Still lots of talk on blogs and forums about geo domains. My friend Rick Latona got the formula right: Sell when people are buying, buy when they are selling. Today’s market is strong on Geo domains for many reasons, such as Associated Cities and the Geo Expo, Castello brothers constant attention on blogs/publications/tradeshows, Elliot Silver’s blog, Rick Latona’s famous newsletter, and a couple of other geo specific blogs, forums. In my opinion, observing from the sidelines, majority of the people who promote Geo domains are doing so not because Geo is doing great but because they are invested in Geo. As such, by marketing Geo and affecting their value they are essentially marketing the value of their own holdings. Nothing wrong with that really but for you, the domain investor, you should question these things carefully as making the wrong assumption may as well mean investing in the wrong commodities. The more important question about Geo is are they making money today? Dr. Kevin Ham, in a recent DNJournal article, said it elegantly:
We are building a new advertising and retail platform through Vancouver.com. The ambition and initiative is huge and if we can make it work for our city, then we can build it for the rest of the world. Geo domains are asset rich but cash flow poor. So if we can change that paradigm into one that is cash flow rich, then we will raise the level for all geo domains.
(emphasis added)
Note that in reality, today, Geo is a poor performer. That is not to say things won’t change in the future (they can go either way) but today, in present time, if you are buying these domains you are likely paying for their future value, voting against the two other strong possibilities that 1. They will stay the same and 2. They will go south in term of performance. In addition, you are likely assuming you can always flip it to others without taking a major loss. Haven’t we all made those assumptions before though, especially in great times? We don’t need to look further then the current Real Estate market in the U.S to know that contrary to popular belief things don’t always go up, things ARE cyclical.
In terms of cashflow performance, in comparison to other domain categories, Geo domains are extremely over rated. It is not something many like to hear, it is definitely not something you say if you are looking increase your popularity in the domain world, but it is what it is. As I see more and more in the domain space considering investing in Geo (1, 2, 3, 4, 5, 6) I feel an obligation to talk more about it, to expose the other side, the side many may not be aware of, many do not want to talk about.
With all that said, Geo can work for you. How you may ask? That is for another post.
Happy domaining,
Sahar
I think the Geo Domains market is going to get big!
We need to develop our names to make more revenue as we know parking revenues are as good as they used to be - Surprisingly there are still a lot of Geo Domains out there that aren’t registered.
I picked up recently
http://eastscotland.com - http://westscotland.net - http://southscotland.net - http://northscotland.net & Also http://eastscotlandhotels.com - http://westscotlandhotels.com - http://northscotlandhotels.com - http://southscotlandhotels.com
Now I know a lot of people will think these names are going to be worth a lot and that’s why no-one registered them but in my eyes being Scottish and owning these names a country with 6 million people and over 100 million people that come and visit yearly developing these can make me a nice little profit.
It would have been nice to own Scotland.com or a name like that but they were gone a long time ago - For the future I think we need to use our local knowledge to expose these online markets for us.
Keep up the good post Sahar and I lets see what the geonames shall hold for us - NB - I also got http://ge0domains.com
Robbie
OK, I’ll bite.
Saying that Geodomains are poor performers is like saying the sky is purple. Kevin Ham is completely new to the Geodomain business. To date, he’s made 99.99% of his revenue in parking and has yet to monetize Vancouver.com. On the contrary, we make almost a million dollars a year from the front page alone of PalmSprings.com. You’ll also hear similar revenue stories from Dan Pulcrano and Skip Hoagland’s companies.
Speaking of, we’ll all be at the 2008 Geodomain Expo in Chicago July 10-12. Info at http://AssociatedCities.com
—-answer—-
The discussion is in terms of cashflow performance of a domain, not an actual business.
Cheers
Sahar
2%-5%? Please.
I’ve been in the Geodomain business since 1997.
A powerhouse Geodomain name like PalmSprings.com, Acapulco.com or Nashville.com is 50% responsible for the revenue it generates. We would make nowhere the same money with PalmSpringsTravelGuide.com or Acapulco.com.mx. Who will tell you that? Our advertisers.
—-answer—-
I will touch on the subject at a later post, of what I believe a domain is worth within an actual business. Just to touch a little about it here in few words, how much was Google worth before execution? Yahoo? MySpace? And thousands of others. In a real business the domain, while helps 2%-5% generally, is nowhere near the value of the actual business. There are literally tens of thousands of examples all around you to indicate so while on the other hand, where you are coming from (exceptional geo domains, mostly travel related) the numbers falls short of 100 on a good counting day. You are making the exception the rule.
