More on DDN Buying Strategy

Bob Luther writes...

""The Domain Distribution Network sounds great, but I would use caution in speculatively buying names in anticipation of demand.

I've been in the business of selling web services to small-to-medium sized businesses since 1996, and have a sales force on the street, visiting local businesses every day.

Yes, we all agree that it would be so logical for these business owners to want to have these 'logical' geo-generic domains...not necessarilly to use as their business name, but as a valuable extra marketing tool.  But that concept....and reality...can be far different.  The percentage of business owners that 'get it' is small.  You can offer them a killer generic name and they will often have no interest whatsoever (or at least nowhere near enough interest to cut you a check).

I'm not saying those won't sell....just suggesting that this is a big 'numbers game'.  It may be that for every hundred situations (or domains in this case) that seem like they make perfect sense, only one purchaser will step up and purchase; as opposed to all one hundred of them, or any number close to that.

It might be worth it to do a test yourself.  I saw one name mentioned in the comments here that was (smalltown)lasik.com.  In a medium sized town, there might be five doctors who do lasik eye surgery. So, go do a  quick visit to the office of each one, or ring them on the phone. Ask if they would be interested in the domain (theirtown)lasik.com.  You might be surprised at the responses.

For the holder who has 100,000 names and already has the PPC income to profitably carry his portfolio, the probability of sales from DDN is going to add some nice cash flow for him. On the other hand, the guy who goes out on a limb (using credit cards to buy domains, and anticipating cash flow to pay back the credit card, the interest and the eventual domain renewals) and buys 1000 names may find that there are far fewer sales then he anticipated; and the reg fees could actually be overwhelming to the plan.

I think the Domain Distribution Network is going to be a terrific platform, but I would be careful in terms of expectations of results."'

Comments

[Jack]

Observation is spot on. Good take.

[Cameron Johnson]

This is a very wise man. I couldn't have said better.

[DP]

I completely agree with the poster here, based on the situation today.

You don't make big money buying something when everyone "gets it". You make big money buying before them and waiting.

So, the real question, do we think they will ever get it? Personally I do, and don't mind waiting a while.

[Adam]

I agree with these points on the geonames. There's going to be a lot of drop activity come June 2008. However, I don't think speculation in this should be just about buying geocentric generic domains "to use as their business name" or even as "a valuable extra marketing tool."
It's also about other domains that individuals may want in the future and business may want as well. How many businesses are named "AAA something" "diamond something" and how many might or may eventually consider those names in the future when creating their small business. Every day, hundreds of thousands of new small businesses are created and thousands of those go online trying to figure out the best name to pick. Millions of new internet users decide to put up their own site online as well. It's speculating in advance of this and figuring out what they may want that will ultimately bring the most success.

[Patrick Kerr]

Generic is king in my opinion, here's why: when someone searches for a plumber--i believe they do something like this on their search engine: kansas city plumber enter now if you are a plumber in kansas city and you own kansascityplumber.com you will come up first on the search engines or you could be directly navigated too---that is the value of generic ---people search by generic so they dont have to remember brands, endless names etc. --it's how the language works ----grandjunctionplumber.com i would think is going to be a lot more valuable than aplusjimsplumberco.com----by the way i think any city+plumber.com is going to be GOLD-----why? plumbers are almost always searched by locale,usually called by everyone at least once in a while, usually fairly urgent, and usually charge quite a bit relative to other repair type services city+plumber.com if i could i buy every single one in the country----as is a have probably one hundred or so----plus many other name types--------(my heirs are counting on you frank ;-) )---pk

[Robb]

I think those were a few good points that lots of us were thinking. You have to have the resources to buy a lot of names and the time to wait for the buyers.

