A comments to another post on Minus.com selling for $115K inspired this post which is about the business of domain investing.
Here is the comment that sparked the idea for this post:
“”yeah like you can pick and predict the next lotto numbers”
“these forums and threads need to have stories of people losing money.”
“I want to see stories here headlined, “Another 300 people lose over $10,000 this month”
“I guarantee you for every lotto winner there are 1000s of people losing money; unfortunately, silently, because all these stories are all one sided, choosing only to show the lotto winners.””
This commentator is not alone.
They look like domains as a lottery ticket, where if you get lucky you sell one once in a while.
Wrong.
If you want to think of domain investing as a hobby or as a shot in the dark, a lottery ticket that’s your choice but its not a business plan.
Just like the lottery those who play it most are the one’s who can afford it least.
Domainers who think this way are most likely to registrar crappy domains thinking they may get lucky once and hit it big.
Domain investing however is like any other kind of investing.
If you buy shares of stock do you think of it as buying a lottery ticket?
Or do you do research on the company, figure out the market, look at the charts and the fundamentals?
Or do you just pin up the Wall Street Journal stock quotes page to the wall and throw darts and buy whatever the dart hits?
Domaining is no different.
Buy wisely.
Spend wisely
Invest for the long haul.
Yes you may get lucky and sell a domain a month after you acquire it but its not going to happen with regularity.
If you buying a domain with knowing you would have to sell it or drop it when the expiration is up, you probably shouldn’t buy it or register it to begin with.
Now a lot of people what to talk about timing and/ or luck.
Hey if you have enjoyed success in your life you probably have had some good timing and/or luck and/or karma and/or God on your side, or whatever you want to call it at some point.
No doubt.
But also you make your own luck to some extent.
Wise decisions led to luck.
The more good decisions you make, the more likely you are to be lucky.
Yes there are lottery winners.
1 in 14 million I think are the odds for the Florida lottery.
No Bueno.
Don’t forget that many people who have won the lottery have lost it all later in life, gambling, drugs, divorce bad investment.
Bad luck following good?
Or just bad decisions making for bad luck.
If all you’re going to depend on is luck to get you through life; well then good luck to you.
For the rest, do your homework, make a plan, stick to a winning plan, adjust a losing plan and work really, really hard.
And may the force be with you.
Domain Lottery. Are you in the Game? 2 Cents a day to be a Player. by Rick Schwartz http://www.ricksblog.com/my_weblog/2010/10/domain-lottery-are-you-in-the-game-2-cents-a-day-to-be-a-player.html
Two different ways to see Domain Investing.
when you go to ebay and see the 14,000 or so worthless domains that people are trying to sell on any given day you can see where this guy is coming from. but i think there may be a difference thinking things through and dreaming a dream.
Frank
Rick can afford to play the lottery.
Most domainers can’t like the commentator who inspired the story.
Great post Mr berkens
I will throw my 2 cents out
A hobby or part time domainer can still be a profitable business imo.
Long term I agree with and hold. But the flip side is people who don’t have big amounts of cash need to flip and keep the dollars flowing to upgrade names.
I take my domain business people very serious and bust my ass off.
Whoever called this lottery and not investing, many of us our first year lost money. People called it quits. I’m thankful I stuck with things and at end of year 2, been profitable. First year domaining is lottery imo. Agree with that. We all went through learning curve. I did. Ron Jackson did and gone on record with his first year experience.
Hard work, research, learning from mistakes, what’s good what’s bad names. Its all learning. Read.
Domaining is investing. Powerful business model!
There’s a long thread I stated a few years ago on DomainState, called “Documented Domain Losses”, see:
http://www.domainstate.com/industry-news-6/documented-domain-losses-74779.html
The DS forum isn’t very active these days, since it was sold, but folks might find that thread educational.
Domaining is just a “word” game…and why should one take it seriously?
It is just like an other BS game.
Since I don’t smoke,drink or spend money on Condoms , money goes into this BS game.
With that in mind, I am having lots of fun and best of all making money.
Just sold a cloud domain for 2500 and hand reg for just 99cent.
Why should one take it seriously?
Didn’t they say, when you are having fun what you do, money will flow in…
Well said, Mr. Berkens…well said.
i am afraid domaining is in the middle ground
skill helps but luck is the biggest factor.
some names to me are reg fee and less, actually worse ,they need attention yearly
there are much bigger returns, avail ,leveraged returns ,as for the stocks the price now , thats now, reflect ALL metrics unless your an inside dealer.forget experts pc programes,have we not all lost massive GDPS as countries
madoff was right ,i guess.
an ape is shown every year to beat the so called bankers and he dont need 1000s per hr
its so clear when youve lost ,fortune?
Buying strictly “brandable” domains with no search stats is like playing the lottery especially if you’re starting out and its 2011.
Domaining if done right is still one of the greatest ways to invest. The problem is most people who attempt to do it and I’d put the number at over 95% either don’t know how to or simply don’t have the capital to compete with those who do.
the non-profit company that bought minus.com has surely LOST $115k
Two people buy a car.
One purchases a well cared for, perfectly running 2006 Honda Civic with 24,000 miles. The other, a rusting 1983 Dodge Omni with 98,000 miles and a heavy knock in the engine.
They set out on a road trip across the country….
300 miles away from their destination, the Omni throws a rod.
“God,” the Omni buyer says to the Civic Buyer, “why do I always have such bad luck!”
Luck is what happens when preparedness meets opportunity.
Domaining purely for resale is a bit of a gamble in some respects, as value in ‘brandable’ names is often based on someone else’s perception (and success at getting funding) rather than any specific or quantifiable factor. I buy a few of these, in the full knowledge they are the ‘lottery tickets’ of my domain stash.
The bulk of domains I buy are because they are short and mean something that other people already pay for elsewhere.
To me these short, high search/cpc names are an investment, like Mike Mann says on domainsherpa, to give a disproportionately higher chance of startup success.
Sure some will still fail but imo noone can call playing on a tilted roulette table ‘gambling’!
This post you should, “Stay hungry, stay foolish”
It’s *exactly* the same thing as poker.
Those who lose at it wander around muttering about how it’s all just ‘gambling’.
Those who make a living doing it know something the losers don’t, and probably never will…
a thing that adds mystery is the high number of ugly or nonsense domains SOLD every month, often at high prices!
I am shocked the term speculation hasn’t come up yet. I would say anyone who is going to be honest with themselves has to realize that there is a bit of luck/timing involved in a big trade to an end user. There is no gaur. of anything, therefore it is speculation, some speculate better than others, some can speculate bigger and increase tehir odds…. but it’s still a gamble.
To say I saw minus.com and knew a big math company would approach me and spend X would be BS, pure and simply, the fact is you HOPED or speculated that possibility.
When you put minus.com against other generic one word .com’s with end user potential I would say the reason it was bought at auction on the ” cheaper ” side was because most other speculators didnt see the bigger up side, so I would say based on a calculated spec the seller got lucky.
There’s no ‘mystery’ to it.
http://en.wikipedia.org/wiki/Expected_value
Stay on the right side of it and over time, you win money, even if luck is a short term factor. This is why there are winning, professional poker players, but no professional slot machine players, no professional roulette players.
The catch, obviously, is that domaining makes demands of the the right and left brain in a way that eliminates probably 95% of the population from ever standing a chance in hell of succeeding at it… and this includes a lot of guys who picked no-brainer, low hanging fruit in the 90’s, but would unquestionably fail at it today if they had to start over from stratch.
