| Many
mainstream media outlets (who are steadily losing
advertising dollars to the web) were delighted with the
opportunity click fraud and other perceived Internet
advertising ills gave them to try to scare advertisers
away from going online. Many of the reports, particularly
in print media, blew the problems dramatically out of
proportion, something that Sedo.com’s Chief
Strategy Officer, Matt Bentley, found especially
irksome.
“In
2006, we saw the mass media outlets consistently and
dramatically bungle even the most basic domain stories. If
there was a raspberry for “Complete Incompetence in domain
reporting”, the 2006 edition would have gone to BusinessWeek.
First came a sensationalized “exposé” (and cover
story) last October which all but defined click fraud as
something involving a domain parking site, without ever
mentioning the legitimate business of direct navigation,
let alone conceding that the vast majority of domain
parking sites generate highly valuable traffic for
advertisers. Then last month BusinessWeek followed this up
with an article (The Great Internet Brand Rip-Off)
which indiscriminately lumped domain tasting with
cybersquatting and phishing, as if the latter two were an
inevitable result of the first,” Bentley said. |
Matt
Bentley
Chief Strategy Officer
Sedo.com |
“But
perhaps the most irking media blunder in 2006 was their incessant
focus on “domain kiting." This term, invented
by GoDaddy CEO Bob Parsons, tries to equate domain
tasting with check kiting and other forms of prohibited fraud.
Again, domain tasting is an issue which needs to be addressed, but
“domain kiting”, the repetitive add-drop of the same domain
names every 5 days to avoid paying for them, is at most a small
minority of the registrations being deleted in the add-drop cycle,
not the intent of the practice as the media consistently
suggests," Bentley said. "The intent of domain tasting is to identify domains that receive
traffic, and then return the remaining domains after the 5-day
“tasting” period. In other words, tasting has over the past
years generated millions of legitimate paid domain
registrations,
a fact which may have been omitted in Bob Parson’s comments on
the subject because, well, they weren’t through his company.”
Bentley
believes it is critical for the domain industry to start
counteracting calculated attempts to tar a business that is
steadily taking ad dollars away from the media critics who operate offline. “The
greatest challenge we face in 2007 is
improving the perception of our industry in the public eye,"
Bentley said. “In the past year we managed to shift the
public’s conception of domain investors from “cybersquatter”
to “typosquatter”, “phisher”, or “domain kiter” –
hardly an improvement! Even the rare positive pieces on domain
investing tends to portray domainers as “cowboy
entrepreneurs”, living large, partying hard, and exalting the
fortune made quickly and easily."
|
|
“In
2007 we need to begin presenting the new faces of the
domain industry: entrepreneurial visionaries who are among
the first to grasp new trends on the Internet and
elsewhere... Sophisticated technology companies whose
automated website generation technologies harness content
and relevant advertising feeds to create millions of
genuinely useful, highly-targeted “micro-vortals”...
Direct navigation as a viable alternative to search
engines for finding what you’re looking for.... and
perhaps most importantly, traffic from domain parking
sites as a source of quality, highly-targeted visitors
that bring significant value to advertisers.” |
“These
are the goals that we need to pursue, and the image that we need
to present to the public, if we are to continue in 2007 and beyond
the kind of booming success we enjoyed in 2006,” Bentley said.
|
Another
troubling issue that arose in 2006 was ICANN’s
apparent marriage to domain registries who were handed lopsided new contracts
at the expense of domain
registrants around the world. Frank Schilling, who
heads Name Administration, Inc. (and is regarded by
many to be the world’s most successful domain investor)
said “In 2007 domain registrants will have to plan and
organize against the trifecta of unscrupulous registrars,
registries intent on pricing registrants out of the
renewals on their hard won intellectual property; and
other covetous latecomers who unfairly try to unseat
registrants from their generic names.”
“The
pendulum always swings both ways however and I think there
will be significant, multifaceted pushback on any
bold-faced inequity. The stakes and number of industry
participants at this later stage have just grown too large
to permit one-sided or unbalanced outcomes,” Schilling
said. |
Frank
Schilling
Name Administration. Inc. |
To
that end, Name Administration and several other major industry
players, including iREIT, Sedo, Oversee.net and Straat Investments
are putting their money where their mouths are by coming together
as founding (and initial funding) members of the new Internet
Commerce Association. iREIT’s Bob Martin said “The
ICA is a non-profit organization devoted to protecting the rights,
interests, equality and assets of website property owners.The ICA
stands for:
1) Widespread recognition that direct navigation traffic and domain
names are valuable assets with validation for the internet
advertising, pay-per-click business model.