[Adam]

Patrick, we aren't talking about what people search for here any more, although those are good names no doubt. I have a few plumbing city domains. What I'm talking about is what people buy when they go to register their first domain not what their customers search for. . . That's my whole point. The people buying domains don't consider what people are going to type in or search for when they go buy domains for the first time. Think about the first domain you probably registered. For example: If I'm Phil Jones and I live in Topeka and start my own plumbing company, Im going to name it Phils Plumbing or Jones Plumbing and my first inclanation is to buy PhilsPlumbing.com or maybe JonesPlumbing NOT TopekaPlumbing.com. Sure if I'm Phil I should buy that domain too, but that's not the customers thoughts when they buy their first domain OR when they name their business. See this through the eyes of an indivdual or a small business buying their first domain name ever and you'll understand what I'm talking about here. This isn't meant to devalue or criticize great geo-keyword domains, as I have tons of those too. It's meant to point out the difference between selling to a buyer at a registrars "main gate" and the an intelligent buyer who is focused on keywords and targeting a market online. . . most average Joes simply have to get over the first hurdle and that's registering their .com business name.

[Adam]

One surefire way to tell if you are on the right path to uncovering these gems is to run a large list. . . if you see a majority of them are taken and the nameservers are fabulous.com or 15x.net and you find a few still available, register them !!

[Robert]

To the above poster... if you are considering "type-in traffic" you must forget about search engines. Two different things. As a search engine play this may not be the most fruitful scheme as, taking the example above, LASIK can always create 2000 subdomains at cost zero (denver.lasik.com) and redirect to the proper outlets getting traffic from prominent serps. It will be difficult to compete with such large site from a seo point of view... So type-in it is.

[Adam]

This shows available as of this minute:
http://whois.domaintools.com/grandjunctionplumber.com
funny stuff. posting examples that aren't already registed ?.. but a population of only 28,000. I'll pass. good luck

[EdP]

I agree it is wise to proceed with caution. But over time, someone in each community will get it, and I know from experience, when there is a name you want (simple, .com, easy to remember), and it only costs you a relative small sum (xxx) to get it, you are relieved that someone else didn't get it, and it's yours for the taking.

[Dan Warner]

I completely agree with caution. I have nothing to gain by everyone registering thousands of domains that are unlikely to sell. Like Frank says, work hard at it and cultivate a crop that will stand the test of time. There is nothing worth having in this industry that is easy to come by - only blood sweat and tears. (mostly tears if your this late ;-)

Those with good domains already have their core portfolio. Buying anything now is a long term investment and you may loose for years. The domains we own now that are selling were mostly bought years ago with strict criteria based on mathematical metrics (mostly anyway :-)

Cultivate the grapes, harvest the fruit, and make good wine. Don't buy poor soil land in the process and end up with sour grapes!

Cheers,

Dan

[DP]

One of the domains mentioned a few times was NewarkLasik.com - one of my regs. Here's my thoughts on NewarkLasik.com, but really highlights my thoughts on all city:service domains.

- If/when the wider internet population "gets" why a generic domain is good, there will be demand. Keyword here is "if".

- When I search for Newark Lasik, the #1 result is a generic "superpages". Maybe it's just net lag, but that page took 20 seconds to load for me, and was a page of ads. There's plenty of adsense though, and one of my existing lasik domains gets $1-3 clicks.

- Search algorithms are getting smarter about geo-targetting results. When I search for "plumber" now I get the first few ads served for plumbers in Orlando (my home).

There is a lot of opportunity for smart development here. I saw the comment somewhere that probably only 5 companies in Newark do Lasik anyway. That might be true. Anyone searching for Lasik needs an eye test. They need a Glaucoma test. They almost definitely already have glasses or contacts, lots of product opportunities there. They are nervous, they wan't to hear from others who have done it. I've had it myself, afterwards they're going to need answers to questions like "Is it normal that reading my computer makes everything appear underwater?".

What else do we know about someone searching for Lasik? A percentage of them have the income to be able to afford it. A percentage of them have a certain amount of concern about their appearance - they want to lose the glasses, or they play sports and contacts just don't work for them. They don't mind considering non-essential surgery to improve their appearance or lifestyle. Throw a dating affiliate sidebar up there too while you're at it, maybe Lasik is a confidence boost for some.

Would you get a return from designing a site to meet these needs for Lasik is Newark? Perhaps not. But you design it right, and the time to get that second, third and subsequent city/service domains online is almost zero, change out a few banners, change out the metric users rate the listed companies on, change a few forum headings, done.

Not trying to present this as an easy path to riches here, it's hard work. But it's fun work, creative, adds something of value to some number of people and at the end of the day is all underpinned by a domain that calls out to someone looking for what the site is about.

