As the title of this post implies, I think some types of web development projects can be cost prohibitive. Although there are plenty of lower cost solutions for building an informational website (like TropicalBirds.com), things begin to get expensive when a database driven directory is needed. Oftentimes, I find myself looking to sell domain names that should be built into a directory website rather than undertaking the task of building, as the price is expensive.
The first cost you need to consider is for the programmer’s time. While I won’t even delve into the actual hourly fees since they vary so greatly depending on the skill level and location of the developer, I know the cost to be expensive. Even if you are able to secure fair rates for the work, it still takes time (at this hourly rate) to properly convey exactly what it is that you want. If there is a difference in language, you should add some hours in the back of your head since there will probably be some issues that get lost in translation.
In addition to the programmer’s time, you may also need to buy software or coding like phpMyDirectory or eDirectory. The prices on these programs are different, and they may also vary depending on how many licenses you purchase. Customization of the software is what gets to be expensive, as most people have something in mind when they buy a website, and the out of box solution won’t work. If you don’t go with a pre-built solution, you might run into problems as custom software is time consuming to build and can be more expensive to maintain, as you may need to rely on the people that built it rather than a fully staffed company like the folks at eDirectory.
Finally, as I’ve heard many times in many places, you shouldn’t count on your programmer/developer to be able to design your website for you. Most of the time, programmers are good with coding, but not as good with design, and visa versa. Sure, there are jacks of all trades, but if you choose to use one, it is likely that you are sacrificing talent somewhere. In my opinion, the coding is more critical than the design of the site, so if you need to sacrifice talent, it’s probably better to do it on the design side of house.
With all of these elements comes considerable expense. For a directory-based website, I’ve seen quotes of anywhere from $2,000 (not much customization) to much, much more depending on the concept and deliverables. If you spend $8,000 for a great looking directory website, you need to keep in mind that you are going to have to earn this back – in addition to what you paid for the domain name – just to break even. The problem is that if you expect to earn just a few hundred dollars a month, you may never earn back your investment.
If you have a great domain name, at least your project will help appreciate the value of your domain name, as the content will presumably drive traffic, add links, and generate added revenue. Since you will probably be reliant on direct to advertiser sales, you can leverage your domain name to get business. Try getting the ear of a business owner with a poor domain name – good luck. If you call, email, or write with a category defining domain name (or a top geodomain), I think you will have a much better chance of making a sale. This is all very important if you just spent thousands of dollars building a directory website and need to start generating revenue.
With all the criticism to domain owners for parking their great domain names, criticizers need to realize that development can be cost prohibitive. In the end, it might be worth more to a domain owner to simply park or sell a domain name for a profit than to undertake an expensive and time consuming development project. As I said a few days ago, for those who do criticize, I recommend them ponying up to buy the parked domain name. If their idea is so good, they are the fools for not leveraging their personal assets to acquire the domain name.
Development Can Be Cost Prohibitive
Sharing Information & Knowledge
Although this has changed in the last couple of years, the domain industry has been a fairly secretive industry. People have been reluctant to give advice, and while that might have benefited individuals and companies, I don’t think it was necessarily in the best interest of the industry. The crux of this was that everyone was essentially a competitor, and it doesn’t make sense to give away a competitive advantage.
One reason why I particularly like the geodomain industry is that people interact and share more than in any other niche in the domain industry in which I have been involved. Instead of treating each other like competitors, most geo domain owners are very happy to give advice and share their knowledge, helping others grow their geo websites. People like David and Michael Castello, Dan Pulcrano, Jess Bookstaff, Rob Grant, and others I am forgetting about at the moment have given me great advice to help me with Lowell.com and Burbank.com.
When I meet with geodomainers, our business conversations are centered around how we can improve our websites and marketing strategies to maximize our revenue. I’ve found that business conversations with people outside the geodomain industry tend to revolve more around making deals, which isn’t a bad thing, but from a learning perspective, geodomain conversations are usually more fruitful. For some people who might not have the time to devote to a geodomain, it doesn’t make sense to jump into this part of the industry. However, for those looking for a rewarding business, it might be something worth considering (BTW, Rick Latona is selling NewRochelle.com, which I think is a great name and growing city right outside of Manhattan).
In a sense, .com city, state, regional and other geodomain owners aren’t competitors of each other. Each of us has a different market and strategy, and it makes sense to share and learn with each other. In my limited experience, I’ve done things good and bad, and I am happy to help others so they don’t make similar mistakes, and I am eager to learn from others as well. Typically newspapers and tourism departments are our largest competitors (and not happy about it), as they didn’t buy these important names before we did.
In this vein, if you are going to the Geo Domain Expo next Thursday in Chicago and we haven’t made plans to meet yet, please get in touch with me. If you are new to the industry, I am happy to introduce you to the people I’ve come to know over the past several months, and I know they will be happy to share with you. This is going to be a great learning experience, and I know it’s going to be fun. I am still hearing rumors about a Michael Seven concert…
Geo Domain Expo Award Semi Finalists
The semi finalists for the 2008 Geo Domain Expo Awards have been announced, and voting is now open. Voting can be done directly on the Associated Cities website. It’s great to see the leaders of this rapidly growing industry being rewarded for their hard work. When the industry has evolved 5 and 10 years from now, these people will still be at the forefront – they have the best domain names. It’s hard (or impossible) for newspapers and other publications to even compete with these names.
