According to a post on Poker News Daily, the eagerly anticipated ruling on the fate of 141 gambling domain names that were seized by the state of Kentucky has been delayed until tomorrow. The delayed ruling was attributed to a computer glitch in the presiding judge’s office. This ruling could be impactful to other domain owners - not just the owners of these 141 domain names or even to owners of other gambling domain names. In one way or other, this ruling could have an impact on any domain owner.

At the hearing last week, domain owners were well represented by the Internet Commerce Association.

I read an interesting blog post written by Tim Berry on Entrepreneur Blog Network. Tim discusses a brief email conversation he had with the owner of SWOT.com who had cold-called him regarding the sale of the domain name. It’s interesting to see Tim’s (and his reader’s) perspectives of domain values vs. my own perspectives.  I was going to comment in his post, but it was fairly long and I decided to respond below.

Just wanted to clear up a couple of misconceptions about domain names.  Just because there isn’t a website, doesn’t mean there isn’t traffic as your reply to the domain owner would indicate - “However, you have no traffic. [Ed. note: He doesn't. The domain is owned, but there's no site.]“ Direct navigation traffic, where people type their keyword and .com, is one of the most powerful forms of traffic.  Before CNN paid $750,000 (yes, $750,000!) for iReport.com, there was no website, but some people probably typed-in the domain name.  The name sold for such a high amount because CNN needed it and the previous owner didn’t need the money enough to sell it for less.

Domain names are virtual real estate.  I live in Manhattan, and behind my old building on 34th and 6th (Herald Square), there was a parking garage.  If a developer wanted to buy that space to put up a building for condos, he couldn’t tell the garage owner he would pay him based on a parking revenue multiple if the owner didn’t have a desire to sell.  The developer would have to do a ROI calculation to determine how much he could afford to buy the space for depending on his business plan.  The price he could afford and the price the garage owner would sell it for could be vastly different, but if the developer really wanted or needed that space, he would have to spend the money.

A real world real estate example is that of Donald Trump trying to buy Vera Coking’s home in Atlantic City.  Was her home worth what she was asking?  Probably not, but her reluctance to sell caused Donald Trump to alter his development plans.

Even in the tough economy, domain names continue to sell for record amounts of money. While virtually all other types of investments have seen pretty large decreases, domain values have continued to increase.  An unknown lawyer in Iowa owning a name like TrademarkLawyer.com would get him much more business than simply using HisName.com.

I am not in the travel or real estate business, but owning Lowell.com and Burbank.com gives me a considerable leg up.  Even before I developed them, they had significant traffic, and it has grown since developing.  Yes, some names like TropicalBirds.com wouldn’t get much direct navigation traffic on their own.  However, after owning and developing it, I’ve seen a considerable increase in traffic and return visits.  It’s much easier to remember than a cutesy web 2.0 domain name like CoolTropicalBirds.com or something like that - and I think Google prefers keyword rich domain names.

In any event, domain names are worth what someone will pay.  Knowing the market (and having a MS in Direct & Interactive Marketing), I would pay $5,000 for SWOT.com right now, so that’s the price floor.  I don’t really have a plan for the name right now, but I think it would make a great site for companies to learn how to perform a SWOT analysis. In this day and age, many brick and mortar companies face a huge weakness in that a competitor’s domain name is the industry defining domain name and it’s difficult to overcome.

I will be the first to admit, I don’t like how Burbank.com currently looks. I don’t believe the current site is attractive or would make people jazzed about visiting the city of Burbank, California - a great city with a ton of activities. Don’t get me wrong, the content is good, but I just don’t like how it looks. So, I am doing something about it and building a completely new website.

When I first launched Burbank.com in July, I was under the gun. Every day that I wasn’t live Google links were being lost and the site’s ranking was being impacted. The site was previously a great Burbank online newspaper, but once I purchased it, the owner redirected the links to his new site. I feared losing Google’s trust, and I didn’t want to make it difficult to regain position once the site relaunched.  It was also very close to my wedding, so with many things going on then,  I essentially built a makeshift site. There are few images on the site, and there are Adsense ads to generate a bit of incremental revenue. This isn’t the idea geowebsite, in my opinion.

After spending the past several weeks working on the new site, I am getting closer to relaunch.  I am hoping the relaunch will happen next week or the last week in October. When I do relaunch, I will write another blog post about what I did and why, to help others who may be in my position. So take a look at Burbank.com now so you can get a good before and after comparison when the new site is launched.

Our industry still has a bad reputation from misdeeds that occurred years ago before trademark laws were actively enforced on domain owners. While there is still less obvious cybersquatting today than years ago, the industry continues to get a bad rap from people who aren’t familiar with it due to events that occurred years ago.

At a wedding this past weekend, I was speaking to a person who is the CEO of a multi-national venture capital firm. In addition to retail, financial, and oil company holdings in the US and Europe, he also owns a professional soccer team. When I told him about my business, he mentioned that he was somewhat familiar with it, having dealt with a guy who tried to sell him the .com of his full name for $20,000 (his name is not common at all, and all Google results for his name are for him). He didn’t outwardly say it, but I could tell he didn’t think domain investing is a legitimate business.