Josh: It’s highly unlikely that a non-profit math company bought it. It’s more likely that the owners of “min dot us” upgraded to the dot-com. I posted the evidence in the original thread, but it’s awaiting moderation approval, as it contained a few links.
Great post! In terms of hitting a large sale (for full value of the domain) I think there is a little luck involved just because of liquidity issues in the market. You may have a nice valuable domain but have to find a buyer to drop that initial investment.
Just watching the recent Sedo Webinar and the main message was to effectively sell you should lower your asking price (obviously they just want more sales). I also worked for a domain asset mgt firm buying domains for mud-size and large companies/marketing firms. We would find a domain that we all agreed was worth $50,000 but these large companies wouldn’t buy for more than $20,000 (even though they agreed with the $50K valuation).
So it’s like a stock market where you can buy shares of XYZ stock and it can appreciate. But to sell you can’t hit a button on ETRADE, you have to find a buyer that sees the same value and has the resources and desire to buy.
@George, thank you for the clarification. It of course increases the odds of an end user trade ( knowing there was a group out there who could upgrade to .com ) however the spec still exists and probably not something I would brag about factoring into my investment lol
There are less than 500 full-time domainers who ink out a living from domains full-time. Of those only 100 have the capital and assets to support sustainable growth. The majority of people in the 100 earn their money by serving the industry.
The rest of the bunch are what I’d classify as addicted gamblers seeing domains as a cheap bet. “Hey you never know, I’d spend $10 on Beer, how much can I lose.” The entire domain ca-coon these guys live their lives in enables their habit and perpetuates their fantasies with each hyping the other up. With sales reports that in their mind say, “see I could be next.”
They never question the madness that they took $4000 out of their pocket, gave it to GoDaddy and not only never made a dime, but threw more good money after bad for enhanced listings always looking for a reason or excuse to keep the dream alive. Maybe it escapes them when GoDaddy mints 13 millionaires. Don’t think it odd that I’m the domain investor and they are the vendor, so why are they millionaires, winners of the jackpot…
Perhaps it has something to do with the $50 million you flushed down the toilet speculating on dotMobi. Think about what convinced you to buy that? It was hanging out in forums with other addicts giving each other orgasms singing from the corporate playbook. Did you rely on each other as experts. The blind leading the blinder. When the successful guys in domaining weren’t buying these names and advising you on their blogs to go for a good dotCOM, what made you think you were smarter?
Do you have any idea what can be accomplished with $50 million. Guy 1″hey Charlie my friends and I invested $50mm in the next internet frontier- mobile. Bofa has it. Millions are powering up in China. People need to get a site on their phone that fit. This is huge. It’s been two years and we’ve made nothing. But we are seeing people make million dollar sales. There were 13 millionaires made at the place we gave the money to.” Guy 2 “I just bought this software company for $50 million, I’m going to break it up reposition the products and sell it to three bigger companies for $150 million”
You are easy marks. Lawful prey and you are getting played. The truth hurts, I know but hang with like-minded people and they’ll keep you in the game.
When I started blogging about Apple, iPhone and Cloud Computing people declared I’m not interested in that, I only want to read domain related news. So be it. Wait for Apple’s death blow to Mobi, fundamental change in navigation habits and bringing new blood online who never experienced domains and browsing to see the relevance. $50 million invested in Apple stock would be worth close to $200 million now. If you wanted to make money in the mobile revolution, everyone reading this had the chance.
“the owners of “min dot us” upgraded to the dot-com”
why? min.us is perfect
Yes, I wake up this morning, and see I am the commentator that inspired this story.
I recall a story of a world poker champion that after winning $7.2 Million he went on to lose it all back in his subsequent plays.
They say that the stock market is the great second casino.
And I would say that domaining is like the stock market.
You are right, you can do some research. You can do your due diligence, etc.
And we all may sleep better thinking that we’ve spent all this research time and that we are smarter than the next person. Or that I have the winning lotto ticket.
But I say this to all domainers, I am no better than you, and he is no better than I.
I read somewhere that if you put all professional mutual fund managers together, they do worse than the S&P Average.
I read this and thought, f*** why do people pay good money to do worse than throwing darts to pick stocks.
You know, they say everything is priced in the price of the stock. And they are right. Today, it is worth $8,000
No one will know that it will be $115,000 , 4 years later. For everyone of these, I can tell you for a fact, there are 100 others who paid $8,000 and is worth $7,000 four years later.
If someone can tell me where I can renew 360 more of my .Co domains at a good price, I will tell you a headline news that is worth writing about.
It takes money to make money – hand reg’s are for the most part, a waste of your time and money. In the past four months, we have turned down the following:
$5,000 for Together.TV (bought for $680 in December, 2010).
$3,000 for Broadscape.com (bought for $1,060 in June, 2009).
$12,500 for BeachMarket.com (bought for $300 in June, 2009).
$7,000 for DarkCastle.com (bought for $210 in July, 2009).
$20,000 for Soc.TV (bought for $260 in December, 2010).
I would argue that brandable domains offer a much better ROI that highly-searched keyword domains. As a matter of fact, our intention is to develop all of the aforementioned domains, one by one – if we happen to get a xxx,xxx offer before development, then we sell. If not, we hang on, indefinitely.
360 .CO domains?
Why? I mean its a complete circle but why on earth would you pick up 360 .CO domains?
I understand that .CO is a speculative investment like every other domain name. You speculate that you can buy at X price and sell later at Y price with a profit.
There are no guarantees in domaining! Or any other investment for that matter.
Golf course properties loose value if the course sells out and they close it.
Beachfront properties loose value when the beach erodes (hurricanes and other natural events) and the Government takes over the land.
It happens all the time.
But I normally see people hedge their bets when it comes to speculative investments (such as .CO) especially when you can NOT get in on the bottom floor such as single, double, and many premium key word domains.
I am just curious, what are the best 10 you picked up?
Cheers…. just my thoughts.
@DressPrinter.com
It is interesting you turned down a $20,000 offer for Soc.TV
that is a almost a 100x return on your money in less than a year.
Hell yeah, I would have sold.
Why didn’t you.
And I also noticed that 2 of the 5 were in alternate extensions.
Do you think other extensions is where greater opportunity exists in value.
@Robert,
Social TV is the “next big thing”, hasn’t even really taken off yet – VC money is pouring into Soc-TV start-ups. We see Soc.TV as being a six-figure domain, we’ll sit and see.
Regarding alternate extensions, I see .TV as being a solid investment, provided the domain is relevant to online-broadcasting or Social.TV. We bought Together.TV and Soc.TV as pure Social-TV plays. Other than that, I believe .com is King, .co has potential if it gets mainstream traction, which will take at least ten years.
In retrospect, it would have been right to sell. There is no social tv.
You were right on .co , so hopefully you did well there.
Per George / Josh
Some of the most profitable companies are “non-profits” – if there are no shareholders more money comes out in the form of salary – and the government loves it because they collect more Social Security and income taxes – many goody-two-shoes “non-profits” have an underline sleaze factor beyond belief !!!
I got in late and have only been buying .com’s for 13+ years. Buying domains for the purposes of selling them should represent LESS THAN 10% of your expected gross revenues each year – otherwise you will forced to sell something you do not want to sell – and at fire sale prices
Here come the liars….
