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February 21, 2007

Comments

Frank

I was so late in domains. I was online in 1994 and actually had the thought when typing my 20th name that didn't resolve: "I wonder how you get that website name in .com?" I even worked for a small tech co in 1995.. Then I went back to some chatroom and surfing for porn. I could have just as easily missed all this. Rick Schwartz had made his fortune before I had good names. There is a book coming out which is quite evocative (I don't want to spoil that because I think it will be an interesting read) The catalyst moment was when Gary Chernoff (Friend of mine who was earlier in names than I) mentioned the Overture search tool. Big names (dictionary words) were gone but search terms (eatingdisorders.com etc) would expire or go to auction and nobody would really target these because they were not deemed that interesting. Many great ones were still available. I was really late. Being late in this space has actually taught me alot about market timing. In alot of respects it's better to be late than early. If you're too early you can miss it too by giving up when things might have gotten better or by not having momentum on your side. You'll be hearing alot about the 'domain book's' coming out on a forum near you as the year draws to a close. There are so many substories and inticacies that you might find fascinating about it that it does no justice to tell it to you now, in this venue.

Harvey Kaplan

My question:

When I take a trip to visit Cayman, do I get to share a beer with Frank? :)


**** For you Havey always F:)

Mike in Vancouver

Is it true or just an urban myth that you started the cinqo de mayo event at the Roxy in Vancouver?

Frank

That is true Mike! I beleive I'm also still the holder of Vancouver's Port Mann Bridge speed record.

Mike in Vancouver

Well Frank, if I ever come to the Caymans, maybe we can shatter the 7 mile speed record together!

***** sounds good sir! Its so slow you could sprint for it ;)

Sahar Sarid

Hi Franky,
I see you quite often you consult your wife about your business dealings ("The white house", fruit.net purchase, etc).
What are the relationship dynamics between the two of you when it comes to the way you invest, the things you do?

**** Same as any successful relationship I guess. I get to buy the car I want.. then she's the boss :)

Rob Sequin

Frank,

Since, you have some great Cuba domains and live so close to Cuba, do you have an interest in Cuba on any level?

Above Gabe mentioned something about successful investors being "all in" when everyone else is waiting on the sidelines. I like that quote since I feel that I am close to being "all in" with my Havana Journal and Cuba domain portfolio. I have been buying Cuba domains since 1998 and publishing the Havana Journal for four years. LOTS of time and money are "all in" for me.

If you do have an eye on Cuba, do you have any advice on how to play Cuba for the near future and/or longer term?

Thank you.

Rob

(Same Rob from SearchDomainsForSale.com :-)


***** Cuba is going to be huge if and when they open up. There are weekly flights from here.. you should go.. They do not stamp your passport.

Rob Sequin

Thanks. I have been there, legally on business on US Treasury license. Maybe TRAFFIC 2008 South... in Havana :-)

**** Ha! That would be cool!~

Russ

Hi Frank-

Why the love affair with .net domains?

-Russ

P.S. kudos on the blog, I hope you're still getting some "real work" done! ;)

***FS*** I like .nets cuz they have traffic.. and alot of the world that identifies .com names as US centric, prefers the agnostic .net (not to re-ignite the IDN debate, but alot people may find they have more success with .net in IDNs for the reason that theyu seem more international and non-us centric). Also .nets are relatively cheap so there is more headroom for relative appreciation. All things equal I prefer the .com tho.

JB

Hi Frank,

I really appreciate your blog, it is very insightful and brings very valuable information.

I'd like to ask you two questions, I'd like to hear your take on these:

1. Have you ever drilled down into the differences in demographics for a typical search engine user and a typical person typing in domains? My take is that the latter tends to have a bigger representation of females + tends to be of older age, do you see this the same way?

2. My second question sort of builds up to this. Have you noticed that different countries have different type-in bahaviour. My observation is that for example Americans are more likely to type in a domain name than a UK citizen (I am obviously taking into account the differences in populations here as well so the data can be compared). Also my belief is that when an American arrives on a landing page, he is more likely to click than a Brit for example. Do you have the same observation? What do you think the reasons for this are?