Sahar
Sahar,
I admire what you have done in this business and how you handle yourself. Something does not add up as to why you feel the need to try to devalue the Geo Domain Space, when in fact most of the top minds both inside and outside the Geo Domain space feel that, in fact, with everything trending towards micro niches online, and all advertising online trending toward local markets, Geo Domains are severely undervalued with a tremendous upside. Not to mention the power these properties hold in the traditional media space in terms of delivering local content to citizens of these cities. People identify and take pride with there geographic location perhaps more than any other type of domain. That is what the whole sports world is built on, rooting for your city to win. It is clear your metrics do not take into account the inherent value that Geo domains hold and where this is all going. We have not even scratched the surface in regards to the power that Geo domains hold. Billion dollar media companies are involved in this space and many more will be coming, Seems like there are other forces at play here behind the scenes that is causing you to once again start this thread. In any event, I find this very puzzling, because I have not seen such a big lapse in logic like this from you before.
—-answer—-
Brian,
This reminds me of the .Mobi folks argument where they keep saying the Mobile Web has an enormous potential therefore .Mobi has as well. Same goes here: I’m not disputing the Geo web and that we are only scratching the surface with it, I know we are. With that said, I’m concentrating on present time, current domain market especially in terms of cashflow numbers on Geo PPC names, current sales market for Geo domains in comparison to their real earnings. I’m not talking about business development where in addition to a domain you have to invest in tech, people, marketing, etc. I’m talking about a domainer perspective view on geo domains, those who buy, sell, and monetize those domains mainly with PPC pages (majority of domainers by far).
I’m with agreement that geo domains are asset rich, both in term of potential, pride, and possibly development.
Cheers
Sahar
This is a case in point on how much a domain is worth to a business:
The number one florist company in the country used to be FTD 10 years ago. 1-800-Flowers bought flowers.com and built their business around it. Now, THEY are the number 1 florist in the country. ‘Nuff said.
A great domain can catapult a company into a dominant position and give its owner a HUGE advantage in advertising and credibility over the competition.
The companies you mentioned: Google, Yahoo, etc, are great companies regardless of what they chose their domains to be. THEY are the exceptions to the rule. They pioneered or became gorillas in industries that were in their infancies. If I invented a perpetual motion machine (impossible, violates the laws of physics), I would be a trillionaire regardless of the domain I used because I would solve the world’s energy crisis.
In my opinion, the Costello model demands the domain names they have in order to be successful.
If i owned a restaurant in Palm Springs and you approached me to advertise on your web site, I can immediately justify and see the advantage to getting my ad up on “palmsprings.com”.
If you tried to sell me an ad on something like hotpalmsprings.com or some other crap domain then it would be a lot harder to get my business as an advertiser. The ad sale is so much harder - you have to show me traffic and lots more convincing that hotpalmsprings.com would have the same ROI for my restaurant.
I think i just reiterated what David commented on above, but that is how I also see it. Now I wish i owned a premium geo name - oh well.
ps - i heard about this on the OZ Domainer podcast and the way it was explained made alot of sense. PPC parking is not the model for the premium geo domain.
the locale is the brand but the saying “a rising tide lifts all boats” definitely applies to geo names - not all names are created equal and one should proceed w/ caution.
Sahar,
Wow…Where do I begin?
You give examples of “google, yahoo, and myspace.” These names were essentially worth registration fee or at max a few hundred dollars to a “domainer”. They have been developed INTO Global brands…but without funding and development they are worth rocks.
HOWEVER, PalmSprings.com, Nashville.com, etc, are INSTANT BRANDS and already have the mind share and credibility that NO OTHER DOMAINS have. GEO domains are the cream of the crop, plain and simple. They reach such a large target audience…on a global scale. They are *undervalued if anything at all.
The reality is, *without question, your sales pitch is only half as important when hunting for advertisers when you own the generic GEO domain instead of an alternative brand. You will *always be fighting the grain on this issue, in any city–around the world with an alternative. These generic Geo domains (.tv, .com) supply a mental model that simply can not be duplicated.
Sarah, in all due respect, I just can not comprehend how you have suddenly come to this conclusion.
Jacksonville.TV has gained attention and a *direct interest from NBC/ABC and a few other local investors *because it “is” the brand. …is this not power?!? Jacksonville.com is owned by The Florida Times-Union and reportedly earned $20 million last year alone. As the Internet landscape continues to mature and evolve, the power of generic GEO domains will ONLY INCREASE, and .TV will play a *major role in this movement…you heard it here first. ABC/NBC/CBS, Landmark, etc are already on the path to the “new age of media”.
These Geo domains are “instant businesses” and it would simply BE FOOLISH for someone to purchase these for parking revenue.
GeoDomainer.com
SimplyGeo.com
AssociatedCities.com
These are great references for anyone interested in learning more.