2) Fair and balanced property rights and protections relating to the
ownership of domain names and web properties.
3) An established medium to participate fairly, equally and openly in
the discussions regarding Internet governance, ICANN, and rules
and laws.
|
Phil
Corwin, Legal Counsel
Internet Commerce Association |
You
will hear much more about the ICA in 2007 when a general
membership drive will begin to, among other things, help
retain Phil Corwin, the veteran legal counsel and
lobbyist currently representing the ICA in Washington,
DC and to help enable the hiring and retention of a
full time Executive Director for the organization.
(Disclosure: DN Journal Editor/Publisher Ron
Jackson serves on the ICA’s Board of Directors).
While
Name Administration’s Schilling has been devoting a lot
of time to helping get the ICA off the ground he has
continued to keep a close eye on the domain business and
made these predictions for the year ahead:
- PPC
advertisers will have to spend more and work harder to
convert leads to sales in a flattening economy and
against greater competition.
- Large
scale traffic arbitrage will continue to negatively
effect CPC across certain PPC marketplaces and
keywords.
|
- 'Break-up
value' considerations will increase domain portfolio sale
multiples from historically accepted 'PPC revenue multiples'
alone.
- The
secondary market for domain names will become "the
primary market" in 2007 (based on dollar volume).
- 2007
will see domainers rebrand their companies as 'lead-gen
networks', 'social networks', 'secondary marketplaces', 'micro
search engines', 'Wikis' and other newfangled monikers.
The engine behind the curtain of these "new Web 2.0
companies" will continue to be the same: "Generic
domain names with lots of built-in, targeted traffic".
Schilling
and Ari Goldberger are on the same page here (in addition to being a
top domain attorney, Goldberger is active on the business side of
the industry as a co-owner of PPC company SmartName.com).
| "I expect
2007 to usher in new forms of advertising models that go beyond traditional
PPC, such as contextual advertisers for Web 2.0 applications, as well as a
greater focus on pay for conversion as advertisers continue to demand more
bang for their buck," Goldberger predicted.
"On the other hand, advertisers may begin to recognize
that advertiser value is more than just converting an eyeball to an
immediate sale," Goldberger said. "As the desktop (and cell phone) continues to eclipse the
living room TV as the most important media vehicle, advertisers will
use the Internet to build long term brand value as they have with so-called
traditional media. Once Madison Avenue comes to this realization, the
value of Internet advertising will skyrocket – and with it the value of
domains. 2007 might be the year for that!"
|
Ari
Goldberger (left) with
SmartName.com partner Larry Fischer |
Moniker.com
CEO Monte Cahn is another industry veteran who
believes the domain bull still has a long way to run. "Values will continue to
rise, bringing even more awareness and, in turn, dollars
to the space. I predict that as more high-profile sales
occur, marketers, advertisers and many more individual
investors will finally start to see the value of owning
and investing in domains, bringing the idea of domain
asset management out of the shadows and into the
mainstream,” Cahn said.
“With
greater awareness also comes misunderstandings about our
business from those who are unfamiliar. We as an industry
need to make the effort to educate the marketplace about
the benefits that domains offer."
“I
also think there will be a large movement to full or
partial domain development for domainers this year. The
popularity of conferences such as T.R.A.F.F.I.C. (the
real-estate owners), WebmasterWorld and Affiliate
Summit (the real-estate developers), and Search
Engine Strategies (customer conversion, search engine
optimization, and customer acquisition) will start to
converge together." |
Monte
Cahn
CEO, Moniker.com |
Cahn
said, "The
valuable information gained by these conferences will educate and
help domainers/investors diversify their domain development
strategies and target their domains by industry and category based
on what names to monetize on PPC, or whether to develop micro
sites, affiliate sites, and/or full development web site
offerings. Beyond
that, there are a few other areas that deserve mention:
-
As
more individuals enter the industry and values continue to
appreciate, we expect to see more demand for domain financing
options and solutions.
