Leave Las Vegas Stronger Than Ever After Quality Time at Traffic
domain industry heavyweights left the ring at
West 2005 Friday (May 27) after four unforgettable days
at the Venetian Hotel in
Las Vegas. Every phase of the domain business has been
accelerating over the past year and the 75% jump in attendance from the landmark Traffic
2004 conference last fall in Delray Beach, Florida
was further proof of that.
tremendous success of the Las Vegas show already has Traffic
organizers Rick Schwartz and Howard Neu ready to
rumble for their next round in Florida. "With
the next Delray show just 4 months and 3 weeks away (October
18-22), we have established a momentum that will really will be
hard to derail," Schwartz said. "I expect an even larger
presence by Google and Overture and at higher levels.
They are REALLY paying attention!"
One of the packed seminar
sessions at Traffic West. Domain industry investors,
executives and service providers flocked to Las Vegas to learn and
build relationships that will last for years to come.
conference opened with a welcoming cocktail party Tuesday (May 24)
then quickly shifted in to high gear Wednesday. A breakfast seminar hosted by
COO Dan Warner kicked things off. As always, Warner came armed with numbers,
facts and percentages to present an opening talk that had
attendees riveted to their seats. Ira Zoot, a veteran
domainer from Chicago told us, "I think
the things that stood out for me was when Warner was talking about
the various types of names with value and that will later have
value. He mentioned searchable keyword phrases, something I have
been pursuing and advocating for quite some time and either being
laughed at or getting into heated conversations about!"
panel discussion focusing on domain hijacking followed (and set the
stage for a pair of seminars on that pivotal topic that followed
on Thursday), along with one featuring four of the top attorneys in the
industry and another with key registrars Moniker.com, Directnic.com
organizers Rick Schwartz and Howard Neu told us that
one of the primary differences between the Las Vegas and Delray
Beach shows was that the Traffic West seminars focused much
more sharply on monetization of domain assets and protection of
those assets. With regard to the latter, Schwartz said the show has
raised over $50,000 to hire a lobbyist to protect the interests of
Wednesday highlights also included a luncheon keynote speech from Marc
Ostrofsky, (the man who sold Business.com in 1999) of
Internet REIT, LLP. Ostrofsky, who was featured in a Newsweek.com
article earlier this month, said his new partnership is putting
together a $250-$500 million war chest to acquire top quality
Ira Zoot told us "Ostrofsky
talked about value of domains beyond their PPC revenue (their
developable value) and I think he "gets" it far more than
the other VC guys who basically were willing to look only at the PPC
revenue multipliers but really didn't seem to want to place much
value on future use or growth in their
Zoot added "I kinda felt like they
were trying to buy as low as possible and didn't really give us the
credit for the forward thinking that has put us where we are today."
Above - Marc
Ostrofsky (left) chatting with Andy Smith, the
General Manager of Marchex, Inc. (whose $164
million purchase of the Ultimate Search portfolio
put the domain industry on mainstream business radar).
capitalists were busy working the crowd throughout the Venetian and
were also featured members of the day's most popular panel
discussion. If they were expecting a series of softball questions,
they had to be surprised when Schwartz pointedly asked them,
"where have you guys been for the last 10 years?!"
above - Venture Capital Panel
featuring left to right: P. Kevin Kilroy of Dotster.com,
Robert Hoult of Walnut-Ventures.com, Randy
Dessau of Investegy, moderator Howard Neu,
Peter Christothoulou of Marchex, Inc. and Richard
DeSilva of Highland Capital
In addition to being a day late, Schwartz told us that the money men
may also be a dollar short. During the standing room only session
they told attendees they were looking to acquire portfolios for 5-7
times annual revenues. With Marchex having already paid more
than 8 times annual earnings for the Ultimate Search
portfolio, Schwartz doesn't believe there will be a lot of takers at
those price levels.
told us, "the VC guys sited "risk" as the key reason for not going higher than those multiples and it was met with skepticism from the domainers who perceive the
"risk" to have been taken by them years ago when they purchased their domains and not now. The exchange was lively and both the VC guys and the domainers walked away with a better sense of each others views and how they approach their businesses."
the Marchex executives at the show provided a little more detail on
their landmark $164 million portfolio purchase last fall.
They said they gave up $155 million in cash and $9 million in stock
options to acquire more than 100,000 domains in the Ultimate
organizers and attendees we spoke with said the first day was
flawless and ended perfectly with a 5-7pm cocktail party that wound
up running past 9pm! All of the conference seminars and speeches were recorded
and Schwartz said they will be made available in the near future as
excellence continued on Thursday (May 26) with a seminar on
the PPC business among the day's highlights. A panel
featuring representatives from nearly all of the sector's
heavyweights, including Google, Overture, DomainSponsor,
Fabulous, Sedo and TrafficZ, fielded questions
from a capacity crowd of domainers.