“I acquired iGroupDatingSite.vc last year for $20 and just recently turned down a $50,000 offer… Group dating is the hottest new thing; we believe that it’s worth upwards of $100,000…”
This sort of fantasia has existed since day 1 in domaining, but its far more common today since the industry is now defined by a large rabble of chimps who actually believe it.
Domains@
It took me two years as well tow sell a domain.First year i bought pigeon sh** worth of $7k which later i drooped. Second year was a little better,as i enter in to my third year i had invested $50k and now i start to see results.
In my opinion it all comes out to:
1.knowledge
2.money
3. a little luck
Per the “Anon This Time” $50K group dating domain offer reference……
I have “group dating” domains, like Teabagging.com, 3somes.com, LonelyGirls.com, OldMoms.com, TeamSex.com, MatureDate.com, TeenLadies.com, OldEscorts.com, CheapEscorts.com, CheapHookers.com, CheapWhores.com, GrannySwingers.com, GrannyEscorts.com and FiveWay.com – and I have never got those kind of offers before – gosh I wonder why ???
I think cheapwhores should rebrand as ‘Lo-Cost’ 🙂
You can forget any top generic names…Period unless you have serious money
and you cant tell me that some of those people that got these were not luck
You hear about all those big sales when the real market is 5000.00 and under for a domain person. Yes you may have a high sale, but the majority will be less and if you weeded out all the crap on ebay,all the spammers, and elsewhere, what do you have ? Product domains,Brandable and Service Domains. Some would consider GEO, but obviously you are limited and again will never touch any real GEO like california.com or newyork.com. So the majority of domains will be of the 2 word variety or possibly 3 words.
That as a domain person is the truth. Which many people in the domain industry typically ignore.
Just check any typical domain sale whether its on a forum, ebay or anywhere else.
They all start out “PREMIUM DOMAIN”. “TOP TIER DOMAIN” , “ONE OF A KIND” or the ultimate insult to any common sense person. “RARE DOMAIN”
and then you see the domain mydoglikestobark.com
People-USE common sense if you want to be a domain investor. Invest in what you know and like and use your brans and research to be successfull…PERIOD and Good Luck
@ DressPrinter
You turned down nearly $50,000 on a $2500 1 year investment????
You think Soc.TV is going to fetch 6 figs one day?????
You should have taken the $$$$ and ran laughing all the way to the bank and then bought a bargain priced high quality $50k .com.
Agree with Kevin.
“You turned down nearly $50,000 on a $2500 1 year investment????”
No. It never happened. It’s fiction. They do this all the time.
They buy some borderline (or even worthless) domain name, then post about all the rich offers they’ve ‘turned down’. These are the same people who post Michael Jackson domains for sale on ebay @ $10,000,000.
They just totally don’t understand the game, but their inner Walter Mitty inspires them to lie to themselves and in turn, everyone else.
Add to the above- what’s most amusing is that they totally don’t realize how transparent they are to anyone who *does* ‘get it’ on domains. It’s a joke- an example of the blind hyping the blind with imaginary nonsense.
At the bottom, domaining is polluted with fantasists. To them, domains are lottery tickets because they completely fail to grasp the stuff that goes into domain names that are not “lottery tickets”, usually because those sorts of names aren’t available to hand-register, anymore.
The first time I went to eBay and saw hundreds of domains that were worthless trying to be sold for 5 figures and up I was stunned. I thought to myself, “People can’t be this stupid.” Yes, Michael and I acquired the majority of our names in the mid 1990’s, however, we hand reg names all the time. It is NOT hard to make money in this business, but you have to be extremely pragmatic. Over the years, I believe we learned our biggest lesson by developing names. It gave us a 6th sense as to what had real value in the aftermarket to endusers (we never sell to domainers). Those who invest in TLDs outside of dotCom and turn a profit have my eternal respect. It’s not a place I would go because dotCom is the gold standard in this business. It’s too easy to make money with dotCom unless you really have no idea what you’re doing.
“Yes, Michael and I acquired the majority of our names in the mid 1990′s, however, we hand reg names all the time. It is NOT hard to make money in this business….”
Glad to hear that; because anyone who thinks that hand registration even at this stage is “for idiots” obviously doesn’t spend a lot of time doing research on the latest trends. Keeping up with technological developments is almost impossible today – but very much worth the attempt.
And for those who put in hundreds of hours of research each quarter – in lieu of playing xBox, or Angry Birds -, they will be better positioned to win the so-called ‘lottery’; because if you are able to hand register a newly coined term that will become the basis for an entire industry (or, at least, business) before the rest of the crowd, you’ve very much earned that right to collect on domain name lotto.
It’s not an accident. If you’re eyes aren’t nearly bleeding each night from all the research you’ve done during the day, you’re not playing the game correctly.
@Gene
Well said.
With people out of work and in despair, others stuck in dead end jobs that don’t cover the bills, and most people’s perception that the only way out would be to own your own business (thinking franchise and 500K) we have no idea how blessed we are. All the hype aside, all you need is one domain and a smart idea and the world can be yours. Look no further than our own backyard to see Francois take an idea that was brilliant in its simplicity and borrowed equity from the 4-5 branded blogs he started with to get noticed. There were Mike, Franky, DomainWire, DomainJournal, Elliot me– all people with reputations but presented in a way where the combination of one strong headline after another created value for domaining and its bloggers they could never achieve on their own. At the time I was championing development and offering all kinds of ideas leveraging templates that took the cost and worry out of development. Then from left field comes Francois with the Drudge model applied to this niche. It gave him a gateway to an entire industry. One that the bigger companies should have developed so they could get stick eyeballs looking at their offers without having to compete for attention. Elliots Blog 64,000 visitors from thin air. These aren’t type-ins, these aren’t search, they are referrals and proof that traffic can be built from relationships and giving the visitor something of value in return for their attention. This is the key ingredient that restrain passive sites from their potential. Elliots ad revenue is bigger than a corporate salary and he is having fun. Why couldn’t this be you? Why are you buying domains based on Estibot metrics and getting excited that after two months you start to get some search traffic and 20-100 visitors. There are a million ways to make it in domaining that’s just one. If you own a TV domain all you need to do is set up an exact match name channel. Then search the site so you can hand curate a couple of dozen relevant videos. Redirect your domain to the YouTube channel and you have a TV station. Learn the tricks of labeling and tagging videos so these come to the top of the search results. Let people leave comments and subscribe. Write a press release loaded with keywords that will introduce your site to a large body of opportunity who has asked Google to inform them when there is content like this. Let’s say you have backpain.tv this release would be seen by drug companies, ergonomic chair companies, termapedic. They will click through to your site and the stat tracker will record their visit. With this little amount of work, you’ve brought the domain to life and demonstrate a concept they wouldn’t see from the name alone. They might approach you to be a sponsor or pay you to feature their videos. My heart bleeds for the guy who lost $7K on uninformed speculation. I’ve been there and lost several hundred thousand dollars. If you’re a gambler, great, keep doing your thing. But if you really want to make money from domaining, you hold the key.
I am working on stories about two incredible folks I met on the road. A 19 year old that never used a computer but when he needed a new phone he took a shot on iPhone. Later that day his motor cycle crashed and he was nearly a vegetable, in a coma, with many bones and organs broken, skull open etc. As time marched on and he got some of his faculties back, he started exploring the iPhone the only object within his range of motion. He came up for an idea for an iPhone app- very simple with no domain but an icon with an image that is universally recognized around the world. The app got some press and word of mouth and now 24 months later he is a millionaire, 66 cents in royalties at a time. Imagine if there was no accident and in using his iphone he stumbled into the domain world, drank the kool aid
and bought a bunch of lottery tickets hoping for the million dollar prize. The lesson, think outside domains.
