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5 With… Michael Berkens

Elliot Silver
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This week, I was lucky enough to interview Michael H. Berkens, the president of Worldwide Media, Inc. Mr. Berkens is a graduate of the City University of New York at Brooklyn College (BA), Stetson College of law (JD), and the University Of Florida (LLM).

Worldwide Media, Inc. owns over 60,000 domains, and has a retail site selling domain names at http://www.mostwanteddomains.com

Mostwanteddomains.com was listed by a study by Dan Warner of Fabulous released in 2007, as having one of the top five privately owned domain portfolios as ranked by the number of people searching for previously registered domains.

1. EJS: I understand that you’ve done something different with LuxuryBedding.com than with other names in your portfolio. Would you mind sharing some information about this website and how you are generating revenue from it?

MHB: “As an industry we all express interest in developing websites rather than just parking domains. However we all have the same problem, no time, too many domains to develop.

We have entered into a partnership with a development company who specializes in the bedding business. They provided fully developed sites selling products for the home. We share in the revenue generated from the sale of products from the site. Our revenue has increase more than 400% from simply parking the page, and shortly we expect to be ranked in Google, which we certainly could not have been as a parked page which will further increase the revenue derived from the domain. What is pretty cool is that the development company does not carry any inventory. They have deals in place with the manufactures which drop ship the products to the consumer.

We make more money, the developer makes money without any inventory and the vendors sell at a higher profit margin than to a retail store. It’s a win-win-win for all involved. I expect other companies to offer similar deals with domain holders in the coming months and years.”

2. EJS: Is there anything you would trade your entire domain portfolio for?

“As pointed out by Sahar’s Blog several weeks ago, to replace the cash flow generated from domains making just $117 a day in revenue would require $750,000 deposited in a CD for 5 years for an equivalent return. Of course the principal of a CD does not appreciate as domains have. So other than controlling interest in the New York Yankees, I’ll keep the domains.”

3. EJS: Prior to being in the domain investment business, what did you do?

MHB: “Practiced law-slept on the weekends, think it was the last good night sleep I had.”

4. EJS: What is the most difficult part of being in the domain investment business?

“There are several issues you have to be prepared for in the domain business, here is just a couple:

Work and plenty of it.– You have to work every day, 7 days a week, every day of the year, Christmas, new years, your birthday, on “your vacation”. We all do it. There are no days off. If you’re not willing to do it, there are plenty of others that will. If you’re counting the hours you work, you already lost. There are just too many. 40 hour work week, you must kidding; 9 to 5, pretty funny movies with Dolly Parton, but no for this business.

The great part of the business is you can work anywhere you go, on the other hand you wind up working everywhere you go.

Decision making–every day we all review hundreds, thousands or tens of thousands of domains and decide which ones we are going to attempt to get, how much we are willing to pay for each, and which ones we are going to pass on. Every day we get offers to sell one or more of our domains. Every day we have to decide whether to sell or hold. You can’t second guess yourself, you can’t look back and you only have a few seconds to decide on what to do. Too many decisions, too many domains, every day of the year.”

5. EJS: What do you think is the biggest threat to the domain investment business?

“Over legislation, regulation or other governmental action.

Contribute to the Internet Commerce Association (ICA). Be proud of the industry. Stop domain testing, it’s a short term profit that will do long term damage. You know stopdomaintesting.com that’s a good name think I’ll register it, got to go.”

“He must not be a very smart criminal”

Elliot Silver
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Porn Typosquatter Fined Again by FTC

One of the domain world’s most notorious criminals, John Zuccarini, was busted again for typosquatting.    Instead of forwarding traffic to porno like he did last time, Zuccarini was sending visitors to websites containing legitimate products.    Zuccarini’s typosquatting violated the law, and he was surprisingly caught again.    According to    MarkMonitor CMO, Frederick Felman, “He must not be a very smart criminal.”    An expert from the article:

A so-called typosquatter who served pornographic advertisements on domains such as Bobthebiulder.com and teltubbies.com has been fined again by the U.S. Federal Trade Commission.

