April 2006                    DNJournal.com               The Domain Industry News Magazine

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Domain Boom Creating Opportunities in Other Extensions


When I entered the domain business
in the spring of 2002 I found people divided into two warring camps (with almost no one in the middle). The new global extensions, .info and .biz, had been introduced the year before and America's country code, .us, previously reserved for government use, had just been opened to all U.S. citizens (and people with business interests in the U.S.).

The larger camp felt putting money in anything but .com was tantamount to flushing money down the drain. The small but vocal group on the other side of the shootout was convinced that growth of the Internet would make investments in the new TLD's pay off one day and some even predicted .com would fall on hard times as people opted for the less expensive alternatives.


Gunfight at the OK.com Corral

 

I knew very little about domains at the time but two things guided my early investment decision making. One was the recognition that there were a lot of people operating in .com space who knew far more about the field than I did and were also far better funded. As much as I would have liked to get my hands on some of those .com gems, I felt that trying to compete with them head to head would be a recipe for financial disaster, so I turned my attention toward finding overlooked niches that might have potential.

The second thing that guided my strategy was seeing a scenario in the domain industry that I had already seen play out over and over during my many years in the media business. When various channels of communications filled up, new channels were created to meet the demand and those new channels also wound up filling up (making people who invested in them early on quite wealthy). I had seen it happen in the transitions from AM radio to FM, in the expansion of TV channels from the VHF band to UHF, in the explosion of cable TV channels, even in the constant opening of new frequencies for cordless phones.

As the Internet was the greatest communications medium ever invented, I had no doubt that the same thing would happen on the web and invested accordingly, buying thousands of keywords that defined commercial categories of goods and services, popular 3-letter acronyms, etc. (usually for registration fees or only slightly above) in alternate extensions. (Editor's Note: When I say alternate extensions I mean true global extensions or country codes for first world nations, like .de, .co.uk and .us that have huge bases of active Internet users to draw from. I am not a fan of re-purposed minor nation country codes that are marketed to mean something other than what they really are! These have a very poor sales track record and I don't expect that situation to change a lot in the future. I believe domains in those extensions will almost always have to be developed to provide their owners with a significant return on investment). 

That investment turned profitable over a year ago and becomes more so with every passing month as the millions of new businesses that come on the web utilize some of the alternatives to .com - often because the tremendous rise in .com values has priced them out of the generic market in that extension.

The way things are playing out is, in my opinion, the best possible world for everyone because the money now going to the non .coms is not coming out of .com's pie. The pie is simply getting bigger, providing plenty of business for everyone. This has become increasingly evident in our weekly domain sales reports and never more so than in our most recent column (as of this writing) published March 28

In the one week covered in that report, .com retained its usual dominant position but the remarkably wide variety of other extensions and kinds of domains that commanded significant sales prices left little doubt that the market is broadening significantly. There were three hyphenated domains in Top Ten, including a hyphenated .info (New-York.info) that went for over $22,000! Another .info (Physician.info) went for $10,500 and that extension now has two of the year's three highest sales among the non .com global TLD's (the other being Broadband.org, also sold this week for $27,500).

A German IDN (Städtereisen.de) went for over $60,000! A .ca from Canada (Savings.ca) went for over $36,000, a co.uk sold for over $17,000 and a .us (Sales.us) commanded $8,000 as the ccTLDs enjoyed their strongest week of the year. 



The rising tide is lifting all boats and creating opportunities for domain owners in every corner of the business. Despite this, you can still drop in at any domain forum and see the same arguments that were going on in 2002 between .com fans and alt TLD supporters still going on today! It may be entertaining but we view it as a colossal waste of time and energy. The jury is in. Both sides are winning and you can't ask for much more than that! 

 

On the Run!

April is shaping up as one of the busiest months ever for both me and DN Journal. I'm spending this opening weekend of the month putting together a preview of the T.R.A.F.F.I.C. West domain conference coming up May 2-5 in Las Vegas. We already have the interview material with show co-founder Rick Schwartz in the can and as always he held nothing back in talking about the conference and the state of the domain business at large. 

We expect the article to be online by Monday night (April 3) and you will receive an email notice as soon as it is published. I'll have to admit that while I work on that story I'll have the TV on in the background so I can follow the Florida-George Mason semi-final basketball game in the NCAA Final Four tournament Saturday evening. We are based in Florida where cheering for the Gators is mandated by state law.

