DomainTools Blog

A great new book just hit the stands, “The Domain Game” by David Kesmodel is an intriguing book about our industry. The book is filled with people that I am intimately familiar with, so it was fascinating to read the book on many different levels. I was also mentioned a few times in the book but the best part was reading the many other stories in the book that I had never heard. There are new facts which have never seen the light of day that are now shared publicly in this book. Mr. Kesmodel was a Wall Street Journal reporter that quit his job and immersed himself into the domain community for about a year so he could write this book.

It was a book Kesmodel said had to be written, there was just too much to uncover. When an investigative journalist gets embedded inside a secret industry a lot of dirt and details are going to come out and they did. Readers are able to follow as people in the Industry got those million dollar domains for $50.

The Domain Industry has always been shrouded in secrecy so I was surprised how many people opened up for this book. Kesmodel went beyond interviews, he searched public records and talked to neighbors and friends of some of the people he investigated.

When reading the book I started jotting down notes about when people where mentioned in the book, it may not be completely accurate but hopefully it is 95%. There was no index in the book so I am sharing the one I made so anyone can quickly find people as you skip through the book. The book is 9 chapters and hands down the best Tutorial/Introduction on the domain space I have seen. I hope there is a second book in the series because I know several hidden chapters that have not been told yet!

Official Description of the book:

Almost everyone has heard a tale of someone getting rich by selling an Internet domain name for a staggering price. But few understand the secretive world of domain investing, a game that a growing number of people are playing around the globe. The Domain Game chronicles the exploits of leading domain investors and explains how this mysterious market works. Learn how an Oklahoma watermelon farmer wound up owning some of the world’s most valuable Web addresses, from recipes.com to chairs.com, and how a college dropout became a multimillionaire by scooping up domains that others abandoned amid the dot-com bust. Find out how the rise of Google and Yahoo has helped boost the fortunes of domain investors. And explore the shenanigans of investors who snag names associated with corporate trademarks. Finally, read how you can jump into this exciting market with a relatively small initial investment. It’s a market with high risk, but huge potential reward.

You can order the book for $19.99. So I highly suggest it.

Inspired by last year’s $20,000 success, Domain Roundtable is back at it again! So, get ready to press your luck Saturday, April 19 as you are invited to Gamble for Good at the Domain Roundtable Conference.

For the event, DRT has teamed up with TrafficZ and Grassroots.org to give attendees exclusive access to Club 443, San Francisco’s hottest nighttime spot. With a full open bar, craps, cards, roulette, and music by San Francisco’s favorite DJ Matteo, guests can get down to some risky business without chancing a loss.

No, at Gamble for Good, you can’t lose. We’re proud to say that all proceeds from the evening go directly to Grassroots.org, the tech industry’s leading charity organization. Grassroots.org is a national nonprofit campaign which seeks to empower charity organizations, and help them reach their financial and philanthropic goals, via current technology, savvy web-based marketing innovation, and a focused network of similar supportive web sites and organizations.

Casino games and raffles will be provided. Prize packages, totaling nearly $10,000 so far, include:

• One year of VO1000 Phone.com Subscriptions ($39.88 per month value)

• 20 hours of SEO consulting from SEO.com (value of $5000)

• One-year DomainTools.com Gold Membership (valued at $292)

• Domain Roundtable Future Conference registration (valued at $1000)

• 20 hours of web design by Graphics.net ($2000 value)

• Black Sabbath autographed CD ($150 value)
  

• Shania Twain autographed lyrics (value of $100)

• Rick Reilly autographed books ($60 each, $200 for collection)

Also, any attendees who register on or before Friday, April 17th will be recognized on the Grassroots.org website with a text-based link!

Domain Roundtable and Grassroots.org offer special thanks go to TrafficZ for sponsoring this event. Founded in 2001, TrafficZ is one of the oldest and most experienced domain parking and traffic monetization services in business today. Since its inception, TrafficZ has remained at the forefront of the domain industry, driven by an unyielding dedication to provide innovative products, cutting-edge technology, unparalleled service and best-in-class monetization. Widely regarded as a pioneering force, TrafficZ continually strives to maximize the potential of each and every domain asset by identifying its highest and best use and extracting maximum value for its clients. TrafficZ partners enjoy unsurpassed customer service, a renowned templating system, near-limitless customization options, dynamic and flexible content management solutions, SEO functionality, advanced auto-optimization technology, a comprehensive suite of domain analytics and, last but not least, industry-leading payouts.