The first and most important name you should acquire is your own. Navigation may change but your name won’t. One of the biggest differences owning your own name domain has built in is that there are hundreds of people with your same name that it would be valuable to. For people living in the US .US makes a great personal extension. You may be surprised with the stress for cash, that your name could be acquired. $1-2K seems like a lot when you can buy all those $6 domains. But it’s much cheaper than a $7,000 loss. If you want to do business online use this page to create a simple site that gives you credibility like Silver Ventures does. This seems like a small thing but branding will tell buyers that you know your stuff and they aren’t getting what they want on the cheap.
If your name is taken try adding “blog” or “plumbing” or “landscape” there will be plenty of prospects right out of the shoot.
You can start making names for others before you make a name for yourself.
Afternic publishes a list every two weeks of people who got lucky.
🙂
Not to say that on occasion, a worthwhile .com doesn’t come up to hand-register, but it is absolutely, positively to say that the a .com domain being hand-registered by David Castillo on the year 2011 is probably going to be an outlier and significantly more solid than what’s being hand-registered by your typical ‘domain forum member’.
Once you’ve really honed your perspective on domains- by way of having bought and sold enough of them, for meaningful sums of money- then you’re probably at the level where the occasional hand-registry might pop up and make sense… At that point, you’re ‘understand domains’ so you take opportunities when they come.
Anyone who hand-registers domains in advance of their ‘understanding domains’ is destined to lose money as fast as Godaddy will take it. You can safely categorize people who do understand domains versus those who don’t by how much money they’ve made selling them- not how much money they’ve imagined they’re going to make, in their minds…
The smart ones quickly realize the types of domains that are apt to sell, accept the fact that the opportunities Frank Schilling had are long gone and hit the aftermarket, hard, for under-priced names with a lot of positive upside. It’s really that simple, but $8 is just sooooooooooooo much easier to spend 1000 times over than $8000 is, once.
you’re = you.
Yes, I’m OCD like that.
Superb Article MHB 5*****
@Gene – you hit it right on the head
What we really need is a Domainer Challenge. Anyone can enter. $1000 of your own money gets you in. Buy, sell, develop – commit to a year of transparent domaining and let’s see where we’re at a year later.
How does Sedo allow Street.tv to place an asking price of $800,000? If Street.tv is worth $800K, how much is Together.tv worth? I’m guessing $2 million or more.
Bob
Unless the domain is under brokerage with Sedo.com I believe its an automated system where you can place any amount down as the selling price
@MHB,
No, I believe a seller is limited to a $10,000 asking price unless Sedo approves a specific higher amount. So, how does Street.tv get away with an $800,000 asking price?
As I said, if Street.tv is worth $800K, then it is time for all of us to revalue our .tv holdings. Maybe this is why the soc.tv/together.tv guy is claiming his domains are indeed worth over $100K. Time for me to go shopping for a few cheap .tv’s…
Domain investing is exactly what the person said, and MHB is wrong.
Many people got lucky as far as timing was concerned, and registered some names between 1985 to 2006 or there about. Some others had money to buy up a large portfolio, that way, a blind mouse was able to find an acorn here and there.
However, domain investing is stupid today.
The game has shifted. Google has stolen the internet.
The only smart domainer today are people like Facebook, where they can operate a domain without Google’s reach of interference.
Think about a typical domain name, how many times do you think someone actually types in a name directly? Very few times. So, a domain name is worthless. Google determines, by multiplex of domain names, how many visitors you can get on a domain, and from what countries. That is ridiculous.
I have a domain/website name SOUL.FM, I get over 100 visitors from all over the world, but not even one person from USA, where SOUL is popular, why? Google! That’s why. They have stolen the internet completely. Buying domains is stupid.
On the sales made by Sedo and other market places, I don’t trust any of them. How do I know people are not bidding on their partners names? I don’t know for sure.
The entire domain industry is full of shit.
The guy is right who said it’s like lotto, and the losers are never highlighted. MHB is wrong. And MHB is one of the lotto winners.
I have a domain/website name SOUL.FM, I get over 100 visitors from all over the world, but not even one person from USA, where SOUL is popular, why? Google! That’s why.
—–
Why should Google give a shit about your site if living, breathing people don’t give a shit about your site? It’s a zero user experience landing template filled with garbage… You think Google wants to rank that high?
I’m shocked you get SE traffic of any kind, from any market.
@Gene is correct
I’m not going to say much, because quite frankly it’s good for me and others if you believe otherwise as there is less competition. But HAND REG’S are VERY MUCH ALIVE if you know what you are doing. I do it every single day and have had enormous success. But you really need to know how to do it. For me I needed to waste thousands and thousands over a few years to figure it out. But now it’s so easy.
How about everyone cease buying names and dispose of what you have for what you can get and instead buy shares in $200 million offering for 40% stake of Mike’s company. You suck at buying names. He doesn’t. Think the dotcom opportunity passed you by, take a look at having a 40% stake in a million sale. Let a professional manage it for you. I know the money’s out there because 1/2 of this offering can be raised by dropping these deadbeat domains and redirecting the renewal fees from GoDaddy to a sure thing. 10 million @ 10= $100 million.
The guy above who says its better to buy $1000 domains for $8 than 1 for $8000. Wrong the 1000 cost you $8,000 to renew. The $8000 costs 8 dollars. Therefore you are looking at 16K versus 8 and if you know you can’t afford the renewal fees, you might as well rip up $8000 and throw it down the toilet. Everyone says “but it’s only $8” but those $8s times all of you is $100 million. Maybe you just don’t get it. GoDaddy is praying that you never will.
btw, above I threw out a quick and easy self-adminstered formula for making a TV domain into a real value. Check out Hybrid Domainer- that’s exactly what he did and was rewarded with $17K from Flippa. There is real money to be made here. Anyone can learn how.
The guy above who says its better to buy $1000 domains for $8 than 1 for $8000.
—
Reread what I said.
I pointed out that to the low level domainers, spending $8 1000 times is a lot easier than spending $8000, once. It feels more substantive. It feels more ’empire-like’ but really, it’s just slow death by 1000 cuts.
Show me someone who came late to the party and owns a ton of domains, I’ll show you someone who is going about it the wrong way.
Sending you my personalized BS platter to you!!!
Right ON.
********************************
1-800AUCTION.COM
***The entire domain industry is full of shit.****
As I wrote in the post that triggered this post…I’ve been at it a little over 5 years now.Got eaten alive playing in .mobi early on.Hand registered a lot of dotcom pigeon dung.Still I’ve managed to make a handful of lo-mid x,xxx sales.(3 this year)
My budget only allows for hand regs. at this time…so my “strategy” is -as one poster suggested-to read voraciously and try to predict the future based on where I think technology or society is headed.That means I have to “buy and hold”.That means my portfolio will necessarily be small.I can’t afford the “glorious past” of generic gold.So I must create the generic / brandable gold of the future.
