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Rice
played a key role in turning BulkRegister into a registrar that
attracted many professional domain investors (and in turn
attracted the attention of new owner Demand Media).
“BulkRegister
cares more about the customer and the customer’s
ability to manage domains and the security of the domains than
anything else. That is what made us exceptional. We introduced 25
new management tools and features in the two years before the
acquisition, most of which were directly based on feedback from BulkRegister
members. People could really see that what they
told us they needed they received, " Rice said.
“It’s
interesting that when I wanted to start charging a $99
annual membership fee I was told that nobody
would pay it. The reality was that nobody had a problem
with it because of the great value they had with the BulkRegister
system and support. People managing domains
worth thousands and millions of dollars will pay for
features. It’s a real opportunity for registrars right
now."
|
Eric
Rice
February 2007 |
"Many registrars seem to think about their client's domains as a $7 commodity while their clients think about the
domains they own as assets worth millions of dollars. In
many cases it isn’t even the value of the domain but the
business built on that domain that has value. Who would keep
valuable domains at a registrar that has poor tools, poor support
and poor security? Many registrars need to wake up and
understand just what it is they are handling and the value they
can provide to their clients,” Rice said.
BulkRegister’s
development of a sophisticated domain aftermarket was undoubtedly a
key factor in eNom and Demand Media’s desire to buy the company.
“Helping to orchestrate BulkRegister’s foray into the domain
aftermarket was extremely rewarding and one of the most
interesting things I have done in my life," Rice said. "The registrars sit in an
incredible position. It was amazing
how a small tweak to a process could improve revenue dramatically
across our portfolios.”
“Some
registrars just don’t seem to get this aftermarket they own or
how to capitalize on it. The right strategies could make them
worth 5-10 times what they are worth today, maybe more in the long
run. There is a preoccupation with registrars to discount the
ideas of others and just work in their own little world. In the
domain aftermarket space it just seems to get even worse. It
is hard for some of them to grasp that each of them has a media
and advertising company that can be woven right into the model.”
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Due
to contractual requirements, Rice is not at liberty to say much
about the sale of BulkRegister but he did say, “We set out to sell
BulkRegister when the
valuation came to where we wanted it, so it was no surprise.
It did happen faster than we expected but so did our aftermarket.
Demand Media purchased a good business and I’m pleased that the BulkRegister
brand will continue to exist. It’s a good
situation and everyone’s hard work has been rewarded."
|
"I
am still working with BulkRegister founder Tom Cunningham and we
plan on investing right back into the domain and internet space as
the right opportunities come alone," Rice said. "Tom and I and our team
developed a franchise model in the web development and marketing
space several years ago called Truepresence.
That business unit has a new management team and is growing
rapidly. Tom also has several other businesses that he
continues to operate including his new data center at Baltimore
Technology Park."
"The
BulkRegister sale allowed me to take my stock equity in BulkRegister
and move it into domains and domain related
businesses. I am really enjoying developing new ideas that are
already bringing in lots of revenue for myself and my
clients," Rice said. "It was probably a good time for me to get out on my own as the
opportunities are considerable.
Advising
hosting companies, registrars and domainers on how to add even more
value in the domain aftermarket is the crux of my new consulting
practice, Domains For Media LLC,
so I look forward to remaining intensely involved in this area and
I hope that registrars and hosting companies start thinking and
improving. We bring them ideas they may have never thought
of.”
Rice
(at right) chatting with two friends who also have Maryland
connections, Howard
Hoffman (left) and fellow Baltimore resident and registrar
owner Richard Meyer (center)
"I don’t think some registrars are
maximizing the revenue they can make in the aftermarket. I know
from my work with several of them that a registrar or hosting company can
make $2.50-$4.00 per year in pure profit for each domain
name they manage as a registrar or reseller. That means a
registrar with 1,000,000 domain names under management (not to be
confused with names they own) should be adding at least $3 million
per year to the bottom line," Rice said. "These are astounding numbers
but easily attainable. People sometimes look at me
cross-eyed when I talk about numbers like that but it is a reality
for registrars and even hosting companies. It’s exciting to
apply my knowledge to these companies and see immediate results
when they follow a proven process.”
Given
his recent success it would seem unlikely that Rice would return to
another company’s executive suite, but he doesn’t rule it out
completely. “Most likely I will be on my own although you can
never tell in this industry," Rice said. "That’s the beauty of the
whole domain industry – you don’t have to work for someone or
be a huge company to create value and do extremely well
financially. One good idea can set your sails on fire –
quickly. Just look around. I love the innovation.
Whether it’s a new parking company doing innovative things or
someone building tools for domainers, something new seems to pop
up weekly…and many times it actually adds value overnight.”
"It
seems to me that the later you got into domains the more
innovative you are or have to be," Rice added. "I find some of the most
interesting conversations at shows like T.R.A.F.F.I.C.
with people who
are just a year or so into it and who are making big money.
There are just so many avenues including selling services to the
domain owners themselves to make your mark in this industry.”
While
domains have enjoyed a huge surge over the past couple of years,
Rice believes the bull market will still be running long after you
and I are gone. “I think in 80 years the chart for domain
performance will really look like the housing market for the last
80 years. You will see some little blips from changes in
technology, economic recessions and other things but over all you
will see steady increases in the value of good domains,”
Rice said.
| “Let’s
take Cameras.com (purchased for $1.5 million in
2006) as an example. Some might say it was a lot
to pay for a domain. I say, “who cares - it will be a cheap
price in ten years!” Cameras have been cameras for the
last 100 years and will be cameras for the next 100 years.
You might not monetize cameras.com the exact same way in 10 years
that you do now but you still own cameras.com and it costs you $7
to keep it up every year. Your initial investment might have
been the only expense you had to start a very lucrative
business," Rice said.
"Now look 30 years down the road when that domain has been paid for
long ago and you won’t see much problem with the $1.5 million
price. In fact everyone will be talking about the old days
when generic domains were “cheap.” It is not much different than
real estate I bought in 1995. Today’s market prices are the
future prices everyone would kill for. In 20 years we will
all wish we had bought cameras.com for $1.5 million in 2006!”
|
Sig
Solares
bought Cameras.com for
$1.5 million in October 2006
|
"Of course, that doesn't mean bad
domains are worth anything. Some people seem to think that
any domain they register is worth something. Many are not. It’s
really important, whether you’re starting out or established, to
have strategies to get to domains with consistent long term
traffic," Rice noted. "Where someone starting out, or even someone with
thousands of names already, will find success is in ascertaining
which domains they can acquire that have great generic traffic in
categories where the traffic will remain valuable for a very long
time."
"Another
thing for someone to understand is the simple fact that the market
is expanding, and so are opportunities and the potential for
creativity to result in payoffs. It used to be there were a
thousand or so domainers. Now you’ve got people coming at
it from all kinds of directions and they are finding new and
unique ways to make money. The point is that there are many
paths to profitability in the domain space so nobody needs to feel
like they have to follow exactly in the footsteps of someone
else," Rice said.
“In
the last 12 months I have taught 4 friends to buy revenue domain
names. In each case they have built portfolios that are
producing revenue of $2,500-$4,000 per month. They were all
new to domains. That itself is a testament to what is possible.
Where else could someone build a revenue stream so fast?”
Rice asked.
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Next
Page:
-
Why
Rice Headed for New Orleans Immediately After Hurricane
Katrina Hit When Everyone Else Was Desperate to Get Out
-
How
Rice Used One of His Domains to Help Save Thousands of
Dogs Abandoned in the Disaster Area
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