John Zuccarini has agreed to give up US$164,000 in typosquatting revenue he is alleged to have raked in, the FTC said Tuesday in a statement. Five years ago, a federal court had barred Zuccarini from registering domains that are misspellings of legitimate brands, a practice called typosquatting, but he ignored the order, according to Carolyn Hann, a staff attorney with the FTC.

“He was engaging in practices that violated certain provisions of the order,” Hann said. “He had certain domain names that were transpositions or misspellings of popular domain names.” — Source: PC World

“Gonna Party Like its 1999”

Elliot Silver
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Pardon me for stealing a line from Prince’s “1999,” but I think it is relevant for the topic of whether Internet companies are currently suffering from Irrational Exuberance, creating an Internet bubble similar to the one in 1999 and bursting the following year.

“Dot-com fever stirs sense of déjà vu,” an written by Brad Stone and Matt Richtel featured today in the International Herald Tribune, discusses the idea that a great deal of Internet companies are overvalued, similar to the conditions that existed just before the .com bubble burst in 2000.    

Up until the bubble’s sudden burst, investors valued fledgling Internet companies at much higher revenue multiples than they could possible ever realize, effectively creating unsustainable valuations.    Investors were buying into unproven concepts, and unproven company founders were spending their newfound wealth unwisely. The article points out many similarities between pre-bubble 1999 to the conditions seen in today’s markets. The naysayers believe that today is different because many of the successful Internet companies are generating positive cashflow now, however, it seems like they are spending it recklessly on new startups without regard to potential revenue.

Like the original Kings of the Internet who wasted billions of dollars on unnecessary luxury items, the new Internet Titans should remember the failures of the past. A business is only as strong as its revenue and growth, and based on the experience of people in the online adult entertainment business, viewers don’t necessarily bring revenues. As Aaron Kessler of Piper Jaffray said in the article, Internet companies “are buying users instead of revenue and profitability.”

Exciting Announcement on Thursday…

Elliot Silver
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Stay tuned for an announcement on Thursday afternoon…   I am very excited about it and can’t wait to break it…

Domain for Sale: All Proceeds Benefit ICA

Elliot Silver
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Extracurriculars.com is for sale with all proceeds going to the ICA. A Buy it Now price has not been set, so please make offers in the comment section of this thread or send me an email. The highest offer received by 8pm EST today will get the name.

The term “extracurriculars” has 343,000 references in Google.

The domain name is registered at Moniker.

Saga of Nissan.com

Elliot Silver
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The saga of the domain name Nissan.com is fascinating. For years, Uzi Nissan and the automaker Nissan have fought several court battles for Nissan.com. In December of 2002, a court ruled that Uzi keeps the name but he cannot use the domain name for the following purposes:

“1. Posting Commercial content at nissan.com and nissan.net;
2. Posting advertising or permitting advertising to be posted by third parties at
nissan.com and nissan.net;
3. Posting disparaging remarks or negative commentary regarding Nissan Motor
Co., Ltd. or Nissan North America, Inc. at nissan.com and nissan.net;
4. Placing, on nissan.com or nissan.net, links to other websites containing
commercial content, including advertising; and
5. Placing, on nissan.com or nissan.net, links to other websites containing
disparaging remarks or negative commentary regarding Nissan Motor Co., Ltd.
or Nissan North America.” — Source: Nissan.com website

These restrictions essentially prevent Uzi from generating revenue from Nissan.com, causing him to solicit financial support to fend of Nissan in future legal battles. Basically for Uzi, owning Nissan.com is like owning a giant piece of land right next to an active diamond mine, but not being permitted to mine for diamonds. If he would want to sell this piece of real estate, he could potentially open himself up to a UDRP case.

The end goal of most domain investors is to sell their domain names to end users. I can’t think of a better end user for Nissan.com than the automaker. In my opinion, instead of Uzi’s public fight where he is forced to ask for donations to continue to stave off the far wealthier automaker, Uzi should have someone reach out to Nissan on his behalf and sell the name for a hefty sum. He might give up the rights to his domain name, but at this point, the name is worth FAR more to the automaker. This has become a battle of principles, and I believe Uzi might be smart to sell the domain name.

Instead of having to ask for donations, he will be able to give tzedekah and represent his family name and heritage in other ways.

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