Thanks in advance,
Jan

Frank

***FS*** That is a Super good question Jan. I think the gender/age question really comes down to the type of name inventory you own. Our 'Games' vertical is mainly kids, probably boys. Our 'Cars' vert is probably 18-34 Men. Then we have a faily large 'Beauty' vertical that attracts women. Its funny you should mention the UK.. We run a portfolio of about 4000 pretty good .co.uk names .. they get very consistent type-ins and generate strong revenue. The pound is much stronger than the dollar and we monetize through Yahoo (Europe).. I have never looked very closely at the percentage of people clicking through based by geographical IP address. I do think different cultures have different expectations of product quality. Your average Opel has a much higher level of fit and finish than your average Chevrolet because Europeans demand it. So it stands to reason if you run a uniform "one style fits all countries" page implementation, you might not draw as many clicks.

Omar

Frank,

Can you share with us the earnings seasonality for traffic domains? In general, how do you expect earnings to be this year?

Bob Luther

Hi Frank,
You commented "We don't get any traffic from search engines right now. We're too big and PPC pages don't meet the engine's criterial so they actively work to block us." My question is about a domain that does not have the benefit of being a type-in domain, but benefits from search traffic because of its history. The domain is well indexed in the search engines because it had a business website on it for years.
January was the first full month it was parked, and it got 2803 uniques and 308 clicks. But in February it dropped drastically to 160 uniques and 18 clicks. I dont think anything changed except that Google, for instance, probably detected that it is now parked. Do you think that is what affected it? If so, it makes me think that I cannot park a name like this...I need to have a developed site to continue to get the traffic from the search engines. If I go that route, will the search engines still clobber it if the developed site has some Google ads or affiliate links on it also....or will that not be used against it? OK, now my accountant suggests a question...could the search engines be 'de-listing' it because the DNS has been changed to point to a parking company...as opposed to simply checking the content of the site to determine whether it is parked content or true developed content? Thanks in advance for your thoughts.

Edwin

If you had to start all over again, and had $100K in your account, what would be your strategy?

***FS*** Great question Edwin... I would try to buy high quality names 50 of them by making $2000-$5000 offers through whois.. calling registrants and emailing.. then I'd put them into a PPC and reinvest the profits into more buying names.. resell the odd good one for a profit and again reinvest as much as possible (plowing all the money back in). You do all this part time until you get critical mass. That's the trick of the biz.. get to the point that you can do it full time. Once you're a full timer you have an instant advantage over many others. You can take some time to develop. I am reasonably sure that even today you could buy 50 names like those I am picturing at 2000-5000 each. (names like rumcakes.com <--i just paid 4k) I could live off that one name.. Name gets 10 visits a day. You could put up a simple site shipping prepackaged rumcakes.. Dropshipping. (I gave away $18,000 worth of rumcakles last Xmas).. 10 visits a day is 3650 customers a year looking for rumcakes (with no content there really) you could make $2,000,000+ per year off that one single domain by developing and creating a rudimentary business at the name.. That's the power of the internet. Levering the built in type-in-traffic embodied within the name into something bigger.

Cherminator

Franky, I miss you and wish you were here. It's just not the same here without you.

:-(

G

***FS*** Save me a chair at Slack's Vern and I are coming into Penticton this summer .. then maybe a vegas trip together? I miss you too sir :(

Edwin Sherman

Great answer! The one last question I have is: Why do you register names like BootDiskFailures.com and SeattleVideoSurveillance.com. Names like this get few to no searches (according to WordTracker and Overture), have 0 incoming links, and I'm guessing very few (if any) type-ins. Why do you buy these sort of names? How exactly are you making money if they receive little to no traffic?

