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Not that I asked for it, but The Planet had a really tough weekend, and a couple of our servers went down with it.
What what have I been reading so far? About Israel.com, and again about Israel.com, about Pizza.com, Juan Macias first TRAFFIC event, and a little about Geo names on DomainState. On the Geo note, a lot of nonesense, complete confusion between actual businesses and face value of domains. What these folks talk about is “Geo Brands”, not “Geo Domains”, where a whole lot more than a domain is needed to turn it into a successful investment, such as time, money, and execution. This is far off from what I understand Domaining to be, the art of investing in domains as commodities rather than as businesses.
And I’m a little tired of the PalmSprings.com example I keep seeing over and over by these same folks. Anyone has any idea how long it took to develop that business? Any idea what it took to develop that BUSINESS? This isn’t just about a great domain, it is about business execution. If you had such a domain today, could you cut off what the Castello brothers have done and do it overnight? If you paid market value for the domain only (500k+), without building a BUSINESS on it, would you see a profit in 5-10 years? It reminds me of FuneralHomes.com, a domain that used to make about 5$ per day a couple of years ago before we built a business on it. After investing millions in execution, today it is a profitable business. But would it still be a profitable business the same level as it is now without execution? My guess? It would still be making 5$ a day (or less) today if not developed.
Truth is, after thinking more about it, Geo domains, in term of Domaining, are extremely overrated. Are they overrated for BRAND/BUSINESS DEVELOPERS though? that I will leave for a future discussion.
Good to be back!
Sahar
Comment on Geos. You may read into this as little or as much as you like. For thise who doubt the value of Geos now, i look forward to seeing your comments in 3-5 years
Bottom line: 80% of the money people earn and spend is done so within 20 miles of their home. Their is not one single source of info that can not be included on a pure GeoDomain.com brand including all Yellow Pages, Radio, TV, Video, Blogs, Social Networking, Newspaper categories/ classifieds, Magazines, Brochures etc etc. What would you rather own and control for the future regarless of you capability now Atlanta.com as an example or Atlantainfo.com? The value for the future for every City.com , Country.com and State.com name is enormous for everyone. The potencial now is enormous for those who are able to make it all happen. In 1997 we paid 10k for Myrtlbeach.com and will do close to 2m this year, if our net is say 1m ate 10x net earnings it would be worth as a New Media asset 10m today which is conservative and could not be bought from us for this price as we still have a lot of growth and expansion left to go. Does this 10 year investment sound like something is not working and GeoDomains are over rated ? This will be my last statement on Geodomains. I will post this same thing on all blogs and will get back to work on the reality on what Geos are all about for those who fully grasp and take advantage of what you can do. For those who judge and operate them as PPC models I feel your pain. Thanks
This can all be followed on the GeoDomains industry leader for Blogs and Social Networking Geodomains.com,Simplygeo.com and Geodomainer.com
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Skip,
In 97 stellar domains went for a fraction of that 10K, it is the value of domains in general that went up, not just geo domains. And for your revenues, you are first and foremost running a business there. Would MyrtleBeach.com had 10% of that revenue if it wasn’t a developed business today? Looking at our own portfolio, having domains of comparable value, I know the answer to that quite well. What many in your community are missing is it is not the domains that make yours and Castello’s and few other successes, it is your business skills, determination. My take on these domains is from domain investing perspective, that is, treating domains as THE commodity, not your business development skills, money, and time as such. Now the next question would be are you better off having top generic domains in combination of business skills, funds, etc? From brand perspective, as I discussed many times before on the blog, there are brand managers on both side of the fence. Having generics mean less protection, more familiarity. Having specific brands means more work, but more protection.
Cheers
Sahar
P.S.
No offense but please no spamming within comments anymore. TIA.
Sahar
I thought you would never tire of my PalmSprings.com story!
A bottle of Cabernet, a fireplace…sorry, I digress.
In reality, we monetized PalmSprings.com fairly quickly. However, it took an insane amount of work and dedication. Yes, I personally went door-to-door and signed 90 clients in our first 90 days of operation (March - May 1998). It damn near killed me, but it was a irreplaceable experience, I was navigating a new world and I discovered crucial Geodomain marketing principles I wouldn’t have any other way.
The bottom line is that Geodomains (particularly major US city.coms) are the Rolls-Royces of domain names. Michael and I have quite a diversified portfolio of non-Geos and Geos. Even before they were developed, our Geos were consistently 80% of our top 20 revenue generators.
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I love the story and the many others David, just tired of it being used as an example for the value of geo domains as the commodity as it is not the domain but what you have done with and for it. Understandable you believe they are the best of the best, however, without development most of your peers in the geo space agree they are none performers (domaining perspective, parked pages). And with development, well, we’re back to other commodities which make the success of the venture now aren’t we? such as time, funds, skills, etc. I believe we’re more in agreement than we are not.
Just my two cents.
Cheers
Sahar
Sahar I do agree with you.
The TRUE value of a domain name is in the FULL development of it ONLINE you are spot on.
When it comes to GeoDomains they have to be also fully developed to get the full benefit out of the domain name in $$ value (revenue) which requires hard work and dedication.
Sahar -
Glad you are back online!
I think a lot of people are completely missing your point. Which I think really has to do with the work it takes to develop something with good potential and turn it into a stream of steady cash flows.
People don’t pay Donald Trump for a brown field that he owns, although they would pay him for some advertising on a billboard. they pay for the product after he has put the time and effort into dveloping a building on the land.
I can tell you this, BusinessJet.com is a much more valuable domain with content and a working model than just as a parking page. People are then paying me for the business model attached to the right address.
LearJetForum.com could be a nice site for LearJet owners to talk about their aircraft, but until someone puts the time and effort into developing the forum, it won’t earn more than a few cents a day.
I really think Geo owners (and I own some good and some bad geo doamins) should embrace the idea that this is a domain with valuable potential, if I diligently work to develop it and build it, it is no longer simply a domain but now a successful business and an integral part of the community. The geo domainer is then no longer a passive investor but an engaged entrepreneur.
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Exactly Steve.
Cheers
Sahar
99.9% of domains are of extremely limited value without development. Indeed they often represent a losing investment as parked domains frequently fail to cover their holding costs. The fact that they don’t suggests that direct navigation isn’t a great reason to invest in domains. I mean how often do you type in a generic or geo domain name without knowing anything about the site you are visiting? Really? I know I never do this. Instead I go to google. The fact that surfers cant be bothered to even enter msn or live or yahoo and instead type this into google shows that direct navigation is used by a very very small percentage of webusers.
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If you got into domains in 97,98,99 etc and were lucky enough to pick up beer.com, pizza.com, sex.com, palmsprings.com, florida.com etc…then development will see these domains sell at 10x EBITDA. But, if you’re starting out in the market today there is no way you will be able to establish a decent sized business. I very much doubt that any of the industry success stories we hear about all the time to could repeat their success if they started today. Much better for kids starting up to focus their time and attention elsewhere.
Take a look at Dark Blue Sea. They own 500,000 domain names and project USD5mm in revenues over 08. That’s about USD9 per domain per year. Hardly covers registration costs. Definitely doesn’t cover overheads. Their revenues have tanked because google lets advertisers opt-out of parked pages/direct navigation. DM isn’t a great way to make money.
Come on …. somebody …. tell me why I am wrong!