sales to end users – the people that know their business?
Some of the threads where comments were being made seem to be more of a personal nature directed at Rick Schwartz and his recent sale of RoomDividers.com.   There are people who are actually alluding to a conspiracy theory or some other dumb bullshit (like Rick is going to stake his rep on a $75k deal).   For fuck’s sake – leave Rick alone.   It’s easy taking potshots at one of the domain industry leaders, but it makes you look like a clown.   By no means do you have to agree with everyone, but there is a way to disagree without being disagreeable.
Think what you want about whoever you want, but when you air your views out in the public, people may be less inclined to do business with you, and it’s your reputation that will take a hit.

Smart Domain Acquisition Strategy & Global Branding

Elliot Silver
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When you see this logo, do you think soccer.tv, football.tv, futbol.tv, calcio.tv?   Perhaps this sport goes by another name in your country, and you would use an IDN to find the site. Regardless of what you call the sport depicted in the logo, Michael Schneider has it covered because of his smart domain strategy. Michael acquired nearly every single worldwide language variation of the word. The branding is unique, and he doesn’t have to worry about losing visitors due to language differences.
By doing what Michael did with his portfolio of related domain names, he can have wonderfully unique branding that many others couldn’t match.   Had Michael just registered one or two versions of the term, it’s likely he would have lost visitors who entered a different term into their browser box.
Other companies have also done what Michael is doing with their brands. Playboy, Apple, and the NBA have   spent billions of dollars branding their logos and imaging, and they are able to use an icon to signify the domain name.   Michael has spent 7 figures acquiring his soccer/football related domain names, but the logo clearly shows what users will find when they enter their familiar keyword with .tv.
Just imagine you are watching a game..they can then freeze/pause on the ball…just add a www. to the left of the ball, a .TV to the right of it and you just ‘spoke’ to the whole world during the game with what carries most sentiment – the ball.
I think this is a smart domain acquisition and global branding strategy.

After A Big Sale – How Do You Reinvest?

Elliot Silver
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Subscribe to Elliot's BlogAfter learning about Rick’s pending big sale, I am wondering what other domain investors do with the proceeds from a very large sale.   Personally, I almost always reinvest as much as I can in better domain names for development or for resale.   I would think that once you’ve sold a 7 or 8 figure domain name, you are less inclined to reinvest in lower value domain names. So I’d like to pose a question to those of you who completed large domain sales or anticipate closing on one:
When you sell a high value domain name, how do you reinvest that money?

  • Do you buy other domain names?
  • Do you invest in real estate?
  • Do you provide seed capital for incubating companies?
  • Do you invest in the stock market?
  • Do you live off of your revenue in the French Riviera?
  • Do you make it rain at the Spearmint Rhino?

They May Be Watching Everything You Do

Elliot Silver
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Subscribe to Elliot's BlogOne of the neatest innovations in the supermarket industry was the introduction of loyalty rewards cards. Supermarket customers sign up for a loyalty card, and the supermarket gives them special discounts that aren’t available to regular customers when the card is swiped at the point of sale. Not only do these loyal customers save money, but they are also privy to special offers from the supermarket. Sounds like a great deal, right?
Well, the reason supermarkets and other businesses are so happy about these rewards programs is because of the fantastic data that comes along with their usage. When you use your rewards card, the supermarket knows how often you buy milk, when you buy beer, what brand of condoms you use (regular or magnums), and a troth of other valuable personal data that you would probably be reticent to share. When you think about it, this is kinda scary.
This same type of thing happens every day in the domain industry, too – although it might not be as obvious. When you do a Whois look-up, that information may be stored by the company where you searched. When you purchase an appraisal or use a free appraisal service, that data may be stored, too. Same goes for your accounts with your parking companies – they know how much traffic your names receive, which niche makes the most money, and which of your names is your biggest earner. Even when you complete a confidential sale using an escrow service, the buyer and seller data may be seen by the escrow company.
I haven’t heard of any cases where this power has been abused, but you should be very mindful of the potential wealth of data you are giving out by performing every day business tasks. You should be especially careful if the companies or principals of the companies can use the data for a competitive advantage. I am all for domain companies hiring people who are familiar with the domain industry and how domain investors think.   However, with that comes the potential for privacy issues.

Excitement Building for TRAFFIC Auction

Elliot Silver
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Subscribe to Elliot's BlogAs Rick Latona slowly announces his live domain auction inventory for the Traffic New York auction, excitement is mounting. This is going to be the first time Traffic allows an auctioneer other than Moniker, and the first multi-live domain auction conference featuring different auction companies. I think this is going to change the landscape of the live domain auction industry as upstarts try to dethrone the industry leader.   This can only bring good things for domain buyers and sellers.
Unless you’ve been living under a rock these past couple of years, you know that Latona has made a huge splash in the domain industry.   Hardly a week goes by where his company isn’t listed in DNJournal’s weekly sales report for a large sale or purchase. Knowing Rick, I bet he is more excited than anyone   at the prospect of changing the landscape of the live domain auction space. I would not be surprised at all to see several super premium domain names added to his current auction list just before the auction – all at crazy low reserve prices.
Other than long exclusivity periods, automatically renewing contracts, and high commissions for silent and live auctions, what’s also hurting the perception of the domain market is the fact that auctions have featuring great domain names at vastly over-inflated prices. Although it may be intriguing to think that an expensive name will sell, most of the time these names get passed on rapidly.
I think the market should determine the price of a domain name, and what better place to test the market than an auction attended and viewed by the biggest domain investors. Add prospective end user buyers that are encouraged to attend, and you’d expect to see tremendous sales on these great domain names after competitive bidding. I think auction houses have been too eager to get top names listed (for the auction and to wrap up exclusive rights for months after) and they haven’t said “no” to ridiculous reserve prices. Few sales has given the perception of a soft market, which isn’t accurate.
I believe Rick’s auction is going to have great names at very reasonable opening prices.   The market will determine the final selling price, and I believe there will be a new industry auction leader anointed.   I hope I don’t eat my words, but I predict Rick will sell an unheard of 75% of his listed domain names, and I predict he will sell upwards of $5 million in domain names.   I don’t know all of the names Rick is auctioning, but this is going to get everyone excited.

HUGE Domain Deal in the Works

Elliot Silver
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Subscribe to Elliot's BlogWhen you see that a HUGE domain deal is going to take place in the near future, who is the first person you think of that made the deal?   If you guessed Rick Schwartz, you would be correct.
Lightning doesn’t strike the same place twice, unless there’s a reason for it.   While some people have said that Rick Schwartz is “lucky,” I would strongly disagree.   Rick saw the potential in domain names many years ago, scoffed at selling most over the past few years, and has recently cashed in, while retaining some of his best names. Not only did Schwartz recently work out huge deals for iReport.com and Property.com (and RoomDividers.com last week), another deal is in the works that in Rick’s terms, “will blow the doors off the industry at the darkest time…..AGAIN!”
While the domain name in discussion hasn’t been publicly revealed yet, the deal is going to make headlines for Schwartz again – and for his friend Kevin who had a hand in the Property.com deal as well. While I won’t publicly congratulate Rick for this until the deal is done, I will say that from this and my own personal experience, it appears more end users are beginning to understand why they should own category defining generic domain names, and many are paying big bucks to get them.

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