Edwin Sherman

PS: Your rumcakes.com example reminded me of this rags-to-riches domain story in Newsweek:
http://www.msnbc.msn.com/id/17030580/site/newsweek/


***FS*** What's funny about that particular link you chose is that I sold him 'unicycles.com' (brokered the sale in 2002).. small world. I like names like those you illustrated because linguistically speaking there are not alot of search term combos that make sense:
boot disk failures: 543 <-- gets some overture rank and you can sell highly bidded 'hard disk recovery' paid search listings.
seattle video surveillance is actually an anomally .. it was bought with a third party in mind.. but that name notwithstanding, we are not perfect.. we do make mistakes. Check the Overture rank though and you'll see most of our search-term style names have a 'user search' heartbeat as with bootdiskfailures.com. Still last point.. many of these names represent future opportunities we believe in, but don't constitute the bulk of our revenue generating inventory. Thats why we want low renewal fees for our names..

A great deal of the names we (and others) own have no revenue at all.. If renewals go up we start saying, why are we carrying this weight? A great deal of Verisign's recent revenue increase has come from low renewal fees and tasting.. as they raise the bar they are going to have to be careful to pick the magic level where they don't loose too many renewals as a result of price increases (Sidebar item but relevant to your question).

Mike

In regards to PPC/domain parking, no advertising, straight type in traffic only; how much of a role does the TLD play in the success of a parked domain? Logic would dictate that a .com always outperforms a .net/.org, etc.
I have a healthy mix of several TLDs, yet i'm wondering if i shouldn't just capitalize on .com domains and sell/drop the rest?

any advice appreciated!

***FS*** alot of this comes down to common sense.. Mortgages.org gets one unique a day. If I owned the .com it would be more like 1000-2000 a day. If I owned a name like charity.org it might actually do better than the .com ... some .net's do as well as the com but by and large .com is king for type-in traffic. Everytime a user watches tv everytime they see a print ad, a billboard , that gets reinforced.

Gabe

It seems that your blog is getting quite popular since your first entry less than a month ago...great stuff - keep it coming! By the way, any big purchases at the auction today?

***FS*** I actually didn't buy that much.. I took seven names for 142,000.. the best one I bought was homeforeclosures.com for $90,000. There were alot of great names but I honestly have alot of trouble opening my wallet at these auctions because of the auction fever dynamic that goes on. Still its great fun to attend one and to get a sense of the size of the industry.. Maybe 5% of those in the domain business attend these things.. maybe 1% of global participants.. Its exciting to watch the industry mature.

Dan Cera aka DomainTrader.ca

Frank:

I found it interesting given his company's Canadian presence that Geo Sign founder Tim Nye said that when he saw a ".ca domain on a flyer, I think small-term local firm"

I am not sure what small-term local firm means exactly but I'm assuming its a typo and the reference was to small-town or small-time or something like that.

I personally think Tim underestimates the inhernet value in country code traffic. While .ca suffers from a demographic problem due to a lack of population the traffic generated there when targeted converts very well.

Yahoo, ebay, amazon...don't think Canada too small and even though he says it says small time Tim's company saw fit to register geosign.ca.

As you have ties to Canada and an investment in the .ca namespace yourself I wanted to ask your thoughts, experiences and opinions on the value and future of .ca domain names specifically.

There is no question that .com is king but after that where do you think cctlds fit in to the future of the web.

***FS*** I think you're right. .ca is everywhere in Canada. My opinion is: .ca names are good in Canada, but if you want to do substantial business globally you don't need (but should have/try to acquire) the .com .. In America .us will never be as popular (never catch on) like .de did in Germany or .ca did in canada because .com is so entrenched in the culture. You have a decade of branding, a trillion+ dollars in global marketing pushing the.com brand. I think Tim believes there is value in some CCtlds and alternate tlds, but if you want to Lever-up borrow money against your internet business.. during this early phase, .com is it. .com has the traffic. Follow the traffic, follow the money. I think certain CCTlds do well because of currencies and languages. The visitor can expect the British pound, the Canadian Currency or German language and Euro prices.. like that. I like .CN names because the Chinese are nationalistic/'middle kingdom' oriented. They will want the .cn but if they want to do business blobally, .com will still have the advantage for a few decades