NY
I do not think anyone is purchasing geodomains with the intent to park or put up simple adsense 3-page sites. If they are, then yes, you are right that the multiples they are paying are probably too high.
The truth of the domaining industry is that as the Snowe bill and other threats loom over the industry, more and more domains are being bought with the purpose of people buildling businesses on the back of them. Geodomains are a great place to start in terms of building a business on the back of a domain, as the business plan has been defined by many and does not require a warehouse, inventory, etc. They require content, design, and an advertising sales force, all relatively simple to understand sides of a real-world business.
As the trend continues, people will expand into other basic industries for purchasing domains with the intent of building businesses on the back of them. The real thinkers now are determining what that industry will be. I doubt it will be airplane manufacturing or nuclear power sales or something complicated like that. We will move through other media genres (information sites) as long as possible until we have to move into simple products. Of course people already are moving this way on many sites (ie. chairs.com), but in general people are parking most generics and starting with geodomains in terms of focusing on their first real world business development.
This is why geodomains are hot. In my opinion.
As a domainer, I am particularly pleased to see that someone is willing to shed light into this “hot segment” called Geo Domains. The current hype surrounding Geo Domains is almost deafening, so I applaud Sahar’s effort to bring balance and perspective within our industry. This, like every other niche in the domain name sector, has potential. So it is unwise to brand this niche as an instant monetizers. IMO, this blog’s theme has always been about the people involved in any given venture. The people that will devote their time, effort, skills and passion is what makes the difference between success and failure, regardless of the category - Geo Domains or not. Yes, it is true that, just as with any other domain, a name like SanFrancisco.com or PalmSprings.com will have inherent traffic and intrinsic value, but this is also the case with any other generic domain out there such as Cars.com or RealEstate.com; All of these are simply generic domains and the fact that they’re geographical in nature yields no special attribute. Every domain, regardless of their nature or niche, is unique. While MyrtleBeach.com may focus on hotels and tourism, Buffalo.com may focus on sports and architecture etc. So I don’t believe that one platform will work for all geo domain names, as it’s apparently being proposed. Being that all great geo domains are already taken, this segment thus becomes irrelevant as I see no appealing point of entry. All domains require effort, quality and determination to become sucessful. So, when I hear Geo this and Geo that, I also see and hear a lot of misleading hype. The industry will continue to grow and evolve in the years to come, and more so if we stand united as one instead of breaking into and forming different factions.
Cheers
GEO Names are hot! For .com .net .org .info and .tv, and I agree with you that this is for development and not for PPC business model.
If someone would like to partner with me develop my geonames listed below. Please contact me at emil @ king.net.
http://www.michigan.tv
http://www.belgium.tv
http://www.jersey.tv
etc…
By the way, they are not forsale.
Thank you,
Emil
“In my opinion, observing from the sidelines, majority of the people who promote Geo domains are doing so not because Geo is doing great but because they are invested in Geo.”
I don’t think Elliot and the rest of the crew are talking about GEO’s so they will increase the value of their holdings. I think they are genuinely excited about these names. Elliot probably isn’t making any money on his names yet, but he will. The Castello’s are definitely making money on their names. I’m not sure about all of the rest. I think there is a big difference between some people and their “rah rah”? postings about extensions v.s. the crew you mentioned talking about their GEO names.
As far as Vancouver.com, the site isn’t built yet so that is a misleading example. There is no content, it is full of broken links and I’m guessing they haven’t tried to sell any advertising yet. Anybody could take that name and build a quick but decent looking site and be able to sell tens of thousands of dollars in ads in a few months without too much trouble in my opinion. Can they turn it into a $10 million business is another question.
One reason I think a lot of people are excited about the GEO space is because it is attainable for them. To build a GEO site and make real money, you don’t need to have too much technical expertise, you don’t need to carry any inventory, you don’t need to build an ecommerce site etc.
@ Sergio - I think your post is right on. A GEO name is great because it is generic moreso than because it is GEO. Having them both is especially great.
And when I say GEO I’m referring to 100% GEO generics - not chicago.info, jersey.tv or even NewYorkHotels.com. Those aren’t the names that are getting all the promotion these days (or at least they shouldn’t be).
Gordon,
“And when I say GEO I’m referring to 100% GEO generics - not chicago.info, jersey.tv or even NewYorkHotels.com. Those aren’t the names that are getting all the promotion these days (or at least they shouldn’t be).”
…”or at least they shouldn’t be”.
Gordon, this is an interesting but incorrect quote and I am very sorry to inform you that facts–are–facts. The industry is growing by the hour and the stats indicate ALL signs of short and LONG term growth.
