Worthless Domains Don't Pay

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.

Domain Strategies launches Tanning.com

Tanning.com, LLC and Domain Strategies, Inc. announced today the launch of a new marketing and information portal designed to educate consumers and generate leads for tanning salon owners at www.Tanning.com. The new site was developed to help people make moderate and responsible choices about sun exposure while helping new customers find the tanning salon that best meets their needs.

“After speaking with dozens of tanning salon owners, it was clear that they wanted help using the internet to get the word out about their products and services.” Explained Joe Snell, CEO of Tanning.com. “We paired the best domain name in the space, Tanning.com, with a site that contains objective information about tanning, a national directory of tanning salons and an innovative model for sending new customers to the salons. It’s a win-win-win for everyone involved.”

Some of the advantages salon owners will enjoy by partnering with Tanning.com include:

  • A customizable profile page to highlight the unique aspects of their products & services at the individual store level. Especially important for tanning franchises
  • Inclusion in the most comprehensive directory of tanning salons in North America
  • New customers due to the search engine marketing and brand building planned for the Tanning.com domain.
  • Assocation with an objective source of tanning information which will drive both visitors and new customers for reputable salons.

Domain Strategies partnered with Q3 Capital to create Tanning.com, LLC with Q3 Capital contributing the domain name and Domain Strategies contributing startup capital, executive leadership, business planning, hosting and business development relationships. Joe Snell, a seasoned internet entrepreneur with four previous companies under his belt, came on board to research the industry, define the business and build a site that will grow in features, depth and revenue over the coming years.

Domain Strategies was founded by Rob Monster of Monster Venture Partners. Mr. Monster founded GMI (Global Market Insite, Inc.) and is winner of the 2005 Ernst & Young Entrepreneur of the Year award in Technology and Software (Pacific Northwest).

Domain Strategies Launches Slideshow.com

From a Parked Domain to Business Poised for Growth in 45 Days.

Slideshow.com, LLC and Domain Strategies, Inc. announced today the launch of a new internet business - Slideshow.Com – created to be the foundation for a growing business offering a secure platform for posting, sharing and publishing presentations and pictures online.

Gil Benatar, aka “Mr. Slideshow”, contributed the domain name Slideshow.com to the Slideshow.com, LLC joint venture owned by both Gil and Domain Strategies in June 2008. “I was interested in building a great business on the Slideshow.com domain and the approach by Rob Monster and Scott Fasser of Domain Strategies was the perfect fit for my situation.” Explained Mr. Benatar, “The fact that we were able to research, plan, build and launch a relatively complex site within a couple of months was very impressive.”

Domain Strategies is spearheading a partnership model with owners of premium domains to combine the strong branded domain name and industry know-how, with the site development, capital and business relationship expertise of Domain Strategies. Scott Fasser described the process this way, “We combined technology from Identity.net for single sign-on, iPaper for publishing from Scribd.com, open source image management, as well as proprietary content in order to create Slideshow.com.”

The funding for Slideshow.com has come from Seattle-based Monster Venture Partners, led by Rob Monster, the company’s Managing Director.

“Gil has been an ideal business partner for this venture, not only because of his contribution of the premier domain name in the space, but also for his 20 years of knowledge and expertise in the development of presentations and communication tools. The initial site is a foundation for growth into the premier online utility for posting and sharing presentations in a secure environment using the Identity.net user management framework.” explained Rob Monster.

Article Selection - Dec 11, 2007

Nice Guy Finishes First: How Frank Schilling Won the Domain Race After Starting at the Back of the Pack

If there is any man in the domain business who truly needs no introduction, it's Frank Schilling. By now just about everyone has heard the name, read the blog and marveled at the numbers. He owns hundreds of thousands of high quality generic .com domains and annual revenues for his closely held Cayman Islands company, Name Administration, Inc. are estimated to be in the $20 million range. Despite enjoying a level of success that would turn most people’s heads, Schilling, now 38, remains unchanged and is universally regarded as one of the nicest people in this (or any other) business. These are all things you have likely heard before, but to borrow a line from Paul Harvey, now it’s time to tell “the rest of the story.”

Another well-written DN Journal cover story by Ron Jackson. So, click here to read the rest of the story.

Don’t Lose Your Ass By Failing to Properly Monetize Your Domains

Domains that are worth over $100,000 are essentially unique, branded small businesses. You can choose to ignore them and leave them idle, or place an enormous amount of resources on each, or somewhere in between. In any case they are ongoing business concerns which should be respected and managed accordingly.

Pretty good guest post on Domain Name News by private equity group WashingtonVC's Michael Mann. As chairman and founder of WashingtonVC, Michael, who has also been the founder of BuyDomains, knows a lot about the domain industry and about the monetization of domain name traffic. In this post, he explains why you're leaving money on the table if you own generic domains but don't develop them. Must read!

Become the Next Domain Name Multi-Millionaire - Learn the Domain Secrets of the Experts

Jeff of Domain Bits compiled this article with experts' advice on how to become a successful domainer. The people interviewed are, i.a., Frank Schilling, Andrew Alleman, Sahar Sarid, Peter Askew, Michael Gilmour, Elliot Silver, Mark Fulton, W. H. Abdelgawad, Shawn Hartley and Anthony Noe. All in all, Jeff's post includes some good advice for beginners.

Domain Development Corp. Names Sean P. Moriarty as New President

Agoura Hills, CA (PRWEB) November 13, 2007 -- California-based Domain Development Corp (www.ddc.com), a comprehensive monetization and full-scale domain development service, today announced that Sean P. Moriarty has been appointed the company's new President. Moriarty comes to DDC from Yahoo!, where he was in charge of managing Yahoo's off-network domain monetization business.

Today's announcement comes as DDC continues to develop its domain portfolio and enhance its product offering with the launch of version 2.0 of its Power Parking technology. In addition, DDC recently made news when they facilitated one of the largest domain sales of all time, a $9.5 million private transaction. This landmark domain sale extended DDC's presence within the rapidly growing domain industry.

"Sean's experience, proven leadership and extensive knowledge of the domain space provides an invaluable advantage to DDC as we continue to grow and innovate," said Ken Lawson, company founder and CEO. "Sean and I share common goals for creating a leading-edge domain management service, and I am excited to work with him to make DDC the most competitive platform in the market."

Over the past 10 years Mr. Moriarty has worked in consulting and sales leadership positions in private equity backed emerging growth companies: Vividence (acquired by Keynote Systems) and PlaceWare (acquired by Microsoft). For the last four years, Sean has worked at Yahoo! where he managed the consumer software channel and subsequently the domain channel. In addition to managing all of Yahoo's key domain partnerships, Sean was integrally involved in the product development and marketing strategy that enabled Yahoo! to maintain its leadership position in domain monetization.

Moriarty commented, "I am excited to be back in a small company environment, working with an intelligent and passionate team that is nimble and focused on execution. Our mission is to enhance the experience of parked sites for visitors, owners and advertisers. In addition, we plan to continue to build on our comprehensive development efforts as we evolve suitable domain names into internet businesses."