Archive for April, 2009

Ad.com sells for $1.4 million

Published by
Dominik Mueller
April 30, 2009 in Domain Names. 1 Comment

The domain name Ad.com was sold in Moniker’s live domain auction for $1.4 million yesterday. The auction was held at the TRAFFIC Silicon Valley conference. Overall, the live auction netted $2.1 million, so the Ad.com sale makes up more than half of the total proceeds.

I think Ad.com is a good sale at that price, both for the buyer and the seller. Some might say the domain is worth more than that, but selling a domain in the million-dollar range in today’s economy is pretty good, in my opinion. It has been reported that the buyer is Directi. but this hasn’t been confirmed, yet. Directi is a fast-growing domain company with more than 550 employees and an estimated value of more than $300 million. Its business units include Skenzo, LogicBoxes, WebHosting.info and ResellerClub.

What’s great about Ad.com, is that it’s both a generic domain and a two-letter domain that could also stand for other meanings apart from the obvious advertising relation. Considering Directi’s company structure, the company may be going to develop the domain into a new business website, hence being an end user rather than a domain reseller, which could explain the relatively high sale price. But again, it has still not been confirmed that Directi is really the buyer of the Ad.com domain name.

In any case, Moniker’s domain auction can already be considered as a success, because almost 50% of the inventory was sold, which is a solid outcome. There were no other sales in the six- or seven-figure range, though. The second-highest sale of the live auction is BottledWater.com at $45,000, followed by Athletic.com ($40,000) and Vixen.com ($32,500). The official results of the auction can be found on Moniker’s website. The domains that did not sell in the live domain auction will be up for sale in the extended online auction together with other domains that didn’t make it into the main event.

Worthless Domains Don’t Pay

Published by
Dominik Mueller
April 29, 2009 in Domain Names. 0 Comments

Many domain investors own large portfolios that don’t generate enough income from domain parking or sales to cover the portfolio’s overall annual renewal bill. This is especially the case with a lot of folks new to the industry. It is a wide-spread misconception that holding a large portfolio is key to success, because it’s not quantity but quality that pays.

When acquiring domain names you should not exclusively look for speculative domain investments that may or may not provide a cash flow far into the future, but you will want to build a steady revenue stream as soon as possible. At the very least, it makes sense to invest in domains that can quickly be sold if needed. In general, domains are not as liquid as most other investment opportunities. Stocks are a lot more liquid, for example. Therefore, picking the most liquid investment-type domains helps when holding domains for their speculative name value as opposed to owning revenue domains, which are relatively easy to resell in the secondary market. Because if you owned only illiquid investments, it would be very difficult to get your investment back or exit the market when you want or have to.

But it’s also important to have a certain number of traffic domains in your portfolio. You can then use these revenue domains to support your speculative domains (= domains that only have a vague chance of selling for a profit at some point in the future). Traffic domains can also function as the basis for steady cash inflows.

Don’t fall in love with your domains, however. If you’ve been the owner of a domain for, say, five years without having succeeded at selling it, delete it if you can’t make any money from it by the expiration date. It sucks to waste ~$50 for the five years of registration, but the registration fees paid in the past are sunk costs. You won’t get the money back by continuing to renew crappy domains. Instead, you would be throwing even more money away by renewing domains that are not worth it. So, if a domain doesn’t have any value to you, if you can’t sell it at a profit and if it doesn’t make enough money to cover its annual renewal fees, try to sell it for a lower price and be prepared to let it drop if you can’t find a buyer by the expiration date.

For example, if you own a portfolio consisting of 100 .com domains, you’re likely to pay around $800 per year for that portfolio. I have seen many domain portfolios of that size and bigger that consist of 99% worthless domain names I wouldn’t even register if they were available. And still the owners of those portfolios usually refuse to let even the least valuable domains drop because they don’t want to lose the registration fees they have already paid in the past! This doesn’t make sense and it happens only if you fall in love with your (objectively worthless) investments.