So, play cards, place some bets, win prizes, make a difference in the world!

Interested in donating prizes or funds? Please contact support@grassroots.org for details.

For more information on registration or donations, please visit: http://www.domainroundtable.com/2008/gambleforgood

Betting on change,

The Domain Roundtable Team

For as long as I have been in this industry, I have been trying to promote transparency and market efficiencies. That is one of the reasons I started blogging. A lot of domainers choose to remain in shadows and I do not fault them for that. I take the exact opposite stance. If you have nothing to hide, then transparency is a good thing. The general public scorns domainers because they have built empires where nothing used to exist. Most earlier domainers saw the vision that domains would become valuable and they registered them like there was no tomorrow. The more generic the better. Domainers had no problem laying money on the line to secure domains from other early registrants. For domains to reach the same prices that we see on real property we need to see transparency, market efficiency, and clear laws.

Transparency
Hiding the details or obscuring facts is not good for the industry in general. In auctions, usernames should be displayed. Ebay and Snapnames led the way with this and it created a very healthy bid environment for online auctions. When big bidders (people like Frank) are in there buying domains, they want to know they are not bidding against shill bids or people that run up bids. It is very common for a big bidder to call the auction house and ask the auctioneer for a verification on a new bidder that is bidding heavy. People wonder if the person is legit. When auction systems only disclose bidder1 vs bidder2 anonymous style bidders, there is an inherent distrust the system. Ebay has disclosed real usernames for years and I believe that is why it is the biggest auction system in the world. I am able to do my own verification checking on a user by looking at their 30 day history and how many people have filed a complaint against the user.

Who owns a domain or how many domains they own should be available somehow. Information is the key to the Internet economy. Domainers in general need to realize this and insist on it. Outsiders judge this industry as almost incestuous and rigged. Michael Arrington openly called domainers thugs and racketeers about 5 months ago on his blog. Outsiders in general don’t know what is going on when they look into our industry. Even someone like Mr. Arrington who used to be employed as a CEO inside our industry. We need to change the way outsiders perceive everything about domains and promote values that increase the integrity of the entire system for everyone. Imagine buying a house and not being able to get the history on it. Imagine doing business with someone on Ebay and not knowing if they are a first timer or a trusted power seller.

Banning an industry professional like myself from a domain forum reduces transparency in the industry. I am banned in some of the most popular forums in this industry not because of my conduct but because of tools and services that DomainTools provides. If I don’t meet openly published criteria, then that is rational, but if the reason is more intangible then I need to question the transparency of that organization and what values they operate under. I personally vow that all services which DomainTools operates will work in a transparent manner. If I am banned for operating transparently, so be it. I welcome the day when everything in this industry is open and transparent. That day will come.

Transparency also relates to portability of data. In an information economy, the information needs to be exportable and not locked in prosperity displays. I am a heavy believer in open APIs, full RSS feeds, and published standards for protocols. Let the data for a service live outside the interface. Any applications that DomainTools builds is built on APIs that everyone should have access to. So if we invent a new service, you can bet we want to make that API available for other people to put a User Interface on it. Anyone should have the ability to make a service that extend our services. If someone can do a better job then we can, then by all means let them. We will make the API that powers the infrastructure. Security is the only concern when making something open, so long as those concerns are addressed we will make APIs open. Our first product several years ago was a domain suggestion service, almost every registrar in the industry has used it and all of them implemented the user interface in a different way. The real service most companies sell is not the user interface but the underlying data service. Does Verisign have a user interface for DotCom? No. Everything is done by registrars and I believe this has made the market bigger. More people are marketing DotCom, more people are selling DotCom, and Verisign would never want to be back in 1997 when they were the only shopping cart on the Internet for it.

Market Efficiency
Let’s face it, the market is not very efficient right now. If you buy a domain and want to transfer it to your favorite registrar, you will be faced with hurtles of getting that domain out of the current registrar. You need to get the auth-code once you own a domain. If you have the auth-code it is reasonable you are the owner. Auth-codes didn’t exist 5 years ago, but yet when they did appear in the market, we did not get rid of the old checks and balances. So now that we have a system that is frankensteined together with auth-codes, registry locks, email confirmations, AND registrar denials as hurtles to transferring a domain. I would envision a secondary marketplace that allowed a person to buy a domain name, pay for the domain in escrow, receive the auth-code in escrow, instantly transfer the domain, and start using the domain. With the system we have in place, only experts can transfer domains and even then it takes calls and emails to beg for permission to transfer our own domains.

