DomainTools Blog

While on Vacation I took a “Be like Frank” photo. If only it was that easy to be like Frank.

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.

I thought I would share the Frank Schilling keynote from the Domain Roundtable last week. Frank shares some insights on how he got started and where the industry is going. Frank figured out early on that domains with PPC advertising can be a good thing. This is a great recap of how Frank got to where he is today and a few hints about where he plans to go in the future.

Many people didn’t renew domain names in the dotcom crash and Frank re-doubled his effort to pour all his revenue back into buying generic keyword domains. Frank reflects how history doesn’t repeat but it often rhymes so there are lessons to learn from his domain history.

The most amusing part is minute 31:55 where Frank jokes that he just made $100 exhaling. There is also a mention of George Kirikos at spot 42:04, Frank helped co-found the ICA with Bob Martin after that conversation with George. At the very end, minute 52, Frank talks about possibly creating a super brand by redirecting all his traffic to a portal and building a brand around it. Traffic measurement companies like COMscore can’t seem to track Frank’s traffic because it is spread out on so many different domain names. Frank owns 320,000 domain names but it would be hard for any advertising company to see he has around 30 million unique visitors a month. In comparison, the most watched TV show on National TV every week only has 20 Million viewers.

Frank Schilling will be keynoting the Domain Roundtable next month. The most well known Domain Investors in the world, Frank Schilling will take us through his humble beginnings all the way to how he got to where he is. With over 320,000 domains in his collection, he is not resting & continues to buy. I love looking through his portfolio because he has so many generic killer domains. I am always stumbling on his domains, like for example, today I looked up Reverse Whois.com and who should own it, none other then Frank’s company Name Administration. I guess I will use a different name for our new service. It is funny how small the domain world is, when you can look up a domain and it is owned by someone you know it proves the world is very small or Frank is very big.

Frank will be doing some Q&A with the audience after his Keynote on Monday. One of the questions people love to ask him is, “Is there still room for people to follow in his foot steps?”. I will not spoil the answer… ok, I will spoil it. The answer is, Yes. So come be a part of a fabulous conference and learn from the best.

Early on Monday the 13th before the keynote, Frank will be participating on the Domain Industry Roundtable discussion with Sahar Sarid and Adam Strong. The treo will be speaking about how the Industry is changing and where things are moving.

To read Frank’s Personal Blog check out Seven Mile.com or 7 Mile.com, Isn’t that clever. He got both versions.

A debate on Domaining was sparked over an article that was published on Domaining at Search Engine Land. Frank Schilling pointed out that the article was basically a positive piece, but it’s was so couched and cautious in its review of the domain traffic industry and written with such halting hesitation he called the article, “Search Engine Land of Make Believe”. Danny Sullivan stepped out and gave his personal view of domaining. He said he had no problems with it except for three small dislikes,

“For me personally, with domaining, I generally only have three things I dislike:

First, the idea of tasting. It just feels unfair that you’ve got people who’ve established a way to find out what works and have a free ride for testing. But I can’t blame the domainers for that. If that’s the way the system works, and they’re smart enough to work it, there’s some admiration.

Second, typo domains. Frankly, if you’re making money off a typo of someone else’s domain, I’d love to see either the domain yanked out from under you or the ads cutoff. Generics? Have a ball.

Third, that you can’t buy domain traffic separately. Contextual ads initially came under fire as being sucky because they did not convert as well as search. No surprise — contextual ads are completely different from search. They should be sold in a separate marketplace. Domain traffic is also not search, not contextual but it’s own thing. It should be something that people can buy as an independent channel.

Therein lies the problem you might have with domaining not getting the respect you seek. You want respect, you don’t end up being sold as non-opt out traffic riding on the coattails of search. If you want non-Google network search traffic, you have to get domain traffic shoved down your through. You cannot opt-out. Opt out of contextual does not opt-out of people who also do searching on domaining sites.”

Frank Schilling responded with the same line of thinking…

“Folks on the domain-side also ask themselves why the keyword marketplaces don’t separate out “domain traffic”. The answer on this side is generally the opposite of those on the Search Engine side. Folks here believe that nobody wants to shine the light of truth on where the real conversions come from. Many many domain names.”

We have two great minds, one on the Search Engine Side and one on the Domaining side. Both are wondering why search engines don’t separate out Domain Traffic for buyers of Ads. It seems everyone wants it. Why are Yahoo and Google not giving it to the people?

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.

Last week was an interesting week for Domain Auctions. BuyUSA.com topped the charts and the typo of Facebook fetched $15,000. I wonder how long it will take Facebook to discover their typo is on the loose. Some long names sold like Breast Cancer Support Group and Thoroughbred Race Horses. It goes to show that even four word domain names fetch good prices when they totally define a huge category. CamelTeo was an interesting sale, apparently a lot of people spell toe, T E O. Frank Schilling reported publicly that he snores and that he also bought SnoringCure.com. It takes a big man to admit he snores.

Why else pay 140X for a name like snoringcure.com ($8,000+ at Snapnames.com today). It will be a frosty day in Hell when PPC revenues pay for that one, but I now own a great snoring name! I can sell products relating to the malady .. some of them may cure my snoring (much to my wife’s relief). It is generic, descriptive, easy to buy traffic for, easy to arbitrage - I could probably live off that one name! Man you gotta love domains.

We have asked other auction services to send us their Auction data. So far only Snapnames has sent us their data but we will report all sales data when receive them.

