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