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Archive for the ‘Domains’ Category

Show Me the Deal

FRANK: The opportunities come as people start to really feel pain. There’s still shock, but I don’t think the actual pain has really set in. I think there will be good deals come this fall? It’s like a sneeze. It’s still getting there.

ANGLES: But isn’t this broad-based downturn so much different than the last one? Then, people were saying the Internet was over. Internet advertising was a fraud. No one’s saying that now.

FRANK: That was really a stock downturn. Everybody’s stocks were in the toilet and no one could get free money any more for your Pets.coms. It was just a stock play, all driven by The Greater Fool. That was then. In some respects, that is replaying now. People are not in a rush to spend, and I don’t think it’s going to snap back.  It’s harder for people to raise money.

Unless the Dow goes back to 14,000, which it won’t, people will start to realize, by this fall, that this stuff is not bouncing back. The economy is not going well, and we’re going to see some serious panic selling set in and it’s going to create huge opportunity.

ANGLES: So what should people do?

FRANK: The name of the game right now is to keep your cash close. So if you’ve got cash and a good opportunity comes along, you can go for it. Look for distressed situations. But for now, save. There will come a time to spend, based on the prices that I’m seeing.

ANGLES: Isn’t one reason that prices of domains are not aligned with the economy because, no matter how hard people try, there’s not a liquid aftermarket?

FRANK: Exactly. And that’s a blessing and a curse. You can go in and buy names way below true value because not everyone knows about it. On the other hand, there’s no liquidity and names go for too much.

ANGLES: Have you been buying many names?

FRANK: We’ve been buying names the whole way. We’re buying a lot less now then we used to. We saw Gocart.com come down the chute a while back and we were hemming and hawing, should we? We came up with a sensible number and it went for three times that, over $90,000.

ANGLES: Wow.

FRANK: Right. And it’s not just gocarts.com. It’s everywhere right now.

ANGLES: Fair enough, but isn’t it in your best interest to say domains are expensive now? Whereas a few of years ago, when VCs and big money guys were prowling in the space, it was in your advantage to talk about how much names are worth?

FRANK: That statement is true, but I never felt that good “talking my own book,” because firstly people see through that, and, secondly, I’d feel terrible if somebody reads something I write, acts on it and fails. Total bad karma.

The truth is that today, while plenty of people expect way too much, some names are valued fairly, and others are cheap. But collections of portfolios still sell at a fairly large discount to intrinsic value because there are very few people who can hold each name to the light and correctly assign a fair value to each, so the PPC value of the collection becomes it’s default value (it meets GAAP rules and seems sensible) but that massively undersells the break-up value of most portfolios.  The breakup value flows to the buyer for free.

ANGLES: But who’s buying giant portfolios these days?

FRANK: Nobody. A great deal of this is moot because there are no corporate or equity buyers today—when most of the publishing world and corporate-America and the equity and investment shops are trying to keep their head above water and survive the worst global downturn in 80 years.

ANGLES: But isn’t that shortsighted? Don’t we all now know and accept that more advertising is migrating to the Web and that prices and payouts are just that things are down because the economy is a mess?

FRANK: That’s true. And you have a dominant marketplace, Google, which performs exceedingly well and could pay out much more. The next nearest market place, Yahoo, cannot pay out as well. Google knows that, so it pays out a lot less than it could, and so that’s just the way it is.

What you need is a disruptive force – or a series of disruptive forces – to come along and create another ad market place and create some competition. You can’t have a marketplace where the entire domain world is parked on Yahoo and Google and the power rests with the publisher, but that’s what we have.

13. Isn’t part of the problem that, in so many cases, there’s really no way to value a name in so many cases? That it’s really not like real estate because so often comps don’t exist?

FRANK: Yes but real-world comps exist. Take any name—and I’m pulling this out of the air—“Hair Styles” (actually, my wife just suggested it). There may be ZERO comparables for hair and hairstyle related names, but we know that a cut costs $15 at Supercuts and $600 at the Christophe Salon in Beverly Hills, then I know that products range from $15 to $100s, I know that a monthly rent or an ad in a national magazine can cost thousands or tens of thousands, so with that sort of back-of-the-envelop-thinking, and without much effort, I can set a floor of ten or twenty thousand dollars for the name.