1) NewYork.info-2004-$28,086
2) NewYork.info-2006-$46,392
3) NewYork.info-2007-$70,000
1) Vegas.mobi-2007-$20,000
2) Vegas.TV-2004-$350,009
1) VisitFlorida.com-2004-$186,000
2) Florida.TV-$25,000 ANNUALLY via Enom.TV
1) BoiseIdaho.com-2007-$175,000
2) BajaCalifornia.com-2007-$95,000
3) FairbanksAlaska.com-2007-$11,361
4) AthensGeorgia.com-2006-$11,010
5) AllenTexas.com-2005-$7,544
1) Sacramento.org-2007-$24,500
2) Houston.info-2007-$17,000
3) Tampa.info-2004-$10,000
4) DenverHomes.com-2006-$35,500
5) iChicago.com-2008-$8,300
There are *several NDA Geo .TV’s as well. But…once again, I guess we shouldn’t mention Nebraska.TV, Macon.TV, Boston.TV, Montreal.TV, HamptonRoads.TV and the countless others appearing with every day passing.
NY
ewww - dot tv and dot info. might as well put some hyphens and numerals in them as well. Better yet, save your money and just setup palmsprings.blogspot.com because its just as bad.
This interview came out today. His opinion about Geodomains is historic:
http://www.associatedcities.com/news.php?newsID=152
@Sahar,
You make some excellent points in the quote below. A good geo-domain gives you a nice start, even a foot in the door. But the business is what counts in the end. If you build a content rich site that visitors value, then traffic builds and advertisers pay.
- Richard
“In a real business the domain, while helps 2%-5% generally, is nowhere near the value of the actual business. There are literally tens of thousands of examples all around you to indicate so while on the other hand, where you are coming from (exceptional geo domains, mostly travel related) the numbers falls short of 100 on a good counting day. You are making the exception the rule.”
@David
Honestly, don’t you think is a reasonable to say that your advertisers pay you that 1MM per year simply because of the prestige of being listed on your sites? They’re not paying for the traffic, right?
- Richard
Bahamas Hosting:
Depends how you define Prestige.
Believe me, these businesses aren’t charities. They’re on PalmSprings.com because they’re making money.
How do we know? They tell us.
When it comes to GEODomains they are the future of making money since they target a particular area.
If the GeoDomain is proper developed it can make the owner RICH beyond the wildest dreams.
A domain name like FremantleOnline.com , MyParramatta.com , ZagrebVip.com or RenoNevadaOnline.com could be set up as a website listing all the businesses on that website in that particular area (including Hotels and etc) and offer special deals to the visitor if he or she buys something on that website (20 - % off the price) that will bring more visitors to the site as many people shop for a GREAT bargain and GREAT service (which is hard to find).
Long live the GEO Domains
Thank you Sahar
@NY - we just have a difference in opinions here. My defense of GEO’s is with generic .coms
I have a bunch of geo .info’s but I know from experience that walking into a business and trying to sell them advertising on a .info site (geo or not) - where you have to explain to them what .info actually means is infinitely more difficult.
And on your list of sites, there are very few that are developed. You can’t point to those and say they are a success story within a conversation about building a business since no business has been built.
Gordon,
As far as developed geo .tv’s that have businesses running, examples include:
http://www.hamptonroads.tv owned by landmark communications
http://www.macon.tv owned by ABC affiliate
http://www.nebraska owned by ABC affiliate
http://www.boston.tv
http://www.tulsa.tv
http://www.oceanpark.tv
http://www.parkcity.tv
http://www.atlanticcity.tv
http://www.montreal.tv
Sorry meant OceanCity.tv not oceanpark.tv
This is a great list of developed geo .TV
Who says “Geo domains are asset rich but cash flow poor.” Another reason for me to invest in geo .TV
thank you,
emil
The Other Side Of Geo
Sorry to have to tell you this bud
But you dont know your #$%^ from your elbow when comes do geodomains.
its now how big a collection on names you have its how clever you are with your geo names that count.
Maybe your upset that most geo domainers dont use parking companys and dont have to use google adwords to earn a living.
Geo domains are the best way to get best revenue form advertisers direct with out having to use parking companys and other third party contacts.
I would also state that domainers who park there names and just work on the one model if feed from google or yahoo are asking for trouble long term.
and also reading your posts sometimes think your on diffrent planet
sp keep telling people that geo names are #$%^ and I will keep buying them
With geo names you dont need anyone to bring you in money and you dont have to work on traffic stats also.
—-answer—-
I don’t remember once I said they are not valuable or any of that sort. I said they are overrated in comparison to other categories, especially when it comes to building actual businesses. In term of “face value”, when it comes to cashflow/price paid (what most domainers do), they are overrated as well.
Have a great day,
Sahar
P.S.
This blog is “kids friendly” (always has been), please use proper language and in future comments, please avoid personal insults or your comments would not be approved.