I was talking with Frank Schilling of Name Administration earlier this month and he reported an odd behavior of Google. If a user types his domain Personal Loans.com directly into Google, it will not even show one result for his website PersonalLoans.com. I can understand if he had typed the keywords for the domain, but he used no spaces and completed it with a .COM at the end. So there should only be one match for his domain, right? Nope. Instead the user will see an Australian website Personal Loans.com.au as the first result. This other site shows up because it has the same string as him but has the .AU on the end.

I decided to study the situation more. I have a good background in SEO but I never consulted for another company. This analyzation is purely for fun and Mr Shilling doesn’t know I am doing it. Shilling is doing alright with type-in traffic, however he is loosing eyeballs when it comes to the search engines - they pretend he doesn’t exist. You know you are blacklisted when a user types your domain name into Google and nothing about it appears.

Here is a screenshot of the Google results:

PersonalLoans.com can’t be found at all since it is blacklisted at the moment. I am less concerned about the blacklist status and more concerned about the health of his organic traffic. Lets talk about getting the domain back into Google, but not just in - in the first ten results for Shilling’s keywords “Personal Loans”. Type-in traffic is alright but organic traffic is Gold.

• First, I would move the domain away from the group of 44,555 other domains sitting on the same server.
• Second, I would concentrate on content. He has done a good job at building out the site with useful information, however it looks like a parking wolf in website’s clothing. Can Google see that? Yes. We need to add more content and decrease the ads. Less ads can actually result in more income.
• Third, after the content is added, the hard job is getting some links to the site. Perhaps he could start a Personal Loans blog and talk about the personal loans process. The blog could interview authors of books and other blogs on the loan process. By actively engaging the readers of the site, it would draw in those much needed links.
• Fourth, Google is temporal. Sites that never change or get all their links at once don’t do very well. A site needs a track record of growth. Devote a few hours a week to looking at the site and figuring out ways to improving it.
• Fifth, link bait with some features. Offer charts, graphs or interactive calculators. People bookmark these and come back, so also add social network bookmarking widgets to each page. This enables users without websites or blogs to create backward links to the site.

A website is like a person- you know if they have a good soul in the first 2 seconds you meet them. I would say Google is very good at judging the character of a site and knows if it should be included. Google will continue to keep judging a site and will change its view over time. For example, DomainTools two years ago was a PR0 (the lowest page rank possible) and pointed to a porn site. I bought the domain and turned it around. Before beginning the project, Shilling needs to examine what makes the other sites in the top results rank so well. What are they doing that he could be doing better. The best way to beat the competition is to chart them out and see how beatable they are.

PersonalLoans.com has a lot of potential and it needs more inbound links and more attention. I like that it is two words - generic one word domains are often harder to help. The more words in the domain name and the most specific the phrase is, the easier it is to help a site.

Search Engine Arbitrage is defined as buying ads from a search engine and then selling ads at a higher price. For example the arbitrager buys the term “rare dirty coin” at Google and pays $0.05 for the ad because no one else is advertising on that term. Once the user clicks on the arbitrager’s ad he is taken to a page about “gold coins”. Let’s say the term “gold coins” makes $0.70 per click. The Arbitrager would need to convert 1 in 13 people to make a profit or 1 in 14 people to break even. We can think about Arbitrage as a keyword funnel, collect a lot of small terms and lead them into a big term. I think search engine arbitrage is another brilliant way of Mining the Longtail. There are drawbacks to arbitrage though, the market can only support so many of them. Geosign just announced they raised $160 Million from American Capital. With big announcements like this there is a lot of attention being focused on the keyword arbitrage market.

Let’s say there are 50 companies engage in large scale keyword arbitrage right now, they all make a return on their investment of 400%. If the market had 2,000 arbitrage companies I know the return would be much lower for all. I see algorithms getting smarter and machine evaluation processes getting faster, in short, to survive long term companies will need to have smarter machines then the next guy. The beauty of the longtail is that it can support a lot of companies. So it may take 30,000 arbitragers to drive average profit to 5%. The Fat Front of the Longtail will be eaten up very quickly and arbitrages that try to survive there will die, only 10 companies can show up for a term. So if 30 companies rule this industry we can see that there will be a collapse at some point and rest of the companies will fold or be bought out. However, reselling a poorly preforming arbitrage company will be harder then selling sand to an Egyptian.

Frank Schilling has a good perspective on how search engine arbitrage compares to domain arbitrage. He point out that only one company controls a domain, meanwhile anyone can bid on a search engine term. Traffic on a domain will never go away and a competitor will never drive costs up for owning the domain. For the king of domains it is easy, he can focus on domains and weather the arbitrage storm. Even if he enters the arbitrage business he has a safety net of 300,000+ generic domains with tons of type-in traffic. In Franks own words, “Homer Simpson himself could not kill Name Administration“.

My take on all this is that search engine arbitrage is here to stay but the margins will get thinner in the future. We can expect the leaders of today’s pure arbitrage business to get tossed out. Historically, the first to market in a highly competitive environment will lose their lunches to the next smartest company. Mosaic and Netscape are prime examples but I am sure there are more. Margins will compress rather quickly and the smart guys will be left. For the companies that want a re-do, they will need to have a back up plan. Marchex is a good example of a company with backup plan. They have a huge domain portfolio that has natural traffic.

There is a clear evolution for domain owners to play in this space: (Domainer > Registrar > Media Company) Once a domainer has hit the Media Company phase they can start playing in arbitrage. There are more direct routes to becoming an arbitrage company, start as an SEM company. But SEM companies are more pure play and don’t have backup plans, so I predict will be the ones that get squeezed out as margins compress.