- Blue Ribbon PPC Panel featuring (left to right): Dan
Warner (COO of Fabulous.com), Daniel Law
(Director of Operations for Sedo.com), Eytan Elbaz (Head
of Domain Channel for Google.com), moderator Howard
Neu, Josh Myers (Overture/Yahoo), Aydrian
Drewery (GM of DomainSponsor.com), Ammar Kubba
drew an ovation with a question he directed to the panelists from
Google and Overture, asking them why they were paying tens of
millions of dollars per year to lease traffic from people in the
room rather than buying the source of the traffic (domains)
themselves. Schwartz also noted that the two industry giants
appeared to be standing idly by watching venture capital companies
snap up the few good portfolios that are on the market, portfolios
that represent traffic Google and Overture will again find
themselves having to lease.
said the companies response centered on the high cost of buying but
he told them that just as their own stock keeps rising, the cost of
acquiring domains will also continue going up. It's a good point,
because if those companies believe in the future of the internet and
in their own business models, they have to believe that the demand
and cost of targeted traffic will only increase.
said there was some indication from the companies that purchasing
was "under consideration". These companies rarely let
competitors know what they are working on, but if they haven't been
looking at buying in the past, odds are they will be taking a
serious look at that possibility after this conference.
late arrivals registered at Traffic West Thursday, pushing the total
number of attendees up to 230. Zoot was there from the start and we asked him to compare the Las
Vegas show with the inaugural Traffic conference that he attended in
Delray Beach, Florida last October.
said "I think the people attending
this conference represent a much wider cross section of the
business. I personally have found the networking before, during
and after the seminars to be the highlight for me, but the
seminars offered a good amount of info."
One of two
busy banquet halls where attendees dined in elegance.
|Zoot added, "There were quite a few folks
that were at the Delray Beach conference but there were at least as
many new faces, which I take as a very good sign for our business
because if they were not finally start to get what we have seen for
years they wouldn't have been here."
|Thursday ended with a huge party at Treasure Island sponsored by DomainSponsor.
The closing day Friday (May 27) was also devoted primarily to
social events including a poker tournament sponsored by Moniker.com
and a golf tournament sponsored by GolfCourses.com. Though
these and the variety of parties held throughout the week are billed as "social" functions, they are often the
events where some of the most effective networking is done.
they did in Delray Beach, Schwartz and Neu made a point of
delivering extras so attendees go home feeling like they got
even more than they expected from their trip. Their
attention to detail went right down to getting the town's
top Elvis impersonator (featured in the current Legends
of Las Vegas show) to make an appearance along with
a Marilyn Monroe lookalike that the predominantly
male audience obviously appreciated.
Schwartz said one of the most fascinating
things for him to see at Traffic West was the networking
going around the clock in every corner of the hotel and at
every function, especially with respect to who was huddled
up with who! He expects a number of important deals to come
out of these head to head meetings in Las Vegas.
Buoyed by the success of Traffic West, his
outlook for the industry is brighter than ever. "I believe we are on
destiny's path with every fiber of my being. I feel as strong about this as anything
ever in my life. There are NO DOUBTS!"
- left to right: Howard Neu, Elvis
(actually the #1 rated Elvis impersonator
in the world), Darren Cleveland and
Marilyn Monroe impersonator.
signs a poster for Traffic West organizers
Rick Schwartz (center) and Howard Neu.
"I keep seeing things that reinforce that we are at the right place at the right
time and heading in the right direction. It comes in little things that are like guiding lights that I will not question, just embrace and acknowledge and then keep moving forward at full throttle. I wish I knew how to really describe it. Just that we are on
destiny's path. It is something bigger than all of us. That's the only thing I really
know." Schwartz said.
Next stop is Delray Beach next fall.
Schwartz said "this show added the VC guys, Delray will add
bankers and Madison Avenue to the mix. The beauty is it is not by force but a natural evolution of events and it is
their will that is bringing them to us. It has taken 10 years but this ship is in
blastoff mode and there is no turning back. The industry is finally getting the recognition it deserves and the
frenzy is starting. I even heard the word frenzy used by others to describe things and I have chills just thinking about the implications of what is about to
Some other faces in the crowd from Traffic West - Las Vegas
of Google and Scott Day at opening day
to right: Marc Ostrofsky (Multimedia Venture Partners
& Internet REIT, LLP) Dean Shannon (Founder
of Fabulous.com and other companies), Bob Martin (CEO
Ron Sheridan (Director of Business Development -
Venetian Hotel -
Traffic West 2005
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