Owen
I nominate this as The Idea of the Year:
“How about everyone cease buying names and dispose of what you have for what you can get and instead buy shares in $200 million offering for 40% stake of Mike’s company. “”
GenericDirectories & DBOStrategies will be the masters of search & bypass search engines, so the astute buyer with a plan & long term goal has the advantage – good generics have fantastic revenue potential for generic email & web address sales that no other directory company can offer – searching is changing & generics are the growing tools for company marketing methods, its easy for customers to remember & easy for companies to promote & cost effective –
Luck is when preparation meets opportunity. 🙂
@anon, i came late to the party and have over 1,500 domains. i got 99% of them in 2009 or later. how am i going about it the wrong way?
@1800auction, how is domaining stupid? who cares about google or traffic? a domain is a brand and companies pay up to buy that brand regardless if it even gets one visitor per month.
domaining is such an easy way to make money. i would rather hand reg 1,000 domains for $8 than to have one $8,000 domain. its good to have some more expensive names also but quantity is very important. just selling one or two of the 1,000 domains per year would cover the renewal fees of all of them. i agree that domaining is not playing the lottery, it is investing. there is always going to be an element of luck to any investment whether it is domains, stocks, real estate or whatever but its mainly all about skill and hard work.
good article and I can relate to what1-800AUCTION.COM…is saying..I got into the game and currently have 700+ domain names which I am putting on the market, but it is a lot harder than expected….just like everyone else I guess I made many beginners mistakes.
@ nr – happy to learn from you ..you make it sound “simple” though I am sure this is not an easy game to play…
At the end of 2010 Sedo alone claimed to hold 12m domains.
Sales in Q3 were 10,085 in number at UKP £13.3m declared (which isn’t an audited figure). The so that’s an average (in simple terms) of about £330 per piece.
So if your domain is parked at Sedo you might be part of the less than one half of one percent that sells during a year.
Now bear in mind there are always some headline sales at six figures and above its easy to see that a sale is most likely to be less than £300.
I’m not sure what the average holding cost of a domain is for a year but its likely to be over $10. If new domains, renewals and drops paned out at even the holding cost for domains at Sedo alone is $120M.
At about this time the top eight companies were parking 5.3m domains. I think when I last looked domain registrations were growing at 37k every 24 hours.
So if you take Sedo’s figures it could be a bet that pays out just .3% of participants. The only difference is that the organiser doesn’t stump up the prize money the punters do that.
Its about your attitude to risk, is the potential of a probable £300 a good enough return on a bet where you loose your stake at the end of each year. Remember its only those who are prepared to deal on the offfers they get who get anything.
It puts me in mind of Heroin, even though the bet failed the same wager is repeated every year. Along with this even when its their turn to win they refuse it on the basis that they will get better jam tomorrow.
derekT
Sorry ignore the 5.3m parked
what is Mike’s company?
too funny, Mike I second your motion …
“How about everyone cease buying names and dispose of what you have for what you can get and instead buy shares in $200 million offering for 40% stake of Mike’s company.”
However I think you should also start selling bumper stickers with Owen’s other quote:
“You suck at buying names. He doesn’t”
Alan
Start Printing the T-Shirts;
“You suck at buying names. He doesn’t”
Bruce
Worldwide Media, Inc.
Good stuff here. John Reese tied to point out this observation about four years ago at the LV TRAFFIC show, and I think he was misinterpreted. What he was trying to note is many people are playing the domain game like a lottery, rather an viewing domains and domain investing with the long-term fortitude required to be a success. He noted, also, that many people were passing great opportunities because they were holding out for the big payoff, rather than taking advantage of the chance to gain liquidity and buying power by taking a smaller sale price on one domain name, in order to further the longer-term acquisition and investment strategy.
There are flippers who have made good sales by chance, and these are your lotto winners. Investment, however, does not mean buying and flipping. One must spot trends, identify a niche or follow a passion. Sometimes, all of these factors, and more, will come into play. Often these categories do not overlap.
I would not expect to see too many stories about failure, unless that failure was actually a guide to avoid common pitfalls. This post, and maybe some of the comments that follow, is an example of that, without the cynical or sensational headline.
just buy and sell t-shirts rather than domains
if you pick a winning design, you may sell million of them
[..]For the rest, do your homework, make a plan, stick to a winning plan, adjust a losing plan and work really, really hard.
And may the force be with you[..]
Amen to that 😉
For all of those who are new to this industry the first thing to consider is what state your portfolio will be in in a years time, how many domains will be contained in it, and how much it would of cost you.
From there it doesn’t take long to realize that if your stuck with hundreds of fresh domains costing into the $x,xxx’s you were probably better off purchasing a few select few on the aftermarket (back ordered or auction – make offer via whois etc) and resting on these to develop or sell.
Quite recently I spent just over 2.5k acquiring a seasoned generic – highly commercial two-teir dot com that for it’s name sake might as well be an old dilapidated toilet block residing next to skyscrapers in your states capital city. Be it as it may it has little to no deprecation value (only appreciation) and it’s these types that are worth investing into.
Personally I’d prefer one piece of Gold than a thousand pieces of Lead as I’m not weighted down with renewal fees on domains that are new, unknown, are registered in some sort of funky ccTLD no one has heard of before and frankly speaking where to easy to acquire and reg.
The reality is this industry is opportunity and greed orientated (same as the gold rush period), with that in mind one needs to realize that the most if not all the gold has been mined and that silver and tin (lead) are left to crumb.
Newbie investors who are wise will hopefully look past these crumbs and consider the gold that can be acquired on the aftermarket, is under valued and a bargain to purchase.
@anon, i came late to the party and have over 1,500 domains. i got 99% of them in 2009 or later. how am i going about it the wrong way?
—-
I guarantee if you posted a list of your 1500 names hand registered 2009 or later, “what you’re doing wrong” would be blindingly apparent to anyone who understood domains.
@TinTin
“just like everyone else I guess I made many beginners mistakes. ”
My records show over 13+ years I have owned as many as 24,800 .com’s,
Over the years my portfolio has now been paired down to less than 6500 because I made many “beginners mistakes” – “just like everyone else”
“I am shocked the term speculation hasn’t come up yet. I would say anyone who is going to be honest with themselves has to realize that there is a bit of luck/timing involved in a big trade to an end user. There is no gaur. of anything, therefore it is speculation, some speculate better than others, some can speculate bigger and increase tehir odds…. but it’s still a gamble. ”
————————
I’d go along with that Josh, unless you know exactly how much a domain is making before you buy it then for the most part, its speculation.
You’re speculating it will earn more than it cost in PPC within a given time frame, speculating you can develop it and make far more money than it cost to buy and develop, speculating you can sell it to an end user for more money than you paid for it, speculating the owner of a non .com will want to buy your king .com you just bought in the drops, speculating a market or traffic will increase or the product will take off etc
Whether its a $8 hand registered future tech domain or a GEOrealestate.com domain bought for $50k+ in the drops there are no guarentees either will sell for a profit…only possibilities and probabilities….some may be better than others 😉
Until a domain is making a profit or is sold for a profit it is IMO speculating.
I’v seen plenty people plonk down $xx,xxx to $xxx,xxx on a domain in the drops and most are still sitting with a for sale sign on them 4 or 5 years later, some may never sell for more than what they were bought for…but some will at some point in time.
Luck & Timing are two important parts of a perfect storm. End users always have other options no matter how good the domain is.
With hundreds more speculative TLD’s coming in its going to increase end user options so its bound to have quiet an effect on the current market/value of existing domains, we just don’t know exactly what that effect will be yet.
