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While
the Castellos are very well-known for their prime Geodomains, they
also have a superb collection of generic domains, including Kennel.com,
Bullion.com, Banana.com, Daycare.com, Driven.com
and many more. While they have focused their energy on the city
domains the past nine years, they said the generic domains would
get their turn in 2007.
Michael
said, “Kennel.com,
Daycare.com,
GolfClub.com
and others are becoming businesses of their own. Daycare.com has
over 12,000 facility members that have personally
registered their daycare with us. We charge $3 per month
for a basic listing and we help children along with parents and
caregivers. GolfClub.com is a brick and mortar business that in
its first year booked over $1 million in sales and
Kennel.com is one of our newest startups. These are the kind of
names that not only have regional, but world-wide market
potential. We may partner with some of them. We are always looking
for the right people, ideas and chemistry to move these names and
ideas forward.
|
Screen
shot from CCIN's GolfClub.com |
As
you can tell, the Castellos are very focused on developing
their domains. Other owners of high quality names are
content to monetize them through pay per click parking
rather than take on the workload that full scale
development entails. There has been a long running debate
in this industry about those two strategies. David said,
“In my opinion, there is no comparison between
parking a name and developing one. I find premium domains
analogous to real estate. Parking a premium domain name is
the same as using prime real estate to build a parking
lot. People pay you to park their car and they walk
off the lot to bring their business elsewhere. Can
you make money this way? Of course. But let's say that
instead of a parking lot you built a luxury hotel. Not
only will you generate more revenue and keep people
on your site, but you've also enhanced the value of
your property. The same rule applies to a premium domain
name.” |
Parking
still has a role, even with determined developers like the
Castellos. “We have an extensive premium domain portfolio, so we
presently need to park some names until we can get to them,”
David said. Developing is a time consuming process and that
is why I've become an advocate of development experts partnering
with premium domain owners. If there was ever a marriage
made in heaven it is this one. The synergistic capacity for
revenue generation is unstoppable. It all comes down to
people understanding the limitations of their current situation
and wanting more. Yes, good developers will always make
money. Yes, premium domain name owners can always park their
names and generate revenue via their intuitive traffic. But very
few in either situation will ever make real money.”
Michael
added, “The URL could be the ultimate search engine. A
visitor should be able to put up any word, add .com and get
exactly what they are looking for. To not do so loses market share
for that name. If a visitor types in a top-level name and does not
find what they are looking for they will look elsewhere, you then
help to create you own competition. If a good domain is parked, it
is not going to get you the full value of that name.
PalmSprings.com does seven figures a year in advertising revenue.
If PalmSprings.com was just a parked name it would fetch far less.
Intuitive names must be developed,” he said.
When
people have the kind of success the Castellos have, everyone wants
to know if it is still possible to duplicate what they have done
by doing the same thing. Michael’s answer is an emphatic yes.
“The domain name market is still a gold mine! Get a
second mortgage, sell the family jewelry! If you can find a
premium name that relates to your business for less than $100,000,
buy it! With an hour’s work a day you could have an imprint on
that market in two years. Be the master of your own universe. How
many within your family tree could have said that? They will be
talking about you in future generations. What is that worth?,”
Michael asked.
“I
am truly excited about the potential grand scale of the internet.
Selling advertising on the internet has become almost common
place. It
was so hard years ago trying to convince businesses that the Internet
was going to be an advertising bonanza."
| "These
days just about everyone has email and a web page.
Just the other night David and I were having a cigar at a
local Palm Springs cigar shop. There were three other
customers that all became involved in a conversation with
us about the web. By the end of the night every one of
them wanted to have their businesses promoted on
PalmSprings.com!,” Michael said.
He
added, “The internet combines all the major
technological phenomena of the past century in one.
Telecommunications combined with television along with the
PC computer. In the future I believe people will cocoon
more in the security of their homes. Imagine a wall in
your room that is completely a portal to others. Along
with holographs and the speed up communications of fiber
optics we will have escapism to the extreme. The internet
will be at the forefront of that revolution.” |
Screen
shot from CCIN's PalmSprings.com |
David
said, “If you have the money, purchase the best domain name you
can get your hands on. But remember the golden rule: a
domain name is only worth what you can do with it. We've turned
down $5,000,000 for PalmSprings.com and didn't think twice
about it because we've monetized it so well. However, in
someone else's hands, PalmSprings.com could have been parked
or less developed and worth nowhere near as much. If you have the
talent and vision to develop a generic mega-domain, please give
people like us a call.”
“Whatever
you do, learn to trust your instincts. I will always be
grateful that in the music business you have no choice but to
trust your instincts. Way too many sharks in those waters. If you
truly believe in something, go for it and let no one
dissuade you. And if you're wrong, so what!? Learn from your
mistakes like everyone else. And if you're right, there's no
greater satisfaction. Go for it. Otherwise, you'll always be one
of the sheep!” David declared.