Buying and selling needs to get easier. When the market gets more liquid it will allow prices to rise. If you look at any market in the world that has inefficiency, you will see the prices are more depressed there then in places where the market is highly efficient.

In the coming months we will be releasing what we feel is a more efficient marketplace solution. We want to stress transparency and open protocols that anyone can use. With the amount of developers and domain companies that exist right now, it would be awesome if we didn’t even need to create an interface for it.

Clear Laws
The third tier to any marketplace operating efficiently are clear laws. Not a lot of large companies enter markets when the laws are not tested. We need clear direction and enforcement from ICANN and other governmental agencies on what is tolerated and what is not. The domain market right now is very much a wild west. Only passage of time will build the laws that govern the industry.

If you are a regular reader of Frank Schilling’s personal blog, you will want to re-subscribe to his blog. He is off typepad and on his own domain like all domainers should be. Head over to SevenMile.com and click subscribe. His old RSS feed is dead, so be sure to re-subscribe. If you are not a regular reader, now is a great time to start.

Typepad is good for beginners, but if you want your own blog make sure to do it under your own domain. Traffic is hard to build up for a blog, it takes months and months of hard work and a lot of posts. However Calvin Ayre of Bodog proved you can switch domains mid stream and the visitors will find the other front door if they are really loyal. (It also helps if you email them several times and they are addicted to your product. )

While I am announcing Frank’s new permanent URL. I think I will mention some other domainers that are fun to read. If the DomainTools Blog is not covering a subject, it is because one of these great guys already beat me to it. Subscribe to all of them and read them along with me. We are like one big newspaper.

• Richard Ball of Apogee.
• Sahar Sarid of Conceptualist.
• Ari Goldberger and Larry Fischer of DirectNavigation.com.
• Frank Michlick, Adam Strong, and Crew of Domain Name News.
• Andrew Allemann of Domain Name Wire.
• Peter Askew of Domainers Gazette.
• Roland Buck of DomainNews.com.
• Milton Mueller of Internet Governance.
• Dominik Mueller of Dmueller.com.
• Mark Fulton of DotSauce.com.
• Elliot J. Silver of ElliotsBlog.com.
• Joe Davison of NameStrategy.com.

I recommend full feeds, not partial feeds. It is much easier for someone to read your blog this way (your audience will also grow faster and link to you more). There simply is not a HUGE blog out there that has partial feeds so please open up your feeds. Go full feed. Say “No” to partial. I know it is tempting because you see more page views in your log files and that makes you happy. But frankly page views are an old way of measuring success for a reading based media source. A blog’s success should be measured by a third party RSS counters like feedburner. If you want to make money with your blog, put the ads inside the feed or get creative. Don’t quote page views to potential sponsors, quote them readership base. People can read your posts via email delivery or via an RSS Reader like (Google Reader). End of rant.

One last thing, if I did not mention your blog, feel free to post it in the comments below, I think there are 50+ domain blogs out there and I try to read them all. I may not get any work done, but I know what is going on. It seems like last year there were none. We have come a long way in this industry, perhaps in 2009 we will all have vlogs.

Bret Fausett of Lextext has released a new blog about, what else, Domain Names. Another Domain Blog, I love it.

Bret’s new Blog is called Name Brief and he just posted a great article on Domain Clouds. That image in the upper left is a Domain Cloud. The blue box represents the primary brand, example in this case would be Google.com. The Red box represents alternate TLDs like dotnet or dotorg. A company may have registered all three: dotcom, dotnet, and dotorg back in the day (1999) to protect their brand. Yellow represents new TLDs (2000-2002) like dotinfo and dotbiz. The Domain Cloud continues to change over time and Bret explains that how Brands in 2002-2005 started protecting their ccTLDs if they are big enough (pink boxes).

But now companies are starting to protect those grey boxes too. Those represent misspellings of the primary domain. He explains that only a few of the registrations may be phishers and fraudsters (black boxes)…but those black boxes are the exception not the rule. Protecting all the grey boxes and registering those domains before someone else does seems to be more common in the Domain Cloud of today.

