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September 15, 2008

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Howe About That! The Inside Story of One Man's Rise From Low Budget Domain Flipper to Million Dollar Dealmaker 

I've known Page Howe ever since he showed up on DNForum.com in early 2003 looking to rebound from a .com bust that had decimated his extensive Internet business ventures. Howe was there hoping to climb his way back up the ladder by buying domains, often for under $100, and flipping them for $1,000 or more. 

Flash forward four years to 2007 and there was Howe standing on top of the world after completing not just one but two seven-figure sales in the same year, Seniors.com for $1.8 million and Guy.com for $1 million

Move ahead to June 2008 and there was Howe again at the GeoDomain Expo live auction in Chicago, spending six figures to snap up domains left and right for his rapidly growing geodomain empire. In four short years Howe has become the poster boy for the amazing things that are possible in this business.

For those who wonder if it is still possible to make it big with domains, Howe replies 

Page Howe
Site HQ Inc.

with an emphatic Yes! In fact, he says the basics really haven't changed much at all. "In many ways, this feels like 2003 all over again," Howe said. "The same types of things I was doing then I'm still doing now with the same rewards - so I guess I should keep doing it!"

Just as he did four years ago, Howe puts in long hours researching purchases that he believes have a good chance of producing profits down the line through resale, domain monetization or development. The only difference now is that after years of continually reinvesting his profits and "trading up" he is in a position to buy and sell more valuable domains. This is the previously untold story of how Howe discovered the domain business and went on to become one of the industry's key players.

This converted church is home for 
Site HQ's Manchester, Tennessee
offices

Howe currently lives in Manchester, Tennessee, a town of just over 8,000 people located along Interstate 24, halfway between Nashville and Chattanooga. The population of Manchester swells to more than 100,000 people in June when music lovers from around the world converge there for the annual Bonnaroo Music Festival, but the rest of the year Manchester offers plenty of peace and quiet. In fact the office for Howe's company, Site HQ Inc., couldn't be more peaceful - it is located in a 100-year-old converted church building that he bought for just $90,000 (proving he can spot bargains offline as well as on).

The reason Howe, a native 

Californian, wound up in south central Tennessee, is a a key part of the boom, bust and rebirth story that led him to domains, so we will come back to that a bit later - but first things first. 

Howe's story begins with his birth in Burbank, California in 1963. Burbank is home to many movie and TV studios (including NBC-TV) and Page's dad had moved there from Memphis to take a managerial position with a major industry trade group, the National Association of Broadcasters. His mom and dad named him Hampton Page Howe in honor of his great grandfather Harry Hampton (a native of Scotland) who in the 1920s was one of the original members of the PGA (Professional Golfer's Association) tour. 

After graduating from high school in Burbank, Howe headed for the University of Redlands, a private liberal arts college about 60 miles east of Burbank. He didn't know it at the time, but the curriculum there, focused on teaching students at least a little bit about a wide variety of subjects, would wind up being a huge asset when he entered the domain business years later. "What a perfect application of the liberal arts education - to be grounded in so many different areas so you can identify names with potential value," Howe said. He also gained some practical work experience during his college years as he had to work to pay his way through school.  

Howe got to know many members of the university's administration and faculty while serving in student government. In a perfect example of what a small world we live in, more than 20 years after he graduated from Redlands, Howe would bump into school trustee Larry Burgess at a domain event, the Sedo Pro Forum, at the Mohonk Mountain Resort in New York State's Hudson Valley in June 2007. 

The historic Mohonk resort was built (and is still operated by) the Smiley family who happened to be major benefactors of the University of Redlands where Howe had spent many hours studying in the school's Smiley library. Burgess had become something of a Smiley family historian and happened to be at Mohonk the same weekend Howe was there. The two were stunned

Domainers cross a bridge at the Mohonk Mountain 
Resort
during the Sedo Pro Forum in June 2007

and delighted to bump into each other after more than two decades and Burgess was completely fascinated with Howe's domain endeavors, agreeing with Page that it was indeed a unique and ideal application of his liberal arts training.