If domaining is not just a hobby to you but if you want to make money off it, see your domains for what they are: Investments. They are not your babies and you will not hurt them when letting them drop. (I know some domainers out there will disagree with me on this one.)

It’s true that accurately evaluating domains is very difficult, because domain values depend on so many factors and they’re still a new type of investment. There are no proven methods of appraising domains like there are for real estate, for example. But the longer you have been in the business the better you get at distinguishing good domains from bad ones. This gut feeling is essential for developing your individual domain portfolio strategy.

To sum things up, take a close look at your portfolio and try to spot domains that you do not need and that are unlikely to make you money in the foreseeable future. Then try to somehow squeeze dollars out of those domains before they expire and if you can’t, get rid of them. Consider them as sunk costs or a learning experience and move on. Domains are investments and as such they also incorporate a certain amount of risk. Not every investment will yield a positive return, therefore it’s important to have an exit strategy in place to get out of those investments where the risk is out of proportion to the expected value. Traffic domains are a good way of building a steady revenue stream. They’re expensive to acquire nowadays, but you may be able to find affordable but good traffic domains every now and then. Use them to pay at least a part of the renewal fees of your purely speculative domain investments, that is domains that don’t receive traffic but may have some name value. (Another possibility of monetizing otherwise unprofitable domains is to develop them, but I will write about domain development in another article.) Also make sure that the speculative domains you hold are as liquid as possible. That means there must be a market for those domains. Otherwise, they are a very tough sell and may be too risky to keep. You cannot pay your bills with worthless domains, you need regular cash flows that you can depend on when planning ahead and growing your business.

Yahoo sells WP.com to WordPress

Published by
Dominik Mueller
April 27, 2009 in Domain Names. 4 Comments

WordPressAutomattic, the parent company of WordPress, is the new owner of the two-letter domain name WP.com. The domain was previously owned by Yahoo.

WP has been widely used as the acronym for WordPress for a long time, so it was a good decision to acquire the domain. Matt Mullenweg of Automattic writes on the official WP blog that Automattic had been trying to buy WP.com from Yahoo for about five years, until they finally succeeded a few days ago.

A sale price has not been reported yet, but it’s likely that the sale of the domain will be included in Yahoo’s quarterly report, so we may find out more about this domain sale soon.

In addition to WP.com, Automattic also purchased Blo.gs from Yahoo. Blo.gs is a ping-updating service for bloggers, which was acquired by Yahoo in 2005 but never really got off the ground. It still has a large user base, though. According to Mullenweg, the Automattic crew is going to give the service “a refresh, while continuing its reputation for reliability”.

These sales may be a sign of Yahoo concentrating on its search and online advertising business, while also raising much-needed cash. Yahoo is still struggling for a bigger share of the search engine market, so using more energy for its core business is a wise decision, in my opinion.

(Sources: WordPress Blog, Matt Mullenweg, Toni Schneider)

Domain for Sale: JohnMaynardKeynes.com

Published by
Dominik Mueller
April 21, 2009 in Domain Names. 0 Comments

John Maynard KeynesThe domain name JohnMaynardKeynes.com is currently for sale at SnapNames. *Update: Domain has been sold.*

I enjoy reading about economics, so I was quite lucky when I got the chance to buy this domain name. But, as often is the case, I later realized that I would’t have enough time to write quality content for a good website about this well-known British economist. Therefore, I decided to put it up for sale at a low reserve price, so another person would get the chance to fill this domain name with life.

John Maynard Keynes is considered to be one of the fathers of modern macroeconomics. As I see it, Keynesian economics have once again become increasingly popular since the financial crisis of 2008.

To give you a bit more information on the domain name:

Google finds 861,000 websites for the exact quoted search term “John Maynard Keynes”, and more than 13 million for “Keynes”. According to the Google AdWords keyword tool, the search volume for “John Maynard Keynes” was about 40,500 in March, more than 300,000 searches were performed for the keyword “Keynes” in the same month. The estimated average cost per click (CPC) is $0.32 for “John Maynard Keynes” and $1.57 for “Keynes”.