-
Mergers
and acquisitions will continue to affect the industry in a
positive way through both consolidation and investment
capital. It’s likely to be another active year in
2007.
|
Auctioneer
Joel Langbaum
conducting the Moniker Live Auction
at T.R.A.F.F.I.C. East 2006 |
Cahn’s
company stages the wildly successful live domain auctions
that have become a staple at the T.R.A.F.F.I.C.
conferences (they will also be doing one for the adult
domain industry Jan. 17 at the Internext Expo in Las
Vegas). “These auctions raised awareness surrounding
the domain industry with high-profile sales and highly
desirable inventory,” Cahn said, “In addition, the
Moniker Live Domain Auctions helped set prices for virtual
property in a public marketplace. As lucrative
transactions begin to take place in public, it’s a
critical reminder of how valuable the domain aftermarket
is.”
“The
live auctions also helped all domain holders regardless of
their participation in these events, as the events
increased the value of domains in all extensions
worldwide. Major records were broken at these events
with the sale of the largest .mobi name - Flowers.mobi
for $200,000, the largest .net name - Sex.net
for $450,000, and the largest name ever sold in
live and silent auction history - Cameras.com
for $1,500,000.” |
The
Cameras.com and Flowers.mobi sales were made during
Moniker’s live auction at the T.R.A.F.F.I.C. East conference in
Florida in October. The T.R.A.F.F.I.C.
shows, staged by Rick Schwartz and Howard Neu, have
played a pivotal role in generating mainstream investment interest
in domains. Neu told us “2006
was a watershed year for T.R.A.F.F.I.C. The conference in
Santa Clara, California, T.R.A.F.F.I.C.
Silicon Valley, planned in just 90 days, set an
attendance record and was kicked off with a huge cocktail party at
Google headquarters. For the first time, the banking and finance
industry took notice of domains and participated with give and
take in the conference. It marked the beginning of the
expansion of the industry, but also meant that we had to say
goodbye to the smaller venues that had treated us so well.”
“T.R.A.F.F.I.C.
West 2006, held once again at the beautiful Venetian
Resort & Casino in Las Vegas, became the first domain
conference ever to gather 500 persons in one place to network and
talk about domains. In conjunction with Moniker.com, the auction of domain names led to over $2
million in
domains sold. Then T.R.A.F.F.I.C.
East 2006 was held for the first time at the world
class Westin Diplomat Resort in Hollywood, Florida. Once
again, all attendance records were broken, with at least one-third
of the attendees new to T.R.A.F.F.I.C., though hardly new to the
industry,” Neu said. "At that show, the biggest domain name
auction to date resulted in more than $5 million in domains
changing hands.”
| Neu
promises more growth in 2007, even though the conference
schedule will be more crowded. "Imitation is the
sincerest form of flattery - the success of T.R.A.F.F.I.C.
is leading others to try to replicate the formula, and it
remains to be seen whether or not those attempts will be
successful,” he said.
“More
and more people are being lured by the success of
domainers who have sold individual domains or portfolios
for substantial gains. The "business" of domain
investing and development is where we intend to
concentrate our efforts which seem to be paying off as we
presently have the largest advance registration for T.R.A.F.F.I.C.
West 2007 that we have ever had. It will be held March
5-8, and will be showcased by the Venetian Hotel &
Casino in new beautiful ballrooms they recently
completed.”
“For
the first time ever, domainers will be meeting in New
York City at the impressive Hyatt Grand Central
in the heart of Manhattan from June 18-22 at T.R.A.F.F.I.C.
New York with its emphasis on bringing Wall Street and
Madison Avenue into the mix. In conjunction
with our overall sponsor for 2007, TrafficZ, the
excitement of the Big Apple will blend nicely with the
investment community and the advertising gurus in
spotlighting domains as a great investment and a
profitable business,” Neu said. |
Howard
Neu
T.R.A.F.F.I.C. Co-founder |
“Finally,
to top off the year, T.R.A.F.F.I.C. East 2007 will once
again be held at Florida's magnificent Westin Diplomat Resort in
October. Because we keep the programs fresh and interesting
without repeating ourselves, the theme of that conference will not
be determined until much later this year. However, I can guarantee
that whoever attends will get more out of it and will do more
business than ever before. For all of these reasons, I believe
that 2007 is going to be the best year ever for domains, domain
investors and domain developers.”
Next
Page:
-
The
Man Who Sold Vodka.com for $3 Million:
Roy Messer Makes His Predictions for 2007
-
Robert
Alfano Wants to Loan You Money to Buy Domains!
-
CEO
Tim Schumacher Breaks Down Sedo's Big Year
-
EuroDNS
VP Frederick Schiwek Makes the Case for ccTLDs
-
The
Domain King, Rick Schwartz, Gets the Last Word!
Continue
to Page 3 of this story
Return
to Page 1 of this story
|