Of course during Howe's college years in the early 80s, there was no such thing as a domain business, but he did feel that his career would lie somewhere in the business world. The school did not have a specific business program, so he fashioned his own by focusing heavily on economics, political science, sociology and cultural anthropology. In 1985 he graduated with a management degree and was named the top student in his field of study as well the Outstanding Senior at Redlands that year. 

Howe had particularly excelled in a class on taxes, so much so that his professor hired him to work for him doing tax returns for his last two summers in Redlands.  "I really enjoyed the challenge of it and the advising part of it," Howe recalled. Upon graduation that interest led him to take a job with a new company that was one of the first in a field that became known as financial planning. "They were just starting to use computers to plan out what saving certain amounts of money would mean for someone who wanted to create wealth down the road," Howe said. 


Howe at a T.R.A.F.F.I.C. Orlando networking session
May 2008

"The company I joined, Perkins & Zures, had an exclusive roster of medical doctors among their clients and I become the contact person between the doctor's accountants and our financial planning product. This was right in the middle of a huge upheaval created by the Tax Reform Act of 1986 that changed the rules regarding tax rates and shelters. So I went from advising to actually structuring some of these tax shelter products," Howe recalled.

"We started getting some of our doctors together to actually buy companies, not just for the tax benefits, but also to profit from the growth of the companies. One of the major places we invested was in cable television and it 

quickly dawned on us that much more could be delivered on this wire into people's homes than just the dozen TV channels they were used to getting," Howe said.

"What would happen if you could deliver 40 channels, or 100 channels or direct movies and advertisements? I'll never forget giving a presentation to these doctors telling them that by owning these cable systems around the country you are going to own this wire into people's homes and you are going to make money on everything that comes in over this wire. Of course back then, who could have known that this would include the amazing power of the Internet as well."

The cable TV investments paid off very well because they were made just as the cable industry was being rolled up be a handful of major players who were buying every system they could get their hands on. That lesson is one that Howe is drawing on today as he has switched his primary focus to geodomains, expecting a similar roll up to take place in that industry. "I see geodomains as sort of a non exclusive franchise to operate a website for a specific community. I think some companies will become very good at doing that and they will want to scale their model by acquiring additional city domains," Howe said. 

After six years with Perkins & Zures, Howe left to take a position with the one of the company's clients, an MD in San Diego who hired Howe to be an exclusive "family office manager". Howe's job was to help them evaluate and take advantage of investment opportunities. When the web began to bloom in the late 90s Howe said "We decided to put some money into a partnership to buy into Internet companies. We analyzed around a thousand different stocks and wound up putting money into both private and public companies."

"That was a terrific place to invest in 1999 and 2000 but it became a terrible thing to be doing in 2001 and 2002," Howe said. When everything went south, Howe saw many of the group's investments completely evaporate. As the economic climate was starting to go bad Howe thought he still had an ace in the hole. He had become the chairman of a small public company and had a signed letter of intent to sell the company for several million dollars in 2000. Counting on profits from that venture, he decided to turn a hobby he had a passion for - baseball cards - into a full time job by buying a couple of card shops in San Diego.


Howe speaking at T.R.A.F.F.I.C. Orlando
May 2008

As they say, when it rains it pours. Not long after he took over the stores the sale of the public company fell apart and the company itself went down in flames with the many others that were claimed in that tech bust. Howe wound up having to hunker down and find a way to ride out the storm. He put his inventory of some 200,000 baseball cards up for sale on the web and that income plus some money from a part time CFO job provided the only revenue streams he had left. 

During the good times he and his wife Penny had bought a second home in her hometown, Manchester, Tennessee. To save money they moved there in 2002. "We lived in North San Diego which was very expensive, but we loved it there, so it was a very hard decision to move back to Tennessee," Howe said. However with Internet stocks imploding and many of his group's investments plunging to zero it was the only option he had.