Gabe

I wanted to hear your thoughts on typo names and traffic. More and more I've been hearing the whisperings that new smarter browsers will eliminate typos - and that domain holders with typos should unload them now before they are worthless. Now what I can't comprehend is that how would the browser tell if the domain is actually a typo? I mean, look at all these names that are being branded into full fledged successful companies; freindster.com, flickr.com, digg.com. I can understand that there are browsers that can correct the tld's like if someone typed in .cm instead of .com, but I can't see how a browser can automatically assume that I meant to type in forsalebyowner.com when I actually typed in forsalebyowener.com.

Now I understand that branding a typo name to represent your online company is probably not the best route (only companies that don't rely on type-ins, i.e. digg, can get away with this), but ultimately you can always brand a catchy name that gets few if any type-ins and redirect the typo domain to point to your branded name (ex. Brand FSBOHomes.com and redirect forsalebyowener.com which gets over 300 uniques/mo.). Ultimately, instead of having to pay Yahoo/Google $2 per click ($600/mo. for 300 visitors), you just saved yourself $7200 a year on advertising since you already own that targeted traffic. You would think that advertisers that buy this type of traffic at Yahoo/Google would be knocking on the door to buy this domain for $14,400 so that they could own this traffic for life rather than pay $14,400 for 2 years of advertisement via Yahoo/Google. Yet, the number represents over 8 years ppc earnings and paying this much for this typo would be foolish to many "domain investors". (This brings it back to the whole Sendori business model - eliminating the the two middle men, ppc company and Yahoo/Google, and going straight to the traffic buyer).

What I'm getting to is even though generic typos have little "brandable" value, they ultimately have "traffic" value which we all know is the alpha denominator in generating sales online. With this said...I have 3 questions:

***FS*** Very well thought through comments Gabe!

1. What is your take on the feasibility of future browsers being able to somehow recognize and correct a typo name which would dramatically decrease typo domains?

***FS*** Highly unlikely IMO.. its too problematic because as you pointed out "what exactly is a Typo?" Flickr, digg and even deel.com example I used in this post: http://frankschilling.typepad.com/my_weblog/2007/02/when_is_a_typo_.html .. its very hard for the browser to modify user intent without ramification. Sites change and today's typo becomes tomorrow's brandable variant. Consider that its 2007.. they can't stop spam (I have a spam filter and still get it), they can't stop pop-ups (i have ie7 popblocker and still get them), how are they going to stop folks from navigating to the sites they actually want.. the action is so benign.

2. What valuation models do you use to value your typos - 3x, 5x, 7x years ppc revenue, etc.?

***FS*** Depends on the viewpoint of the party taking on the risk I suppose. For me, I don't like trademark typos (they have a minus multiple because I actively try to avoid or delete problems), but a brandable variant like deel.com if I could get it.. I'd pay whatever I could within reason.. We don't really use the "multiple of ppc" rule because my deal may be different than the sellers. ie. sellers 10x may be my 3x. I don'rt like typos that aren't brandable or are overt such as: dfeal.com <--- deal.com primarily because they are not brandable... I guess I would focus on typos that are "not really typos" like dogz.com (yes, the 's' is next to the 'z' on my qwerty keyboard.. but being a typo is just not what 'dogz' is about. Its street-slang .. see where I'm going with that?

3. Do you see advertisers in future bypassing the big boys Yahoo/Google and going straight to the domain owners to buy or lease TYPO traffic (if so, we are greatly undervaluing typo domains - don't you think)?

***FS*** We are seeing that now.. savvy advertisers approaching to buy verticals direct. Its a very easy sell.. You can hear the lightbulb going on, on the other end of the line and the excitement in their voice as they contemplate the prospect of all these potential leads "refreshing" to their site. We sell verticals of traffic that include generic brandable variant names like dogz; so yes.. I could see aggressive advertisers coming after typos as well as generics.

