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Finding End User Prospects

Elliot Silver
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8

Subscribe to Elliot's BlogFinding end-user prospects for your category defining domain names is just as easy as searching Google for that term. Chances are fairly good that if the category is at least somewhat competitive, there will be several advertisers on the top and side who are paying tens, hundreds, or thousands of dollars a day in pay per click advertising.   If someone is paying this much money to ensure their top position in Google, they may understand the argument to spend money on their category defining domain name.
I personally prefer to reach out to the SMBs (small to medium sized businesses) who advertise on Google.   Compared to large companies, there is much less red tape involved in decision making with SMBs, and you can have an answer in less time than you would if you went to a large company. Many times, the decision maker is also the person who signs off on the monthly Google ad spend, so this is a good opportunity to speak with the right person.
My note to the Whois contact will explain how I found the company, and how I believe the domain name can help them. Not only can a category defining domain name help save money because of the type-in traffic (if that is true), but the category defining domain name will give them even more credibility.   This is much more pertinant to the SMBs who are probably competing with the large brands for positioning in Google.
For some companies, it makes sense to buy a domain name for $25,000 when they are spending $5,000 a month in Google Adwords spends. For others, they prefer to market their brand rather than use a generic domain name.   If a company has an issue with branding, I like to recommend they look at Vodka.com, Baby.com, and Loans.com to show brands that have successfully used generic domain names in advertising without watering down their brand.
Companies that spend money on PPC advertising buys are generally more aware of the power of a good domain name. Educating others is important, but I will let Google and Yahoo spend their time and money educating. I’ve found it to be very tough to sell an expensive domain name to someone who doesn’t really get it.   There are enough companies out there that do get it.
If you want an example of a company that gets it, have a look at this week’s domain sales report on DNJournal.   Rick Schwartz just sold RoomDividers.com to the operators of OrientalFurniture.com, who currently hold the #1 side banner ad spot for the term on Google.   This is clearly a company that gets it, and in time, they will probably be able to rely less on PPC and more on organic search traffic.   Smart move.

Domain Tax Tip

Elliot Silver
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9

I should preface this post by saying I am not anything close to a tax expert, and in fact, I received a D in Financial Accounting in college (granted I was pledging a fraternity). Nevertheless, I want to talk about taxes with regards to your domain business. I know it’s barely September, but if there are things you can do to lessen your tax burden before the end of the fiscal year, now is the time to do it.
The tax problem I generally have with my business is that I frequently spend quite a bit on acquisitions after a big domain sale, and taxes are an after thought.   For example, after selling a domain name for $80,000 and making a $40,000 profit, I am often inclined to go out and buy a $70,000 domain name.   However, assuming a 35% tax rate (state and federal combined), I would owe the government $14,000, leaving me with $66,000.   Since taxes aren’t taken out at the time of the sale, I might feel safe spending $70,000, but if I develop the new name, I have to come up with the extra $4,000.
That said, there are ways to lessen your tax burden by spending money on expenses such as new computer equipment, office upgrades, web development, research, self-employment pension plan contributions… etc. All of those with the exception of the SEP contribution are things that need to be considered before the end of the year.   It doesn’t make sense to go out and spend a boatload of money in the middle of December simply to lessen your tax burden.   You will end up with lower quality things since you are essentially spending to spend.
My best piece of tax advice is to speak with a professional accountant. While an accountant may not know the ins and outs of your domain business, he should be able to understand the jist. Regardless of his experience with a domain-related business, your accountant can give you general business tax advice, including how to lessen your tax burden.
Again, I am not a tax expert, but I believe now is the time of year to have a conversation with your accountant to show him how you’ve done so far and see how you can run your business more efficiently.   As your business grows, you will want to meet with him more often, but at the very least, a once annual check-up is smart (aside from when he is doing your taxes). Also, now is a good time to teach him about your domain business, as he will have more time to learn now than in March or April.

Google Chrome for Mac

Elliot Silver
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5

Google Chrome looks like it’s going to change web browsing habits if it’s widely adopted. Unfortunately, Google Chrome for Macs hasn’t been released yet. According to the download page, “Google Chrome for Mac is in development and a team of engineers is working hard to bring it to you as soon as possible.”
At face value, after reading a few reviews, it looks developing domain names will be even more important, as users only have one box to enter a search term or domain name. If the user enters TropicalBirds.com, he will see this website and possibly other websites that are related (although I can’t confirm whether entering a specific website will return similar websites).
As I have witnessed with some domain names, Google does not seem to like parked domain names in their search results.   In fact, many domain names I’ve purchased that were previously parked are completely out of Google’s algorythm and I’ve had to submit a reinclusion request.   If you type them into the Google.com search bar, they won’t even show up.   This doesn’t bode well for parked domain names that rely on type in traffic because if browsers type in the domain name into Chrome and it’s not in Google, they may not be inclined to visit – or they will be dissuaded by seeing a website that doesn’t look developed.
Again, user adoption is going to determine the impact Chrome will have on search.