..did I say speculating enough times for ya Josh 😉
Great post michael and great follow up and discussion as well.
There is certainly an element of luck in serious domain investing because despite the quality of any particular domain you almost never can be sure that an end user or other investor will have the desire and abilty to purchase your domain at its full value.
However, i am a firm believer that you make your own luck like mhb said. Its all about research, diligence and a LOT of hard work.
I did not get lucky in the sense that i did not pick up any super premium domains in the 90’s. But i made up for that by working my ass off and learning from others and being laser focused on increasing the quality of domains i was buying with every purchase i made.
I started out throwing away my money on garbage hand registrations and drops that nobody else wanted. I smartened up and started buying in auctions and expired auctions. I started making decent sales and realising what type of domains are “liquid” and used my proceeds to buy those types of domains.
If i sold 5 domains and made $10k then i used that $10k and bought one really good name that i could sell for $25k and so on.
In only 3 years of domaining full time i now have a portfolio which i think is probably worth several million $$$. It consists of some speculative names but mostly 3 letter .com / .net / .org domains and killer keyword domains. I now also own 2 two letter .com domains.
All of this was bought in the last 3 years and all of it was bought using profits from other domain sales, flips, brokerage fees , etc. No outside money and no investment of my savings beyond my initial startup which was $10k maybe.
So did i get lucky?
No. I worked 12 hours a day and watched and listened and learned and made smart business decisions.
To Andrew… You are 100% correct. IT IS WORK! Also what are your goals? Mickie Kennedy made $2-3 million selling domains between $250 – $500. Good job Andrew…
Andrew R
Ron Jackson should give you a call.
Ok, I am going to spill the beans
I too sold and received funds just last week for, drum roll please, for
$50,000.00
this was my largest domain sale to date for me. Before, I sold
GEV.Co for $3,000
Now, if someone can help me find a registrar that is doing a .Co transfer promotion for $15 or less, I will tell you exactly the domain name I sold.
“I too sold and received funds just last week for, drum roll please, for
$50,000.00”
Brilliant…. now that you have received the funds, I am sure you can share with us the domain that you sold?
I am sure you understand that there has to be some collaboration between statements made and numbers that correspond with them.
Just my thought
Cheers
@Andrew
It is interesting to see that you hold a lot of 3 letter domains.
I am a heavy believer in 3 letter domains holding up in value with the greatest predictability.
We have seen in the last few weeks 3 letter .nets selling for $18,000 a piece.
And I am in the belief that 3 letter .Co is at least as valuable as the .nets
What are your thoughts on this ?
I only got into this industry last year so was too late for the 3 letter .com s or .nets
but I think the way .Co s are going it is going to be ace.
@Robert,
For the same money, I’d buy a solid 3-letter .tv before I’d buy a 3-letter .co
@ robert cline
I like the concept of. Co but to be honest i do not own many and would never pay much for one.
I would rather own 1 LLL.com than 500 LLL.co domains.
Why speculate when you already know what works?
What a thread!
@Cline
I made offers on over 200 LLL.CO recently. The average demand price was roughly $600. I have also sold four LLL.co for about that price in the last month.
“Why speculate when you already know what works?”
All this is speculation. Even .Com domain names are speculation investments. There is no guarantee that they will be worth the same or more then what you paid for them.
The one thing that .Com really has going for it is a long track record of great numbers but never confuse that with a guarantee. Nothing is certain until you have cash in hand.
Now if there ever was an extension that has the best possibility to be worth more (if you chose your name wisely) it would be the .COM extension. Still its pure speculation with no guarantee, just a better track record.
Just the way I see it.
Cheers
I don’t want to turn this into a .CO thread… but there is lots of talk about .CO domains selling for some $$$ and I have not seen any thing to uphold this.
I am just curious as to where these names where sold.
Cheers
@Jack
All of mine have sold through Godaddy auctions or as a premium listing. I recently lowered prices to push a few out and cover renewals. No reason to lie or boast, I wasted thousands on crap. Been dabbling 5 years, got whole last year thanks to dot co and will turn a profit in 2011 for the first time-also mostly thanks to co. Speculation is certainly a point of this thread and owning a handful of LLL.co has created a better ROI than I could have found elsewhere. I bought 30 and got 2/3rds of my investment back on six sales in six weeks. I will gladly email you the Godaddy notices.
.tv’s are worth more than .co’s – .co is worth 20% of the same .tv, and only 1% of the same .com.
@Jack
BFitz tells the truth; I can vouch for him from personal experience.
LLL.Co true value can be up to $xx,xxx for the end user.
I myself have sold 10 LLL.Co in the last year mostly in the $500 – $600 range with GEV.Co being the best at $3,000
I asked the GEV.Co buyer what he planned on doing with GEV.Co since I was curious. He said, kid you not, “I own GEV in all the other extensions so I also wanted in .Co”
This, of course, gave me an idea. One of the potential buyers naturally for LLL.Co s are all the LLL.com owners.
Although I netted about $6,000 which is a far cry from the $25,000 I paid in registration fees, I believe, this coming year will be far better. I plan on also keeping many for my own use as well. I have spent countless hours on what sites to build for each LLL. It is kind of fun.
One other thing I must add about the
LLL ‘s is the finite supply, only 17,500 of these gems exist and many are already developed believe it or not.
It’s like having only 17,500 shares in one of the hottest domain stocks today, which can mean, COmpany, COrporation, COmmercial, COol, etc.
These are predictable cues to how fast .Co is going to rise.
They are already hard to come by.
Lets put a LLL.Co and LLL.com to the test.
Compare these 2 sites and you tell me which is more valuable.
http://jov.com
vs.
http://jov.co
@Robert Cline I here you! 😉 sold an org for 1.8k a month ago, all because the owner had the other extensions. Food for thought for domain investors using ‘speculation’ as their business model.
Again, I am attempting to keep this from becoming a .CO extension thread.
I have taken a certain amount of speculative investment in .CO with 11 domains.
Several I have plans on building out and the others I hope to be able to sell (maybe sometime in the future).
I think that is the key to this thread… Not all domains will sell right way. Like any investment there it is all speculation until someone comes up with the cash.
I would have hoped that I would have gotten some offers on a few of my .CO domains, but they just sit at Sedo and only get a fair bit of traffic but no offers.
I am in the process of starting to build out one of my LLL.co domains. The other is up for offers at Sedo. Both are actual words 3 letter words.
I am also trying to get my wife to make a site from one of the domains but she is not really too interested to sit behind a computer.
I am also toying around with the idea of building out a few more but I cant think of an angle to build them.
Egyptian
North Africa
USB Drive
Clam
Again… all speculative. I am hoping that I can make some sort of site out of the few listed above and turn a profit. Just need to figure out what I can do with them. I am trying to avoid making a common news site or sales site but I am open to ideas.
Cheers
@jayjay
it’s not just one extension. I am talking about potentially 70 plus extensions you can market LLL.Co to.
You have to realize since I have 750 LLL.Co s I have had to become an expert in LLL.
I am talking about potential buyers
LLL.net
LLL.org
LLL.com.au
LLL.co.uk
LLL.de
LLL.ru
LLL.asia
LLL.me
LLL.mobi
LLL.tv
LLL.us
.
.
.
I guarantee you one of these owners will buy any, and I mean any LLL.Co for minimum $500
Now, where are you going to get a 2000% return guaranteed like this.