Domain Extension Guide

Published by
Dominik Mueller
April 20, 2009 in Domain Names. 3 Comments

This article very briefly explains what exactly a domain extension is and what extensions you can choose from when registering a domain name. It also points out what country the various local extensions belong to.

Structure of the article:

- Domain Extensions Explained
- Generic TLDs
- Country-code TLDs
- Changes in the TLD System

Domain Extensions Explained

As the name says, the domain extension can be found at the very end of the complete domain name. For example, if you look at the domain Internet.com, the .com part is the extension.

The domain extension is the top-level domain or TLD. It is managed by a domain registry, where domain name details are being stored and organized. The registry responsible for the .com TLD is VeriSign. (If you’d like to know a bit more about top-level domains and sub-domains, please take a look at this guide’s Introduction to the Domain Name System article or go to the Domain Name Glossary.)

There are also different types of top-level domains, namely generic TLDs and country-code TLDs. Generic TLDs (gTLDs) are, for example, .com, .net and .org. They don’t have any regional meaning and can be registered from any country in the world.

Country-code TLDs (ccTLDs), on the other hand, belong to one specific country. For instance, the popular .de TLD is the official domain extension of Germany, .us belongs to the United States and .uk to the United Kingdom. Some ccTLDs are fairly restricted, so that only residents of that particular country can register domains under that country’s TLD. Then again, there are also country-code TLDs that are not as much regulated and therefore more widely bought throughout the world.

Please find a list of the web’s most important generic and country-code top-level domains below:

Generic TLDs

.aero Aviation
.biz Business
.com Commerce
.edu Education
.gov Government
.info Information
.mil Military
.mobi Mobile Internet
.net Networks
.org Organizations
.travel Travel
.name Names of Private Individuals
.museum Museums
.pro Professionals

Country-code TLDs

(This list contains merely the most important top-level domains as measured by the number of active domain registrations. All in all, there are more than 100 ccTLDs on the Internet.)

.at Austria
.au Australia
.be Belgium
.ca Canada
.ch Suisse
.cm Cameroon
.cn China
.cz Czech Republic
.de Germany
.dk Denmark
.eg Egypt
.es Spain
.fr France
.gr Greece
.ie Ireland
.in India
.it Italy
.jp Japan
.li Liechtenstein
.nl Netherlands
.pl Poland
.pt Portugal
.ru Russia
.se Sweden
.tr Turkey
.tv Tuvalu (often used as generic TLD for “television”)
.uk United Kingdom (often used as .co.uk)
.us United States of America
.ws Samoa (often used as generic TLD for “website”)

It’s also important to note that there are geocentric top-level domains that are not restricted to one country only. For example, there are .eu (Europe) and .int (international).

Changes in the TLD System

In 2008, ICANN decided to open the TLD space so that in the future you would be able to create your own generic top-level domains. The specific rules and application procedures for such a custom TLD have not yet been agreed upon as of the time of this writing. There is a lot to be discussed, indeed. Many companies fear that ICANN’s decision to open up the TLD system will open the doors for cybersquatters who will establish domain extensions which they will then use in bad faith for the monetization of typo traffic. This would lead to additional legal expenses for trademark holders. ICANN will most likely agree on a bunch of restrictions in order to avoid too much headaches for TM owners, and to avoid other negatives. It’s already known that there is a strict entry barrier because you must pay around $200,000 just for starting your own TLD. It is therefore expected that it will mostly be major organizations and public corporations that will be making use of ICANN’s new naming system. For instance, Google could start its own registry with .GOOG, there could be .MSFT, .AAPL, or generic extensions like .BERLIN, .LONDON, .NYC, .XXX, .SEX and .MONEY.

« Previous Entries

View Dominik Mueller's profile on LinkedIn

View my profile on Facebook

XING


Domain Names (PPC) - TOP.ORG

Archives