That’s a price I’d consider paying, that would make it worthwhile to part with the cash and carry the name.

Then you have external factors such as competitors and other hair companies who may be willing to buy the name and relatively quickly you can see how something with no obvious comparables can still have a high market value.

There are always traffic that the name gets but we rarely actually price these into the value of the name. Traffic is just the bonus for owning the name.

Recession Hits Hard But Good is Unfazed

It took awhile, but the recession has definitely sunk its teeth into Google’s financial performance.

“No company is recession-proof. Google is absolutely feeling the impact,” Google CEO Eric Schmidt said in a conference call Thursday after reporting first-quarter financial results.

The company, as is customary, reported results that most business only dream of, recession or not. Its net income grew 8 percent to $1.42 billion and its revenue, excluding commissions paid to advertising partners, grew 10 percent to $4.07 billion.

It generated free cash flow of $2 billion for the quarter, the vast majority of it derived from money advertisers pay Google when people click on ads next to search results.

What is a Domain Name?

The Domain Name … A Business Essential!

In today’s business world, a domain name and a web presence are a must. Your domain name is your online identity, which allows internet users from around the world to locate and browse your web site 24 hours a day, seven days a week.

It can be used as your email address and your web address. A domain name can also be used as a supplemental pointer to your existing site name (ie. flowerdelivery.com may be bought as a separate domain name and pointed to your site www.bobsflowers.com. )

Choosing The Right Domain Name.

This is perhaps the most important step in the entire process of building your online identity, and due to the recent “gold rush” for domain names, it can also be one of the most difficult.

Over the past few years it may seem that nearly every good domain name has been registered, which is true to a point. This does not mean, however, that there are no good domain names left, you just have to be a bit more creative.

1. Your company name or something like it may not always be the best choice unless it’s a well known name, or actually describes your product or service e.g. “airfreightcompany.com”.

2. A word or words which describe what you sell, such as “airfreights.com”.

3. Something which is meaningless but memorable. The auction web site “www.ebay.com” is very well known, but who actually knows what an ebay is?

A memorable, marketable and brandable name is essential to create your internet presence. As internet traffic increases, businesses will realize that they can no longer ignore the internet.

Using Keyword Domains Can Increase Your Business.

• Think not only of nouns, but also of adjectives and verbs that describe how your product or service is used.
• Think of words both directly and indirectly related to your product or service.
• Ask your friends, family, associates and clients what words and phrases they would be most likely to use in searching for products or services like yours.
• Investigate which keywords your competitors use. See which keywords are used frequently on their pages and in their meta tags.
• Think geographically, and include keywords that describe the area you serve.

What A Domain Name Can Do For You.

If you decide to purchase a domain name that matches the concept of your business (instead of the exact business name), you might draw web surfers in search of that topic.

For instance, a music store that purchases “classical.com” might get visitors looking for classical music in particular. (If you wish, you can even register multiple domain names and arrange for them all to redirect visitors to a single central web site).

Having your own domain name makes your company look professional. If you publish your site through an ISP or a free web hosting service, you’ll never have complete control of your web site or email address and you will end up with a URL such as “www.acmehosting.com/mailboxservices”.

Web savvy visitors will recognize that you don’t own your own brand and may question your company’s size and/or ability. In contrast, “www.mailboxservices.com” shows that you have committed to marketing and operating your business professionally.

Incidentally, owning your own domain name lets you take that name with you if you decide to transfer web hosts or switch to your own house server. If you don’t own your domain name, you’ll have to switch to a new URL/domain name, which will destroy the branding that you built up with your first address.

Having your own domain name indicates you’re part of the new economy, it implies that you’re technologically up to date. If perception is reality, having your own domain name might just put you ahead of your competitors.