Types of Domain Names I am Buying

Elliot Silver
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65

With as much uncertainty as there is in the domain market these days, I am being more selective about domain names that I buy. As PPC is dwindling, there is less money being reinvested into the domain market by domain investors. Since much of the domain sales market has been fueled by domain investors reinvesting their PPC income, that area of the market seems to be stagnant.   End users are still buying domain names, but as most people know, it’s a tougher sell.
In that vein, I am being more selective about the names I am buying. When I think about buying a domain name, on top of the standard research I do, I ask myself how the name could be developed into a website. If there is no obvious way that a business could be established on that domain name, there isn’t much of a chance I am buying.
I like geodomain names for this reason.   It’s fairly easy to imagine how a city names (in the .com) can be developed into a business.   While it’s not easy to generate sustainable revenue to make a living, knowing what the site should feature is a no-brainer.   Cities, regions, and countries are like brands with which people are familiar.   If you asked a random person on the street in California what Burbank.com would be without prior knowledge, he would probably say, “a site with information about Burbank, California.”
I also like category defining product related domain names like TruckRims.com (which will be auctioned off by Rick Latona at Traffic) or ComputerSpeakers.com (which I once owned).   If you know what to expect on a website before you’ve ever seen the site, the name is probably a good name. It’s important, however, that a business can be built around that concept – otherwise, how will you make money?
One problem I am having is that many end user companies also know how strong these product and service related domain names are.   I have seen quite a few Whois lookups lately where names are owned by CSN Stores or Net Shops.   These companies get it and they own some fantastic product-related domain names that probably won’t ever be on the market.
If you have great .com product related domain names, drop me a note in the comment ection.   I had once offered up to $100,000 for a city .com domain name, but that didn’t yield a single viable city .com name unfortunately.   I am not looking for anything other than .com right now, nor am I looking for brandable type names.   I am looking for names like WindowTreatments.com, Dehumidifiers.com, WashingMachines.com… etc.   If you have a fantastic name like this, I am looking – and if I can’t afford it, I know several friends who have much larger budgets for these types of names. The problem is that end users own most of these names.   Some are starting to understand the value – which ultimately is a very good thing for domain investors.

In Wake of Disaster, Domain Investor Does Good

Elliot Silver
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4

I read a story in ComputerWorld about domain speculators buying hurricane-related domain names and parking them or listing them for sale to profit off of this natural disaster. Every time a tragedy strikes, it seems that domain speculators buy related domain names with the purpose of profiting off of disaster. This causes much criticism of the domain investment industry, and it seems legitimate domain investors take it on the chin after every tragedy.
While speculators are still buying Hurricane Gustav-related domain names, there is at least one domain investor who is foregoing profit to make a difference. Fin Lemonde registered GustavRelief.com and similar domain names on behalf of his church a couple of years ago. Fin saw people buying Katrina-related domain names and wanted to make a difference in the event any of the 2008 hurricanes caused a disaster. Fin’s idea was to create an organization that could lend itself to helping other human beings if the need arose.
Because of other projects that took precedence, as well as a tragic personal loss in the last couple of years, this organization never got off the ground. Fin kept the domain names on the back burner until a few days ago. Upon hearing news of Hurricane Gustav’s potential to cause major damage to New Orleans and the Gulf Coast, Fin realized he needed to do something with this important domain name to help. Putting personal morals over profit, Fin has decided to forward all traffic from GustavRelief.com to the American Red Cross.
People in need of services or help in the wake of Hurricane Gustav that type in GustavRelief.com will not have to worry about clicking on advertisements, relief scams, or being sent elsewhere. Instead, they will be sent directly to the American Red Cross homepage where they can receive help from one of the leading American charitable organizations. Likewise, people who want to help will be able to do so as well. As soon as time permits, all of these protective domain registrations will forward to a single landing page where visitors will be able to choose from several charities that are helping with relief efforts.
This is a story of a domain investor doing the right thing. Instead of the negative stories about domain investors we always see, wouldn’t it be nice if media outlets focused on people doing positive things to help other human beings?

Use Caution When Updating Whois Information

Elliot Silver
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0

Mike Berkens wrote an important post today about keeping your Whois information current and updated. ICANN regulations require that Whois information is accurate, and if the information isn’t accurate, there is a chance that your domain name could possibly be taken. There are also many legal reasons to do so, which Mike outlines in his post. It just makes sense to keep your information updated, and if you are worried about spam emails or privacy, just buy the privacy guard.
In this vein, I think it’s also important to note that some UDRP panels have ruled that a change in registration information can be seen as a brand new registration. One recent case (although it didn’t really impact the decision) was on the BME.com case, which the respondent lost. The respondent had changed his Whois information (between his own entities), and they still cited this changing Whois information.
In addition to this issue, Godaddy also seems to still lock domain names for 60 days when the Whois information is updated.   While this can usually be remedied somewhat quickly if you contact them, it is a nuisance.
Yes, maintaining your valid Whois information is most definitely important – especially if a signficant event has impacted it (ended partnership, bankruptcy, company formation, divorce…etc).   However, keep in mind that changing your Whois information could put your domain name at risk depending on who is monitoring your Whois listing.

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