Best Monetized GeoDomain
Which site do you feel is generating the most advertising and/or commission revenue relative to the size of its Geo market?
LosGatos.com
PalmSprings.com
PigeonForge.com
Richmond.com
Most Economic Impact
Which site do you feel has generated the greatest positive economic impact on the local businesses in its Geo market?
PalmSprings.com
PigeonForge.com
Richmond.com
SanAntonio.com
Most Influential GeoDomain
Which site would you say had the most influence on how you have monetized and/or developed your GeoDomain?
PalmSprings.com
Richmond.com
Vegas.com
Best GeoDomain Technology
Which site do you feel has taken GeoDomain technology to the next level?
NewYorkCity.com
SantaCruz.com
Vancouver.com
Best US City GeoDomain
Which site do you feel is the best US City GeoDomain?
NewYorkCity.com
SanJose.com
Vegas.com
Best US State GeoDomain
Which site do you feel is the best US State GeoDomain?
Florida.com
Hawaii.com
SouthCarolina.com
Vermont.com
Best US Destination GeoDomain
Which site do you feel is the best destination-oriented GeoDomain?
Branson.com
PalmSprings.com
PigeonForge.com
Best International City GeoDomain
Which site do you feel is the best International City GeoDomain?
Acapulco.com
Glasgow.com
Vancouver.com
Best Country GeoDomain
Which site do you feel is the best Country GeoDomain?
Australia.com
France.com
Ireland.com
GeoDomain Hall of Fame
Person you believe has done most to promote the Geodomain Industry!
Jessica Bookstaff
Castello Brothers
Patrick Carleton
Skip Hoagland
Dan Pulcrano
Developing Great Domains vs. Average Domains
Developing a website takes the same amount of time whether you are building it on a good domain name (CoffeeHouses.com) or an average domain name (FreeCoffeeHouseDirectory.com). Likewise, the cost of developing a website is pretty much the same whether it is a good domain name or a poor domain name. For these reasons, I would prefer to only develop very good domain names rather than putzing around developing new registrations (like I did with DebtAssistanceClinic.com).
When you are building a website, there is absolutely no guarantee that your website will be profitable and make money. No matter how good the site looks and how high it ranks, you can’t guarantee it will earn your time and financial investment back. The more effort you put into link building, content writing, search engine optimization…etc, the greater financial reward you will reap. Doing all of these things takes a considerable amount of time, and as you know, time is money.
While it’s great if you built a website that makes $2/day with Adsense on a low quality domain name, it will be difficult to get someone to buy it for more than 2-4x annual revenue because there is considerable risk in this type of investment. Basically, after many hours of work (let’s say 5 full days) you have a website that may make $700/year. Personally, I think it’s hard to justify spending a ton of time build a great, money making website on a poor domain name.
I’ve noticed a number of developers “bashing” domain investors for parking their domain names rather than developing them. Many of these developers, designers and SEO experts talk about how they could make one of these parked domain names into a huge money making website, and the owner is stupid for parking. While I may agree that parking can be a poor solution in some cases (could cause Google de-listing for one), it is far easier to make money on a parked domain name than to try and build dozens of websites on a domain investor’s prime domain names (all without a guarantee of any incremental revenue).
To the people who think they can do far better developing a name than those who park, I challenge you to go out and make a strategic decision to find a good name and develop it. With your expert plan, why not go out and find an investor who would be willing to front you the money to implement your plan. There are also some fantastic financing options like Domain Capital that can help you pay for your name. With all respects, if you have a plan to develop a high value domain name into a money-printing website, but you don’t have the stones to put up your own money or finance it, maybe the domain parkers aren’t the stupid ones after all?
This is a bit tongue in cheek, as a few of my developer and SEO friends have recently jumped in and bought some great domain names to develop.
While you don’t need a great domain name for a great website, you will certainly make it much, much easier to make money with advertisers and achieve higher search engine rankings (again, if you owned a coffee house, would you rather be listed on CoffeeHouses.com or FreeCoffeeHouseDirectory.com?). Additionally, if you do wish to sell the domain and website, an investor will pay much more for the website with premium domain name.
Since one can only spend a certain amount of hours per day developing a website, its better to spend that time working on a website for a great domain name rather than just an average domain name.
Development Dilemma
So here I am bogged down in development. I am working on 3 development projects at the moment (all my own), not including Lowell.com, TropicalBirds.com, or my blog. I just acquired SushiRestaurants.com and Coffeehouses.com, and I think these names are best suited to be developed. My problem is that I don’t know when I am going to have the time to develop them.
For both of these names, I think a directory site should be built utilizing a database, but I don’t have the skills to manage a database at the moment. I have worked with databases before, but not related to a website. I also don’t have the time to really fully commit to developing both of these sites in addition to the sites I am currently building.
This has been the problem (albeit much, much greater) for some of the large portfolio holders. How do you develop your high value (but maybe low traffic) domain names when you are working alone? What do you do with the names you intend to develop while you are waiting to develop them? Do you park them to earn a bit of revenue, but risk losing Google positioning? I personally wouldn’t do the later, but what do you guys think? What’s my best bet with these two domain names?



