May 2006                    DNJournal.com               The Domain Industry News Magazine

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T.R.A.F.F.I.C. West 2006 Highlights

I just returned from the largest domain industry gathering held to date, the T.R.A.F.F.I.C. West conference at the spectacular Venetian Hotel in Las Vegas. 502 people came from around the world to learn more about the business, network with industry leaders, discuss partnerships and buy or sell domains.

We will be publishing a complete conference wrap up Thursday evening (May 11). However, as I wrote you soon after I arrived in Las Vegas, I wanted to give our newsletter subscribers a sneak peak at what happened during the show (which is why the newsletter is arriving a few days later than usual this month)!

The highlights included the biggest live domain auction ever held, an event in which $2.1 million worth of domains were sold in just 3 hours, including the highest .net sale ever reported, Sex.net, at $450,000.


Scene from historic live domain auction 
at T.R.A.F.F.I.C. West 2006 in Las Vegas

The many seminar sessions included a special opening day shootout featuring representatives from nine different PPC companies. Each tried to make a case for why their service was the best for monetizing domains. A networking session followed that allowed everyone present to meet 24 people before the event ended. 

After the sun went down, a centerpiece of every T.R.A.F.F.I.C. conference, the DomainSponsor Party, was held at the exclusive GhostBar on top of the Palms Hotel. DomainSponsor arranged for a fleet of Hummer limousines to whisk attendees across town for the big bash. 

The photo below was snapped inside one limo headed to the party. Shown left to right are Howard Hoffman (PPCIncome.com), Diana Jackson and Ron Jackson (DNJournal.com), noted attorney John Berryhill and Jay Westerdal (Name Intelligence.com). Actually, Dr. Berryhill's body is at the far right, but through some unusual contortions his head is to the left of Westerdal's!

 

Once at the Palms, an elevator took us up 55 floors to the famous night club (featured on MTV) that features an outdoor patio with a a spectacular view of the Las Vegas skyline. The event ran until 3am, which accounted for an unusually low turnout at breakfast Thursday morning!

The second day of business included three more seminars, including one featuring heavyweights from the financial community. We'll have details on all of these sessions in our conference wrap up later this week. 

Most of the afternoon Thursday was devoted to the live auction. As big as the sales were there, some even larger ones were worked out in private rooms during the week. We know of one, which we may be allowed to announce soon, involving a two-letter domain that is changing hands for $1.6 million.

View of Las Vegas 
snapped from the GhostBar patio
during DomainSponsor Party at The Palms

T.R.A.F.F.I.C. ended with a Friday morning breakfast, a meeting of the World Association of Domain Name Developers board of directors (where plans for future conferences were discussed) and a poker tournament which I knew enough to stay out of for my own good! It was another great event, as was the Domain Roundtable conference two weeks ago in Seattle

 

These special events have helped propel the industry to heights that were unimagined just 18 months ago. It's my hope that you can all attend one sooner or later. Even if it means saving up your nickels and dimes and taking your vacation time to do it, I am confident it will be time and money well spent. 

 

Don't Believe Everything You Read

I was scheduled to speak at the T.R.A.F.F.I.C. conference Thursday afternoon (May 4) on "Sales Trends in the Domain Market". However a Washington Post newspaper article that I received soon after landing in Las Vegas, prompted me to change the topic of my talk at the last minute. I felt that the errors and misrepresentations in this article (which appear to me to have been intentional) required me to warn both individuals and company executives about what can happen when dealing with reporters and editors that take their responsibilities as journalists lightly (or even worse, who adulterate their news reporting with dishonest tactics aimed at delivering a message they decide will be delivered regardless of the truth).  

 

The boom in the domain market has triggered a sudden surge of mainstream media interest in the industry. This started with articles in the Wall Street Journal and Business 2.0 magazine less than six months ago. Since then many other outlets have gotten on the bandwagon including USA Today, who put an article about the domain boom on the front page of their widely circulated publication last month. Until the Post article last week, I have been very pleased to see generally accurate and fair reporting on this business. 

Maybe the reporter had her fingers crossed when telling me what her story was about.

Print outlets have been bleeding readers and advertisers to the Internet in a trend that appears to be unstoppable. Even so, quality publications have stuck to sound journalistic principles and avoided skewing their news coverage to attack this new medium that threatens their existence. They know that is a line you cannot cross if you want to maintain your credibility.

My experience with the Post leads me to believe they do not respect that line. Reporter Leslie Walker called me and told me she was doing a story on "the boom in the domain market". That was false. The story turned out to be about something completely different - the issue of trademark sensitive domains appearing in Google search results. Now, there is nothing wrong with doing a story on that topic, but it is not all right to do an interview on a completely different subject, then take the responses you get and drop them into an article about something else to make it look like someone supports your premise when they do not. 

As a professional journalist for more than 20 years, I've seen things taken out of context before, but never to this extent. During an hour-long interview, Walker asked me only one question about misuse of trademark-related domains. That was "what do people in the industry think about the practice?" I told her it was frowned on as it made the vast majority (who invest in generic domains) look bad. The rest of our discussion was about generic domains and how they are monetized.