The layer of protection used to be just the Blue Box, but as time goes by the layers of protection for a good brand keep increasing. This is the first time I have seen this visualized so I think it is an extremely helpful post.

Visit Bret’s blog later today for a review of how typographical domains are affecting the small players and then Friday for “the prestige,” when he shows you why monetized typosquatting could be helping your business…and why, even if you disagree that those grey boxes are helpful, you need to start typosquatting yourself.

Read the full article rather than just my take on it. This is the year of Domain Blogs for sure. Domains are so much fun to talk about, I am sure this is just the beginning. I hope there are a million domain blogs soon.

Here is a video of Fox News talking about Buying and Selling domain names. The two reporters seem like they don’t understand domain names but they sure have a lot to say about them. One lady keeps talking about typing domain names into Google. They say there are 90,000 domain names purchased everyday. Hmmm, They didn’t quote their source but it is wrong. Perhaps half that amount or around 45,000 would be more accurate. They seem to think most domains go for hundreds of thousands of dollars. Reporters like these cause bubbles. I don’t want to bash them too much, they are doing a good thing for the Industry but they need to keep things in perspective as well. There is a market for Generic domains that is very healthy. Certain domains are worth millions other domains are worth $6. Crappy domains have no market and never will. They got it right though, there is a lot of money behind dotcom. Everybody knows that brand of website.

PIR the registry that runs Dot Org has appointed Alexa Raad as their new CEO. Previously Alexa was the Sr. Business Development Manager of Verisign. She has also worked at Dot Mobi and was pivotal in the start up process. Alexa Raad has a Master degree in business administration and a Master degree in information systems from George Washington University. She speaks Farsi, German, French, and Italian.

“This is an exciting and important development for PIR,” said board chair Susan Estrada. “Alexa is an inspiring and accomplished professional who is well-equipped to take the organization to its next level. She is determined to make sure that the organization continues ­- and even exceeds ­- its ability to ‘do good’ within the domain name business. We believe her passion, along with her unique business savvy, will make it possible for PIR to increase the registry business and ensure continued funding of the Internet Society. We are thrilled to welcome Alexa to our staff and look forward to her leadership.”

Michelle Miller joins Name.com as their new Chief Operating Officer. Bill Muskin is the current CEO of Name.com and has a lot to say about the deal. Michelle was also the former COO of BuyDomains before she helped sell it to NameMedia two years ago for a reported $65+ Million. Michelle was instrumental in building the value at her former company and will be working on a lot of new ideas for Name.com in the future.

Name.com is in an excellent starting point for Michelle to start her work, they have several hundred thousand domains under management and thousands of customers. With the influx of new ideas that she will bring to the company they expect to take the sleepy registrar and turn it around into a juggernaut. Name.com is arguably the second best domain name for our industry right behind Dotster’s Domain.com. The domain Name.com has more intrinsic value because it is so general. If a domain ever gets replaced with another name it will still be called a name. A name will always be called a name no matter if they are selling domain names, URL names, or ID names.

However Name.com is hard to find in Google organically, for the query “Name” they appear 5th. Name.com is a brand that is hard to market because it is so generic. The secret they have is that it is easy to remember and easy to share virally.

It is an extremely rare case when Business 2.0 puts an anonymous unknown person on the cover, but the editor just did it for the month of June 2007. Kevin Ham is the biggest person on the Internet that no one knows about. Kevin had been under the radar for such a long time that even other famous domainers did not know who he was. Kevin’s portfolio is huge and throws off more cash than even Frank Schilling’s. To put that in perspective, Frank is currently the most well-known domainer in the world with some 320,000 domains and several million dollars in income a month.

I wrote about Kevin’s company Reinvent Technology in April as did Frank, but I didn’t go into a lot of detail. Paul Sloan has done an awesome job in his cover story on Kevin.

The headline is “Here’s how the master of Web domains built his $300 million empire”. When I saw the headline I was shocked that Paul had given Kevin such a low evaluations. I talked with Paul and he said if he had it to do over he would have changed the headline from $300 Million to $400 Million. Even that is an understatement. I would put Kevin between $500M to a Billion. But the value of his company in the future will be worth Billions and not Hundreds of Million like the article says.