Your insight is always appreciated and I hope you still got time to finish your "real work" now that you got this blog going.\

***FS*** Its hard.. but rewarding.

Frank's fan

I have a few undeveloped 1999 adult and bodybuilding domain names how on earth do i get them valued when they would only be of interest to those guys very familiar with those two fields.


***FS*** I would not worry about getting you name 'valued' appraisals don't help sell names. The person buying your name will not care about your appraisal. the only place appraisals work is in the mortgage/housing business where they are standardized and required for borrowing. Try selling your exgirlfriends engagement ring when you have an approaisal for $5000, you're asking $3000 and there are 20 of them that are bigger and better on ebay for $1000.
Plug your names in through a parking service, see if they have any traffic/make money; then write the aggregator saying you have a generic name that gets (for example) 12 uniques a day, making $X a month.. What's it worth? You will get an email back.. and that number will be a lowball wholesale.

Drewbert

Dear Abby,

What's your position on hyphenated keyword names.

Sincerely,

Concerned bystander.

***FS*** Ha!~ I likem' skate-boarding.com one of my fav's these get traffic but its clearly more muted than no dash (with rare exceptions)

David Wrixon (aka Rubber Duck)

Frank,

This is not really a question. It is a suggestion.

If you have any aspirations in the IDN market, this is an opportunity you should not pass over.

http://www.idnforums.com/forums/2112-a-bold-foolish-experiment-entire-japanese-idn-portfolio-for-sale.html

If you think Edwin is close associate of mine then ask around, he is not, but this is one of the best Japanese Domain portfolios in the business. Maybe even the best! In 12 months time selling this will look like an act of suicide.

Best Regards
Dave Wrixon

Brad

Frank - I work for a very large company that has many businesses, including media properties. From what I can tell, I am the most knowledgeable person in the entire (very large) organization about domains - I'm probably also the most passionate.

I have had little success in convincing my company (or even my business unit) that we should be spending a lot of money to lock up the good real estate before it is gone. The general response is, "we don't have the cash right now and need to make the numbers for the quarter. Besides - all the media companies are consolidating their properties under one domain - they aren't going to multiple domains "(games.yahoo.com, movies.yahoo.com). I tell them that it isn't a single expense for one quarter - that we can write it off over 15 years and that we need to own the category - blah blah but nobody gets excited.

This company could spend millions on names without any troubles but I'm having trouble getting buy-in.

Any suggestions? Any data / examples (especially from media business) of people going the many domains route v.s. single domains? I think barry diller is a good example - they have all sorts of similar businesses using different names (tickets, loans etc) - but any suggestions would be great.

Thanks in advance,

Brad

***FS*** and just try buying a good name.. I know folks who have tried to buy launch.com and altavista.com from yahoo.. no traction. They are scared to sell in case the give something up that they handn't anticipated. I really don't have a further piece of advice that I haven't already given on this.. Even if I had a great one it probably wouldn't be in my best interest to give it out as I'd still like to try to capitalze in the secondary market (buying names) over the next few years myself. Prroctor and Gamble got it a few years ago buying alot of great domains .. so did J&J (baby.com) Kay Jewelers (Gold.com) .. I can honestly say I don't have a convincing statement that you can make to a quarterly focussed company in order to illustrate the potential in locking up the right domain names now.

Gabe

"T.R.A.F.F.I.C. West’s Live Domain Auction organized in conjuntion with www.Moniker.com yielded over $4,000,000 in sales on Wednesday this week. Rumors have it that the domain name porn.com did exchange hands privately after the auction ended for $7,000,000, making it one of the largest domain transactions so far."

Just read this on domainnews.com. Have you heard these rumors that porn.com actually did sell after the auction?

***FS*** I have not.. but I know that Monte tried very hard to make the deal go on the block that afternoon. That's a huge purchase and would not surprise me to hear that it in fact closed. As a quick aside, I have heard of several deals for millions of dollars (hotel.com, hotels.com etc) That went for many millions, but you will never hear about them due to NDA's.

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