As always, Tuesday will be spent assembling our weekly domain sales report and as soon as that is out of the way I'll be putting the finishing touches on our April Cover Story that will be online by the end of the week (no later than April 8). I'll tell you more about that article in the next item.



We'll spend much of April & early May 
on airplanes chasing down domain news!

Then it will be time to start clearing the decks to get ready for a three week stretch in which I will see very little of our home base here in Tampa. First stop on the travel itinerary will be Seattle April 18-22 to cover the Domain Roundtable conference for you (actual show dates are April 19-21 but I go a bit early and stay a little late to work in some extra meetings). 

I'll come back home for just a few days to write the show wrap-up article (which should be posted April 27), then will take off for Philadelphia where I have to help my daughter move out of her dorm at Penn where she is wrapping up her freshman year. 


DN Journal's Legal Affairs Consultant, noted domain attorney Ari Goldberger (who also went to Penn), and our new Special Correspondent for The Lowdown column, Ray Hackney, are also based in Philadelphia (Ari is actually just across the Delaware River in New Jersey). The morning after we return to Tampa I'll be getting on another plane and heading for Las Vegas to cover T.R.A.F.F.I.C. West for you.

I know others, especially those who are just now heading home from the ICANN meeting in New Zealand, have been and will be even busier. I think the frenetic pace just underscores how the domain business has changed the past couple of years. A lot of us never had a reason to leave the house in the past as we could do all of our domain related work on a home computer and there were no functions to attend even if we wanted to!

With the maturation of the business into a real "industry" and all of the attendant trappings like major trade shows, ICANN meetings and special interest gatherings, you really need to get out there and see people face to face if you want to give yourself the best chance to succeed. 

Speaking of special interest gatherings, a conference for owners of geographic domains will be held at the Hyatt Regency in Chicago June 2 and 3. The 2006 GeoDomain Expo will be presented by Associated Cities, operators of a network that includes dozens of premier city sites like NewYorkCity.com, LosAngeles.com and Chicago.com. The registration fee is $395 for Associated Cities members and $595 for non-members.


April Cover Story

As I noted above, our April Cover Story will be out in a few days (our cover stories are always slated to appear in the opening week of each month). If you read our debut newsletter last month, you saw our item about the increasing development options available to domain owners to help them wring more revenue from their names. We had a strong response to that newsletter item with domainers asking for more information on this timely topic, so we decided to call on a select group of experts in the field for our new Cover Story that will be devoted to domain development. 

Each person we interviewed takes a different approach to development but all have been successful, so odds are you will find that one of their strategies will work for you. We'll include information on advances made at many pay per click parking companies that, with just a little input from you, can make your landing pages look more like real websites, a development the PPC executives we talked to said can dramatically improve your click through rates. 

searching for domain names

We also talked with a couple of do it yourself types including the UK's David Carter who uses off the shelf software to build mini-sites in quantity, using Google AdSense to produce revenue. Dan McCullough, another DIY guy, does more comprehensive sites and will tell us how he has had success even though he often develops on extensions others avoid. If you don't want to get your hands dirty, outsourcing the work is always another option and we will take a look at that as well.

With domain owners increasingly on the lookout for development solutions, many new companies and investment groups are springing up to serve that market. Our article will also feature Brian Benko of NoParking.com who is partnering with owners of good quality domains to do full scale development projects. Another well funded group is partnering with a handful of tier 1 domain owners (or buying names outright) in another big development project at the upper end of the scale. 

The financial experts at the January T.R.A.F.F.I.C. conference in Silicon Valley recommended development as a way to enhance the value of your domains. If you want to explore ways to follow their advice, we think this is a story you won't want to miss.

Livelier Lowdown

In case you haven't noticed yet, I wanted to make sure that everyone knows that our Lowdown section is now updated daily. The Lowdown keeps you up to date on the latest buzz going around the industry by providing snippets of interesting domain news that you may not see elsewhere. As I noted above, Ray Hackney, who is an active domain investor himself, is now working with me to select items for this column. Our aim is to present concise, easy to read information in a single location where you can quickly get up to speed on items of interest in the domain business. We hope you enjoy it!

The DN Journal Newsletter is supported by Afternic.com, where you can get the name you want and discover the value of the domains you have!




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Sincerely,
Ron Jackson
Editor/Publisher
DNJournal.com

 
The DN Journal Newsletter is produced by DN Journal - The Domain Industry News Magazine located at www.DNJournal.com. Contents may not be reproduced or redistributed without expressed written consent from Internet Edge, Inc. (Copyright 2006)
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