Kevin’s Business partner Colin Yu was not touched on much. I think if I wrote the article, I would focus more on the two of them – they are a good team and founded the company together. Everyone wants to talk about Bill Gates and Batman, but Paul Allen or Robin deserve credit as well. I can see a follow up story on Colin one day.

Kevin is a devout Christian and his domains show it, He owns God.com, Satan.com, ChristianRock.com, and several other Christian related domains. Kevin has some great names and they get traffic. I think the reason Kevin came out of the closet was because he wants to take his business to the next level. I have talked with Dr. Ham a few times and the thing that always impresses me is how humble he is. For a man that is worth so much, you would never guess it if you met him in an elevator or saw him in a cafe. The best Domainers are very down to earth – I think that is why I love this industry so much.

Name Intelligence was asked to provide some color for the article so we supplied some registration stats on the growth of dotcom and other TLDs. It goes to show that the space is young and the registration rate is not slowing. In the chart to the right, we can see the cooling effect that the dotcom crash had on the market. But what people don’t realize is that millions of domain names were artificially inflating numbers in 2000. Network Solutions was invoicing clients for domains rather then charging for the domains, so some domains were existing on the Internet for free. After the registration process switched completely over to Verisign and the 1990’s invoicing practice stopped, we can see the registrations volume started to turn back up and there was sort of a second boom.

I have already predicted we will crack 100 Million dotcoms in the next few years. There is no signs things are slowing down. A lot of people wonder how many domains can be left to register, but I have to remind people there are millions upon millions of them. Just today I registered the three names. Some of the people that enter the market today will be millionaires in a few years. There is always room for smart people in this Industry. I like to remind people this is the 1880s of domain names and that we have decades in front of us. Domains that trade for 10K today will be trading for Millions in a few years. Porn.com failed to sell for $7.5 Million in March and one month later it sold for over $9 Million. We saw Sahar Sarid start from nothing after reading about Business.com in a magazine. It proves that anyone can start late and make it big.

The value of generic domain names is going up and the registration rate on city names, suburbs, local names, and new concepts is spiking. I find domains that are still unregistered and often wonder how so many people missed the name.

There is a new group that is pushing for legislative change regarding Domain Name Abuse. I am not sure what they mean by Domain Name Abuse but I think they mean Domain Tasting. On the whois it says that Joshua Bourne from Washington DC registerd the domain. I am not sure who started the group but it looks like they will be lobbing congress. It must be funded by Verizon or someone like that. Their website is at cadna.org. I think a more natural website would have been CADNS.org, DNA vs DNS. But then their acromyn would have made them the Coalitition Against DNS instead the Coalition Against DNA. I think while I am at it I will register and setup a Coalition Against DNS just for the fun of it and get an Amish army to rally against DNS with me. Anyway, back to the story, I have emailed them and asked to sign me up for a newsletter if they have one. I will keep everyone updated on what this group is doing on the belt way if they do have a newsletter.

CADNS’s Purpose:

The Coalition Against Domain Name Abuse (CADNA) is a registered 501(c)(6) non-profit organization dedicated to facilitating dialogue, affecting change, and spurring action on the part of policymakers to close a loophole that enables massive domain name abuse and to decrease occurrences of cybersquatting in all of its forms through the revision of current anti-cybersquatting legislation.

With pro-abuse groups already organized in Washington and the recent election of new leadership in both houses of Congress, the time to act is now.

CADNS’s proposed Solution:

So what is being done to stop tasting and to slow the growth of cybersquatting? At this point, not a great deal. Although cybersquatting has been around from the start and the tasting tactic in one form or another has been around for at least five years, the issues have grown over the past year and awareness that collective action is required is slowly spreading throughout the trademark community. To date, ICANN has not taken action to eliminate the exploitation of the grace period and it has not protected the interests of trademark owners and consumers. Lawmakers have overlooked their oversight responsibilities and have done little to curb brand abuses in all forms on the Internet, thereby failing to protect both consumers and the intellectual property community.

Given recent lawsuits filed by high-profile trademark owners against cybersquatters, the new Congress, and a strong pro-abuse opposition formed in Washington, CADNA believes that the time to act is now. By educating the public and policy makers and proposing practical solutions to Congress to address these growing problems, CADNA hopes to make the Internet a better place for consumers and businesses alike.

Does anyone know who is responsible for this group and who they are backed by?