I explained that many of the pioneers saw this opportunity a decade ago and invested millions of dollars to build the portfolios they now hold. They did that at considerable risk in the face of people who told them they were fools. I noted that finally, some of those pioneers are now reaping the rewards of their remarkable foresight by, in some cases, earning millions from their investments. In the article I appeared to be making a flippant comment, "I know several guys making over a million dollars a year from advertising on their domains!" As if it was all easy money that the recipients didn't deserve. No mention of the millions they invested nor of their seeing the opportunity years before anyone else dreamed of it.

Even worse, immediately after my quote, the writer inserted a comment from a Los Angeles attorney making it appear that he was responding to my statement when he is quoted as saying "the practice amounts to someone making money off someone else's trademark without permission." We were talking about two completely different things in two separate interviews. That is simply dishonest reporting, aimed at making all domain investors look bad. In my opinion it is unconscionable for a journalist to do that and it is the sort of thing that the term yellow journalism was coined to describe.

So what can you do to avoid such situations? Learn which publications and reporters you can trust to tell the truth. If they forfeit their credibility with this kind of willful deceit I would never trust what they write on any topic. Does it mean I will stop talking to the mainstream press? Of course not, because the message we have to get it out is too important to stifle because of one bad incident. The public needs to know that domain investors are no different than investors in any other asset, whether it be stocks, bonds, real estate or anything else. They risk their capital with the hope of making a return on their investment, just like everyone else.

Internet pioneer Vint Cerf
(Chief Internet Evangelist for Google.com
and Chairman of the Board at ICANN)
speaking at 2006 Domain Roundtable

A lot of this lingering animosity toward domain investors stems from a mistaken belief that the Internet was somehow meant to be a non-profit public trust. Vint Cerf, one of the original engineers who developed the Internet (some even call him the "Father of the Internet" though it is a term he detests) made this clear when he spoke at the Domain Roundtable conference in Seattle two weeks ago. Cerf said that he always felt that the Internet needed to embrace commercial activity if it was to grow. He appreciated the vision the early domain investors showed in placing their faith in the new medium, noting that even he never could have imagined domains holding the financial importance they do today. 

This is a business I am proud to be a part of. It is time to get the domain industry's story out accurately and banish misuse of the "cybersquatter" term (which properly applies only to trademarked domains). Even the Wall Street Journal used that word inaccurately in another story last week (though I think that overall, their coverage has lived up to the high standards they have built their reputation on). 


We still have some distance to go, but we're getting there. The story has just started unfolding and in the end, the truth will prevail.


Industry Experts Weigh In With In-Depth Articles

If you want to get the real story, nothing beats getting it directly from the horse's mouth. To that end, DN Journal occasionally runs articles written by widely recognized industry experts. Many of you have already read the excellent series of articles on various ccTLD's done for us by Sedo.com managers who oversee operations in specific countries (you can find these reports in our Articles section).

Bob Martin, CEO
Internet REIT

In the past week, we have added pieces from top level executives at Fabulous.com and Internet REIT. In the first article for a new series called Dan Warner on Domains, the Fabulous.com COO (who is well-known for his in-depth industry research) talks about "Traffiic Targeting and Wastage". 

Also debuting as a guest columnist this week is Internet REIT CEO Bob Martin with a piece titled "The Domain Business Gets Real". 

Dan Warner
COO, Fabulous.com
and Dark Blue Sea

I am going to have to rely on these guys not to put me out of a job! Their insight and communications skills could do that, but I'm willing to take the risk because I believe that getting an unfiltered industry view directly from executives at this level is invaluable for understanding the domain business today. 

 

Domainer in Brazil Demands Equal Time

In last month's newsletter, I told you about how the current domain boom was creating opportunities in other extensions. Last week I got an email from a veteran domainer in Brazil, Gustavo Volcan Nunes. He said the explosion in the domain market has reached his country too and he wants people to know about it. 

Nunes wrote, "Me and my partners lead the domain parking business in Brazil. Right now there is almost 1 million .com.br domain names registered in Brazil. We are getting big in the global market and fast and many great businesses are operating here (most coming in the last 2 years)."

"Many top level domains are being sold for high prices (and also many for very low prices) and 
several million dollars and euros are made each year with DomainSponsor, Sedo,  
DomainSpa, TrafficZ and other local companies. I'm writing because I always read your articles and I see that our market is being completely ignored. Probably they won't even mention our country in the next T.R.A.F.F.I.C. event in Las Vegas," Nunes said. (Editor's note: as far as I know, he was right about that).

"Great business oportunities are going on here at this moment, top level high quality
and traffic domains are being bought for very low prices. For example, a few days ago I bought:

Musica.com.br (music) for something around $8,000
Ouro.com.br (gold) for something around $6,000
Videos.com.br (videos) was bought from one of my partners for $13,000

Me and my partners together own more than 10,000 very good domain names with high traffic. Please, make people aware of our market there in your journal. Millions are being wasted - I mean big opportunities! At least mention our market. Forgive any error of English, my native language is Portuguese."

No longer any need for me to mention it Gustavo - you just did! I had actually heard an American domainer (whose wife is from Brazil) talking recently about the great domain opportunities in your country, so it does look like your secret won't be a secret much longer!

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

 
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