"I wanted to be able to stay in business and try to recoup the investments that a lot of people had made with me," Howe said. Before everything had gone south his investment group had started dabbling in domains. "We had originally stumbled into the business after reading a story about Chris Ambler trying to get ICANN to approve a new .web extension," Howe recalled. 


The story behind the hat: At the T.R.A.F.F.I.C. West conference in Las Vegas in February 2008 Australia's Michael Gilmour donated this hat from his homeland to be auctioned off to raise funds for the domain industry's non-profit trade group, the Internet Commerce Association. Howe won that auction and the hat with a generous bid of $5,000. In the photo above, Howe sports his new headgear at his Manchester, Tennessee office.

"There was a perception at the time that all of the good domains were taken in .com, so we thought something like .web might be a new opportunity. But we discovered most of the good names in that extension (which still has not been approved) were already reserved by one guy! So we thought the ideal thing to do would be to own an extension of our own so we could control all of the good domains."

"That got us involved in ICANN's new TLD process and when they started taking applications we applied for .kids and at the same started up a registry company called Basic Fusion that we planned to use to operate the registry." While the ICANN process moved along at a snail's pace, Howe's group decided to get some real world experience in running an extension by joining with New.net to operate their .kids extension. 

New.net tried to market dozens of extensions that were not approved by ICANN and that could only be seen if people had a browser plug in that made them visible, or used an ISP that contracted with New.net to make the extensions usable. That lack of universal coverage doomed New.net's efforts. The ICANN application for .kids was never approved either so Howe was hitting brick walls everywhere he turned. 

He also lost the $50,000 fee ICANN charged those who applied for new TLDs (something potential applicants should keep in mind before getting involved in ICANN's plan to offer an unlimited number of new TLDs starting in 2009. There is no guarantee you will ever get approved). After his experience with .kids Howe said he would never again get involved in any business proposition that depended on ICANN approval.

While the .kids effort was fizzling the partnership busied themselves by assembling a portfolio of about 4,000 domains, but by 2002 they wound up selling off or dropping all but about 20 of those. One of the domains they let go for around $8,000 was GasPrices.com, a decision that came back to haunt Howe when he saw the name fetch $225,000 in Moniker's live auction at the T.R.A.F.F.I.C. show in Orlando last May. Fortunately one his group kept was Seniors.com, a name that would play a key role in turning Howe's luck back around in 2007.

After two years of one disappointment after another, Howe stumbled across the busy domain name chat board at DNForum.com in March 2003. "I found these people selling domain names that I thought would have future value. So I felt that as long as I was in for a dime, waiting for things to come back with Seniors.com and a handful of others, I might as well be in for a dollar," Howe said. "I got out the credit cards I had that still had a little room on them and started buying names from people on DNForum."

Discovering DNForum.com helped
Howe get back on track

Having once again been bitten by the domain bug, Howe also began using the drop services to get additional domains, with the now defunct NameWinner.com service his favorite because names that weren't widely desired could be acquired through them for as little as $9, a fraction of the minimum charged by SnapNames who was the market leader at that time. 

"That started what has now been a five-year routine of studying the delete list every day, deciding which ones were worth at least $60 to me and entering those with the drop services. For others I would wait and hope to pick them up for a registration fee if everyone else passed on them," Howe said. Howe noted that his portfolio is about 85% .com. "I had some dalliances with other extensions and got some one-word domains in .us and .info but have sold most of those off," he said.

As the domain industry started emerging form its long slump, Howe was able to sell some names from his newly expanded inventory for anywhere from 30 to 100 times what he had paid for them. He reinvested the proceeds in more domains and to keep his acquisition costs low, a key part of his strategy was to nibble around the edges rather than compete for the most desirable domains. 

"There were maybe 15 good domains each day and I knew that ten of them were names that everybody knew about," Howe said. "So I would try to get the other five that I had identified through hard work. My edge was being a professional, doing it full time, searching every day and not just relying on a computer to filter names but literally looking at the lists myself. I was trying to get strong names at the lowest price I could, knowing that I couldn't get the best names because I wasn't funded well enough."