Michael
also wanted to talk about what he thinks is a key ingredient to
Internet success. “I must explain how I feel about .com above
all else. Major industry and Madison Avenue have spent
literally billions to brand a name they do not own. Using .com has
been burned into the learning curve of what is the
internet. I view it no differently then the 0 though 9 numbers on
your phone or TV. The public accepted those ten numbers as the way
to control the phone or TV and .com is no different when finding
an address on the web. Look at all of the major advertisers on TV
or in print ads. They use .com as their address and that has been
imprinted on the public. I believe a standard has been set and it
will not deviate from it. The other TLDs are of interest but they
do not rise to the level of .com. Figure on spending much more
to advertise a TLD that is not a .com.”
 |
David
offered another secret of their company’s success. “We
generate almost all of our revenue using static
advertising rates. Static advertising is how
traditional media makes their money. Magazine and
newspapers charge a fixed rate based on ad
size/placement and radio and cable charge a fixed rate
based on time/placement. In 1997, I didn't want to
reinvent the wheel and the whole CPM/click-through
method seemed like pennies on the dollar. I simply looked
at traditional media and said, "These guys have it
made. Why can't we do that?" Of course,
everyone said I was crazy. But I persisted and that is the
method CCIN utilizes today on its city sites. It is also
the reason why the front page of PalmSprings.com alone
generates nearly a million dollars a year in pure
advertising revenue.” |
Success
has given the Castellos the freedom to do anything they want. I
asked each of them what was important to them away from work.
Michael said “I love water and snow skiing. Golfing is also a
passion. We are fortunate to own sites that also relate to what
were enjoy. Traveling for Traveler.com, golfing for GolfClub.com
and maybe in the future racing with Driven.com. I am married with
two children, and I enjoy sharing life with them. They help to
keep my feet on the ground,” Michael said.
He
added, “the internet has allowed us many things which I feel
truly blessed for. There was a point in my life where I was broke
and was told I was dying. I made some of the best decisions
in my life then. Sometimes when you have too much time on your
hands you can also get clarity. Patience was the best
lesson I ever learned, but I always ran from stagnation. I try to
give where I can, learn from what approaches me and live life as a
gift. My motto: Live – Love – Learn.”
David
said “I married my wife Natalie, who is a Boynton Beach
native, in May of this year at a castle in Castelfiorentino,
Italy. I miss performing so I will jump on stage to play drums
anytime! As far as today's music is concerned, I like any style as
long as it's melodic. In the end, melody is what matters and what
people will remember most. I also respect acts who actually
play their instruments on stage and don't mime or lip-synch along
to a recording. Music is art. It's not supposed to be
perfect.”
I
mentioned earlier that the first words I heard out of David’s
mouth was that monologue on World War II history. In addition to
being a pastime, that area of interest has served him well in
business too. “Military history fascinates me because it usually
entails people strategizing to gamble everything. War is a
horrible thing and should never be glamorized, but in business,
especially in a competitive new medium like the Internet, you have
to totally commit yourself. The day I arrived in
Palm Springs I was shocked to discover that two of the bolts
holding my T-Bird's engine to the block had snapped off along the
way. I was broke, the car was a wreck and I had no way to return
to Florida. It seemed like an omen. My first thought was,
"I've just burned my boat on the beach and have no
choice but to make this succeed!"
David
Castello (in red shirt with back to camera) talks military
history with
(left to right): Patrick Carleton (Director of Associated
Cities),
Joe Alagna (CentralNic.com) and Jonathan Boswell
(LeaseThis.com)
“I
have no idea why more people don't study history, particularly
biographies,” David said. It can be a road map to the future
because people don't really change that much. They fall in love,
create, destroy, succeed and fail for many of the same reasons they
did two hundred years ago. Only technology, the arts and
fashion change. You can learn a lot from their success and
failures.”
Speaking
of the future, when people spot a trend before anyone else (like
the future importance of domain names) they are regarded as
visionaries and people want to know what they see ahead now. David
said, “It's difficult for me to imagine five to ten years ahead
because I don't want to lock myself into any particular mindset. The
Internet is evolving quickly and the ability to instantly
recognize and exploit an opportunity is paramount to
survival. Lately It seems as if opportunities have been popping up
right around the corner. I don't want to be looking too far
down the road when they do.”
As
the kid who envisioned a virtual copy of the real world on the
web, Michael was willing to make a longer term prediction. “In
the next 5 to 10 years all of our domain properties will be self
sustaining business enterprises. Over time the market has grown
more open and advantageous to our ideas. This is allowing us to
venture into new markets with our portfolio. You could visit Palm
Springs.com, Daycare.com or GolfClub.com and not be aware of who
we are and what other businesses we own. This year we plan to tie
it all together and make it obvious to the public who we are and
what we’re accomplishing.”
| It
is obvious that David and Michael have made a great
team and I wondered what had made their partnership
work so well through the years. Michael said, “we try to
focus on the things we agree on like Cuban cigars
and twenty year old Port. We can be very
bull-headed at times and very competitive. However, our
competitiveness can also produce some incredible
solutions. Look at Ferrari and Lamborghini.
These two Italian men lived only twenty miles apart,
Lamborghini was making tractors and when he saw
Ferrari driving by with all the glitz and glamour he
started making beautiful cars!”
David
points to one instance that proved brotherly love trumps
any minor disputes along the way. "In 1998, I pulled
in $500,000 in straight advertising revenue and the
CCIN network was born. Even though we were already
splitting the revenue, Michael handed me 50%
ownership of his entire portfolio. We're talking over
five hundred premium names. It was an incredibly
unselfish thing for him to do." |
|
"Yes,
we have our brotherly creative battles and any disagreement can escalate into
an audial semblance of an Italian blood feud," David
said, "but we are brothers and ten minutes later
we’ll just as easily forget what we were arguing about. Michael
and I have long understood that there is a unique chemistry
between us where the sum is greater than the individual
parts. Put it this way, if we both agree strongly about
something you can bet the farm on it!” I
don't know about you, but I wouldn't bet against them.
*****
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