You know, everything I have said, has a nugget of gold attached. And I know you can appreciate my thinking here.
So please help me by finding and letting me know any special .Co renewal discounts, special deals, etc. right here. Thanks in advance.
This is not meant to be rude, and I apologise if it seems so – I like to get to the point tho:
@ RC- “This, of course, gave me an idea. One of the potential buyers naturally for LLL.Co s are all the LLL.com owners.” – And yet no doubt you will be claiming ‘no knowledge therefore no bad faith’ in your inevitable UDRP defences. Oh, wait, you wont have the funding to defend because you can’t even cover your renewals. Hopefully the plaintiff, their lawyers and the panel do not come across this thread…
“I guarantee you one of these owners will buy any, and I mean any LLL.Co for minimum $500 “- this is your own personal guarantee is it? I mean, you have liquid funds available for immediate transmission to cover being able to payout on thousands of LLL.co that will not sell tomorrow? This is great news for .co investors – you now have a fairly respectable ‘floor’ price for your LLLs!
New people: be careful taking tips from ‘investors’ who cant even pay their bar tab.
@Robert Cline
[..]Now, where are you going to get a 2000% return guaranteed like this. [..]
“A nice classic two-tier commercially viable dot con like runningshoes.com” 😉
[..]So please help me by finding and letting me know any special .Co renewal discounts, special deals, etc. right here. Thanks in advance.[..]
lol – maybe name or godaddy, I’d do the rounds on all the majors If I was in your shoes ;)~
@LindaM
for heavens sake, keep cool lady
do not take everything so seriously
Every domain that I and one purchase should be with an eye towards development. However, having said that, if time does not allow there is no wrong, illegality, in making a proposal is there ?
Or is making proposals out of the question.
I generally will approach many companies that has the LLL in their company names. The general fact is “I planned on developing and building a site located at LLL.Co for the purpose of _____ , however, due to change of plans, I am selling this LLL.Co. I will be offering this LLL.Co for only a limited time to companies that … ”
@LindaM
You know what, I don’t think domains names are for you. You should keep your day job.
F***, pretty soon you would think you are living in Communist China, afraid of who you may offend.
Keep cool.
I am pretty cool most of the time, I just dont think its right that so much of your out-there commentary goes unchallenged when it has serious flaws (imo).
I classify your strategy of buying LLL.co’s and then approaching companies who already use that LLL mark on .com or another extension as medium – high risk.
Rightly or wrongly, I seem to remember those kinds of proposals have been held in UDRP proceedings as demonstrating clear bad faith behaviour. Under normal conditions I would never even countenance this on anything but the most generic of names – which seems limited to N,L,LL and geo’s.
“You know what, I don’t think domains names are for you. You should keep your day job.” I agree with this 100%, I would just add one word ‘selling’ – I dont think selling domain names are for you… yup you are right, I should spend LOTS more time during the day developing the names I bag in the night. Im glad we can agree on something 🙂
On the only day of Independence, 4th of July, let freedom ring type of day
there are always people that want to ruin your day of independence.
you want to bind yourself, align yourself with fascist communist extremist. That is nice.
Make sure to put those fears right at the forefront of everything you do.
I’ll even submit your application for immigration to Kim Jung Il. You’re certain to ace their party test.
@Robert
“You have to realize since I have 750 LLL.Co s I have had to become an expert in LLL.”
I don’t mean to be a stickler but didn’t you just post recently that you had 360 .CO domains?
If so, how can you have 750 LLL.co domains?
Just curious.
Cheers
Never mind…. I see that you wrote “renew 360 more of my .Co domains”
I missed the word *MORE*.
Sorry about my assertion.
Cheers
@Gazzip, Im just happy one person agrees with me after 8 years LOL
I agree with your assertion Josh to a point. Even if you have done your research and buy out a domain that makes X dollars per year… it does NOT necessarily mean that you can make it do the same.
In my opinion, it is all speculation until the point that the dollars are in hand. Once you have dollars in hand, it steps beyond speculation into profitability.
(sorry if I didn’t understand you right…I didn’t go back an re-read it. I am just going off memory)
Cheers
@Jack,
“Even .Com domain names are speculation investments. ”
“Speculation” – Only if you have not paid your “tuition” as I have.
This “.co” nation stuff and every other non.com is scarry for the naive and impressionable.
The Internet is a lot more (and less – if you are a non.comer ) than what so many newby friends want it (and try to WILL it) to be.
Do not confuse Passion with Reality (legal opinions) non.comers as you buy something for the purposes of reselling it which will ultimately end up “unused” on the fireplace mantel.
@Brian, I am not sure what your “tuition” consisted of but I assume time, money and experience?
I have spent several years, millions and millions of dollars and plenty of experience in resells to know every name I buy is still a spec.
You can take the biggest domainer in the world and every drop he buys is a spec, his past success and energy may help achive better ” odds ” so to speak but it’s still all spec.
There are many pieces of wisdom in this discussion. Will it become the young domainer´s schoolbook?
I wish there was a domainer school to avoid expensive beginner´s mistakes and withdrawal by frustrated domain offspring. Is there even need for a real domaining profession with certification? There are great information resources like this blog and shining examples of successful domainers. But are these enough for a sustainable industry base?
Domain Investing Isn’t Playing The Lottery, It’s money game of investors
I nominate this discussion thread as
“The Discussion Thread of the Year”
@nr – “domaining is such an easy way to make money. i would rather hand reg 1,000 domains for $8 than to have one $8,000 domain. its good to have some more expensive names also but quantity is very important. just selling one or two of the 1,000 domains per year would cover the renewal fees of all of them. i agree that domaining is not playing the lottery, it is investing. there is always going to be an element of luck to any investment whether it is domains, stocks, real estate or whatever but its mainly all about skill and hard work.”
Since 2009, how many of these hand reg’s have you sold to that cover your renewal fees? I’m not asking for you to answer in this thread but for you to ask yourself that question.
Better quality domains have some liquidity – a poor domain doesn’t have any. If you spent $8k on a decent domain and couldn’t flip it for a profit, you could perhaps break even or take a loss, but you’ll get something back; learn from that, do more research then get back in the game, albeit with a smaller pot.
A poor domain is a 100% loss – end of story – 1,000 of them can take all your capital, then it’s game over.
MHB, two questions:
1. Is WWMI going public or is this P/E placements Owen is talking about?
2. Would you accept domains instead of cash as investment? 🙂
Samit
1. no
1a. I don’t know what Owen has been talking about
2. no
Here is the best example I can use of timing Vs. Luck Vs. having a gut instinct
Last June I headed over to my 1st ICANN meeting.
I felt that the new gTLD’s were going to be approved shortly and thought is was the next step in the evolution of domain names.
Not that the new gTLD process was a new idea, it had been kicked about for a few years, and people were engaged in the process for years before.
Yet I felt the time was coming so I decided to invest the time and money it took to get into the ICANN world and start preparing.
In December I went to Colombia for the next ICANN meeting, then Monte Cahn and I formed RIGHT OF THE DOT, choosing that domain after hearing the phrases repeated time and time again at the ICANN meeting.
So we formed RIGHT OF THE DOT in January of this year and now in June the process that some people have been working on for years is now approved.
So did I have good timing yes.
Did I spot the right opportunity at the right time
Yes
Great timing yes
Good luck
Sure.
Did I call in a favor to get the biggest domainer in the world to give up what I figured out in an instant to be the best possible domain for this business.