This is too long already for a blog comment. Frank, ever considered putting a forum up behind the blog to discuss some of the posts at length? Most of what you write inspires much more discussion than blog feedback facilitates well....

[DC Domainer]

Ok. I am going to be the test case for this. I believe in the theory and might be able to turn this into something. I am a newbie (35 domains or so) and just registered half dozen DC and NY domains. (i.e. DCHardware.com, NYRepair.com)and will see how they do. I know it is a long shot on't have any real expectations but will report on the progress. I do think the public is way behind where they need to be but don't see a change for a few more years.

It is funny, I have been reading articles that have been saying we are running out of .com domains...AND THAT WAS WHEN THERE WERE 5 MILLION in the zone.

[John]

I spent a few hours today plugging search terms like Los Angeles plumbing into Google to get a feel for how AdSense would associate with the term. Each time, in addition to Ads and organics, Google presented a map with the name, location and link to local plumbers. I guess this is called Google Local? Anyway, thinking like a business owner, if I know Google is driving local search traffic to my site already, why would I buy a generic geo domain even if I did 'get it'?

***FS*** Because google can only display so many results on the first page.. and people would laugh at you if you drove around LA with a plumber-van with a picture of a google search box with the words.. "click fourth link down" .. A great domain like that helps you escape from the google platform/trap. Beyond that.. there's competitive fear of capturing every last lead and advantage over your competitors.. Do you get the obvious generic name that can deliver some measure of potential traffic.. or does your rival?

[Peter Denega]

Developing countries still offer good opportunities to purchase quality generic domains. It is my opinion that in many old civilisations the language culture is only just beginning to change due to the dominant search engines & text messaging teaching a new generation to abbreviate.
Linguistics are changing dictated in part by the international search engines.
Where three four or more words are used to describe a product or service it will be one or two

When registering a number of XXX domains I used proz.com the best free translation service on the web. Proz have hundreds of professional translators and residents worldwide that assist in translation. When requesting a translation the translators often come back with answers that are not in tune with simple search terms of one or two words (not that I have not made some stupid errors) This is an area where yes you have to wait for the chosen country to catch up in commercial terms but, registering autosales.com / autoinsurance.com............................. in civilized culture of anything over a population 40 million is better bet than rentamanandavan.com/ Place your bets.

[Peter Denega]

Bob Luther You're soooo right.

I approached a company that offers to franchise their business (bricks & mortar franchises) The company is a well known Italian brand selling luggage and leather goods.
I have the generic domains valigria.com = Luggage / pelletterie.com = all things Leather, bags , brief cases...... and flighttimes.co.uk / flightinformation.co.uk / flightenquiries.co.uk They did not see the point in offering goods online other than from the company website !!

On another occasion I approached a leading UK catalogue fashion retailer to discuss using the UK Domains : childrens.co.uk / childrensgames.co.uk / childrenstoys.co.uk / childrensshoes.co.uk / childrensshops.co.uk / childrensfashion.co.uk / and was told we are not interested in using other brands to promote our company !! it was at this point that I decided to hunker down for twelve months and come back later.

[John]

Frank said,
***FS*** Because google can only display so many results on the first page.. and people would laugh at you if you drove around LA with a plumber-van with a picture of a google search box with the words.. "click fourth link down" .. A great domain like that helps you escape from the google platform/trap. Beyond that.. there's competitive fear of capturing every last lead and advantage over your competitors.. Do you get the obvious generic name that can deliver some measure of potential traffic.. or does your rival?***

Wow! The image of the Plumbing van with a URL on the side really struck home. And if greed (fear of rival 'getting' the generic domain) ends up being a part of this, then these really will be exciting times. But now I'm wondering... In this sort of market, would I be better off with LosAngelesPlumbing.com, or might I be more likely to get some cash flow going with names like HermosaBeachPlumbing? i.e. At the niche level I bet competition is felt even more keenly, AND, I bet a smaller, 'community' geo would be perceived to have more value.
Thoughts?

***FS*** I like those sub-community names a lot.. but you really need to know which ones are big enough to support. Be careful out there.