Good reason to smile: Howe at 
T.R.A.F.F.I.C. New York 2007 
right after his domain Seniors.com 
sold for $1.8 million

Howe said a big change that allowed him to get back in the game was the decision by many registrars to start keeping their expiring names to auction off themselves, rather than letting them go into the general drop pool. That meant buyers had to search many different venues for expiring domains rather than just go to a couple of drop catching services. Since Howe's model was based on outworking everyone else, he found domains others overlooked because he was willing to do the tedious spadework necessary to uncover the good buys that were now spread across many different venues.

Howe's long climb back culminated last year with two blockbuster sales. The best asset his partnership had left was Seniors.com, a portal domain they had purchased off Ebay for $100,000. That was one of the last domain investments the partnership made before going into the storm cellar and it is a good thing that Howe held onto it so long after the bust. When he put it in Moniker's live auction at the June 2007 T.R.A.F.F.I.C. New York conference it sold for a stunning $1.8 million, enough to make his investors whole again.

With his share of the sale revenue Howe now had enough money to start targeting bigger game and he soon bagged Guy.com through Sedo for a low six-figure price. Howe loved the name and decided he wouldn't let it go for anything less than $1 million. To his surprise, just one month later, a buyer stepped forward, again through Sedo, and met his asking price, giving him a second 7-figure sale, barely four months after his first one. 

With a real war chest to work with now, Howe set his sites on the geo domain market. "Originally I just wanted to get one good city name so I could join Associated Cities (the trade group for developed .com city domain owners that stages the annual GeoDomain Expo). I wanted to be part of the club to take advantage of the networking and their knowledge of development," Howe said. 

After a long search he finally acquired his first geo, Victorville.com, for $26,500 from Rick Latona's sales newsletter. Howe was familiar with the Southern California town because it was located within an hour of Redlands where he went to college. Once he got started down the geo path his ambitions expanded and he decided to pursue what he sees as a great opportunity in that sector.

Last May he got another solid California city, SimiValley.com, from Latona for $90,000 and at the GeoDomain Expo live auction is June he picked up 

Howe racking up domain purchases at the 
2008 GeoDomain Expo
live auction in Chicago.

SantaClara.com and a group of related domains for $85,000. He has also added many other small to medium size cities that give him a network that currently covers about 1.5 million people. 

Page's wife Penny serves as
Site HQ's
Office Manager

Howe said he has been acquiring domains in 2008 at a faster pace than ever before because, with the downturn in the general economy, he is seeing more affordable prices. He is using this window to try to acquire names that were previously out of reach. "We knew that one of the hardest things to get when domains were at peak values were city domains, so we have been going after those while we have this opportunity to get them. For awhile a lot of city owners were saying I'm never going to sell this domain no matter what but there has been some loosening up now. We felt that we needed to act because there are only so many cities."

The expansion of Howe's business was aided by his hiring of a General Manager, Marshall Gilliam, last December. Among other things, Gilliam is handling the company's new city development projects. Howe and Gilliam go to the same church, golf together and now chase domains together. Penny Howe is the Office Manager and Page has a sister who helps 

write content. Those helping hands are critical to keep Site HQ's growth on track and allow Howe to handle all of the irons he has in the fire.
He hopes to eventually roll out a sales site for small business end users at JoeDomains.com (a project he calls Domains for the Average Joe). The site would sell names at different price points, starting at $99 and escalating to high value premium names so the business buyers would have a choice that would fit their budgets. The site would also offer a lot of hand holding in name selection, taking care of the hosting, etc. so that it would be a one-stop shop for small businesses that are confused by the intricacies involved in acquiring a domain and getting a site online.

Howe is also writing a book called Domain Name Investing: How to Make Money in Internet Real Estate that he would like to have out by the end of the year but the release date has been a constantly moving target. "The book has been on hold because there has been such a great 

fertile environment to go do everything I am telling people in the book to go do and I said why don't I just go do that!" As of this writing, that's exactly where Howe is - out there doing it and after all he has been through he is loving every minute of it.

*****


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