Yes.
Was I lucky that Monte’s contract was just ending at that time
Yes
Did I hear about the new gTLD’s years earlier sure
But I didn’t think it was time until last year to get my feet wet and prepare.
So was it luck, good timing, gut feeling or all of the above?
Yes
That is how life works
The difference between investing in domain names and playing the lottery can be illustrated, as follows:
Imagine a probability of success spectrum, where zero (essentially) equals your chances of winning Lotto, and 100 equals the odds that Mark Zuckerberg has of convincing VCs to pour money into a second venture he’s dreaming-up in social media.
An amateur domainers, with good business instincts, may be running in the 15-20 range; meaning that he starts-out with about a one-in-five chance of making a profit over time – provided that he has the capital to make sustained (annual) investments in (a) supporting his existing holdings, and (b) adding new assets to his portfolio.
Experienced domainers may only have an improved position (vis-à-vis the amateur) of 10-20 additional points, i.e., they’re in the 30-40 range. So, even though from a mathematical standpoint it would appear to be a ‘losing proposition’ …it isn’t; because there are things that ANY domainers can do to improve their position on this spectrum, including:
(i) Partnering with developers and designers to build sites atop their best names
(ii) Carving-out a niche or two, where they become the major brokers of names in a particular (worthwhile) space
(iii) Sticking with only dot-com extensions
(iv) Researching (to no end) the latest technology trends, and positioning themselves, accordingly
(v) Thinking like consumers and end-users before they register (or buy) any name – to ensure that it makes sense
(vi) Avoiding (as much as possible) legal disputes, i.e., don’t register names that incorporate well-known trademarks
(vii) Pruning your portfolio on a quarterly basis to get rid of any dead wood
Again, even though there are no guarantees, it’s up to each of us to put the odds in our favor — and move further up the spectrum.
I think to sum up things, the bottom line is:
A few hundred domain investors are making a lot of money. They are skilled business minds and many have had the luck of being in the right place at the right time and made the right domain acquisitions and domain sales.
A few thousand domain investors are making money on some of the domains in their portfolios but losing money on most of their domains.
But the vast majority of domain investors do not know what they’re doing at all, and keep registering the most ridiculous domains imaginable, and have been and will continue to lose money, yet refuse to let go of the dream that they will be the next Frank, Rick, Mike, et al.
🙂
I think decent names can still be had for reg fee. Here are some I got today:
flavorizerbars.com
freecadprograms.com
mensthermalshirts.com
quote of the day: MHB “1a. I don’t know what Owen has been talking about”
I quite agree with you. You may make an amount of money with it. Lottery is a miracle.
Actually I think I was talking about this:
Half of TVs to Have Internet Connectivity by 2015
http://www.cnbc.com/id/43641280
“Netflix, Amazon [AMZN 213.19 3.70 (+1.77%) ] and Apple [AAPL 349.43 6.17 (+1.8%) ] are obviously banking on the idea that the cloud is going to be a game changer for home entertainment and that your TV is nothing but a big iPad that you shouldn’t touch,” said Patty Edwards of Trutina Financial and a ‘Fast Money’ trader.
http://www.cnbc.com/id/43641280
A very good post. I really love to play lottery and raffles since young age and would say that is one of the most quick way to make money. I am regular reader of latest news on lottery etc. and just subscribed the same for your blog. You have indeed very beautifully outlined the importance of lottery. Once again thanks for this valuable post.
@ Owen
“the cloud is going to be a game changer for home entertainment and that your TV is nothing but a big iPad ”
That is a no brainer – the real task at hand is anti-trust for at least 5 years that I am aware of – i.e. will cable providers like comcast (now xfinity) or baby bell spin offs like qwest (now centurylink) be allowed to regulate how fast a connection a competing service is allowed to use vs. their own movie channels, for example.
Essentially – if it takes 2-3 times longer for a competing service to load a movie vs. the movie service provided by the internet provider – well that is the fastest way to eliminate competition.
@owen –
And forgot to mention that I why I own CheapMovie(s).com – as an eventual competitor to movie services provided by internet / cable providers
Click the link.
How many “domainers” are like this? I mean, we all laugh, but it’s pathetically sad. Here we have a person who just got done lighting THOUSANDS of dollars on fire and now has nothing to show for it but a series of $8-$30 worthless liabilities.
I am hard pressed to identify a single name on that list that I’d take if it were pushed to my account, free of charge, yet he sincerely believes that they’re not only worth registering, but that they can be sold for a profit! Of course, it won’t happen… and once renewal breaks his back, this same person will wander into forums and into blog comments and lament about how domaining is just a “lottery” and how its all just “luck”.
I will never, ever, ever understand why people register names like that but they do- and they’re not uncommon. They’re common. They’re very, very, shockingly common. To them, domaining is playing a massively low expectation, 1,000,000-1 shot, $8 bucks at a time lottery.
Those people need to understand that not everyone is like them.
http://www.thedomains.com/2011/07/03/domain-investing-isnt-playing-the-lottery-its-investing/#comment-88593
“How about everyone cease buying names and dispose of what you have for what you can get and instead buy shares in $200 million offering for 40% stake of Mike’s company. You suck at buying names. He doesn’t. Think the dotcom opportunity passed you by, take a look at having a 40% stake in a million sale.”
@MHB – I assumed he meant you, now I think it might have been someone else.
@owen – I’ve really enjoyed your comments on this post, a lot of home truths there, cheers!
I tend to hold my names 2-3 years before selling them, sometimes longer. Sometimes I get lucky and will do a quick flip. An example was BasketballCenters.com I picked up for $4 and resold it 3 months later for $60. It really depends on the domain holders need at the time really.
We purchased a domain name a few years back for $500.00 and a few months ago sold it for 2k. Was this luck? Yes and No. We were lucky that the guy sold it to us for the price we paid. But the bottom line is that we made a sound investment that we knew in time would pay off. So the reality is that we made our own luck by making a sound investment.
I don’t know about sticking with only dot-com extensions. Our portfolio of 222 domain names contains a lot of extensions like .com.tw and .co.uk. We feel these will continue to rise in value over the years and occasional appraisals confirm that position.
This thread really sparked our interest since we are currently auctioning our entire portfolio online as a single 222 domain name package investment. We’ve spent around eight years building our portfolio trying to focus on unique, generic, and brandable names. Will somebody else see the value we see in our portfolio? Guess time will tell but one thing is for sure, we’ve made our own luck simply by accumulating names that are unique, generic, and brandable.
I think “Pruning your portfolio on a quarterly basis to get rid of any dead wood” is very sound advice. A few years back we dropped around 100 names from our portfolio, really should have dropped them sooner. Had we followed that advice we would have saved some money on renewal fees. I know if our current portfolio doesn’t sell we are going to drop a few of the names because we don’t see any value in continuing to hold them, besides that we will continue to build the portfolio and stick it out till the right buyer comes along..
I think MHB is right on the money when saying “Buy wisely. Spend wisely. Invest for the long haul.” That’s advice we’ve been following for years and really anyone investing in domains should follow that advice. When buying names we always consider the long haul. In 2006 one of our domain names drumseals.com appraised for $238.00 then in 2010 it appraised for $2,300.00. So investing in the long haul can make the difference between making a profit and taking a loss.
This is really a great thread and I’ve enjoyed reading all the post.
If you can’t sell it in a year, then sell it and find another.