When I explain what I do to people I don’t know, I find that people either have no clue about the domain industry or they have a negative opinion about it. I frequently find myself defending our industry to people I meet, explaining that the domain names I own are generic names that don’t infringe on other brands. It’s frustrating that misdeeds in the past still affect us today.

I am looking to sell 887.com. I will consider offers for it for the next few days. Please post an offer in the comment section or via email. The name is not parked, so I don’t have traffic stats for it. This is a pretty good nnn.com name in my opinion. If you want to make an offer via the comment section but don’t want me post your info, let me know and I will keep your name private.

Again, 887.com is up for sale, and I’d like to sell next week.

I was watching the Fox Sports channel with my brother, and I saw an ad for Xoom.com, a global money transfer service. While their demographic targeting was smart (we were watching a soccer match), the domain name doesn’t pass the tv or radio test. Apparently, “xoom” is pronounced, “zoom,” so the announcer sounds like he is saying “goto zoom.com” when in fact, he wants people to visit xoom.com.

This is a major reason why those brandable web 2.0 domain names del.icio.us, flickr.com, and now xoom.com don’t really make sense and could cause major confusion.

I am not an active bidder on Namejet at all.  In fact, I’ve probably backordered less than 15 domain names there it total - with about 10 in the last few weeks alone. One day a couple of weeks ago, I decided to use “Lowell” as a keyword to see if there were any pending drops happening that might help bolster my Lowell.com network.

Lo and behold, I saw LowellRealEstateAgents.com dropping. I had previously picked up the .net for registration fee, but Domain Active (a subsidiary of Dark Blue Sea, parent of Fabulous) was selling the .com for more than I was willing to pay.  Since the difference in their price and my expectation was so far apart, I didn’t even inquire about it.  Surprisingly, I placed a backorder and was able to acquire it for just $69 as the only bidder.

A couple of days ago, I was doing some Namejet searching and I came across CheapEntertaining.com. While it’s not a cream of the crop name, I think it is fairly strong - especially in light of the tough economic times. I was the only person who backordered the name, and I was able to acquire it for $69. I did a bit of research, and I found that this too looks like it was owned by Domain Active.

Clearly the name wasn’t making much money as a parked domain name, otherwise they wouldn’t have dropped it.  However, I think this is a pretty good name for just $69. Now is a great time to keep your eyes on the dropped lists. Some scanning programs may not pick up on the good names that don’t look like they’d have strong revenue stats.  IMO, it sometimes takes a gut instinct to see a good domain name.

Any way you look at it, the economic situation is impacting nearly all domain investors. Less PPC and somewhat lower sales means even less revenue for the many in the industry. Without these two revenue streams being at full strength, it’s getting more difficult for domain investors to pay bills. Since you can’t pay your bills with domain names, liquidity problems are something that many domain investors are facing.

If this is the case for you, there are at least two viabile options - both of which involve using your domain names as leverage. Domain Capital and Digipawn are two companies that are willing to give loans to many domain owners with their domain names as leverage. These companies are domain experts, and they are able to value your domain names for lending purposes.

If you are in need of a loan, visit these companies’ websites or drop me a note and I will send you an introductory email.  I don’t work for either company, nor do I receive a commission for referrals.

I’ve been doing a bit of thinking about the economy and how a continued downturn will impact the domain industry. While domain name values have remained consistently strong, I think liquidity may eventually be a major issue.  Although domain names will retain value (as witnessed by the TRAFFIC auctions that showed some strength), you can’t expect to pay your hosting, development, equipment, office space…etc. bills with domain names. Some great domain names don’t generate consistent or adequate cashflow, but are still very valuable.

That said, I do foresee some mergers and acquisitions in the domain space. One of the most difficult things to do when mergers occur will be valuing company assets, including domain names.  Whenever I see evaluations of major companies in the domain space, they typically lump all of its domain assets together and append a value.  Oftentimes, the value of the whole seems well short of the true value of it’s parts.  Saying “their 10,000 domain names are worth about $2 million” is like saying a company’s 10 offices in New England are worth $2 million.  This doesn’t make sense since each domain name needs to be evaluated based on a multitude of factors, which domain experts can only answer, not stock analysts.

At the moment, there are many domain appraisal services available, but I really haven’t seen one that is consistently accurate.  From my own limited experience, Moniker seems to have the most accurate appraisals that I’ve found, although Sedo and Afternic provide reasonable appraisals as well. Judging by the experts who make up Domain Consultant (below), I think this would be the place for a company to get the most accurate gauge of the value of its domain names.  The price may be restrictive for domain investors who want to know the value of one or two domain names, but for companies who are in the midst of a merger, using Domain Consultant’s services could be worth millions of dollars.

Certified Appraisers:
Adam Strong
Richard Lau
Mike Mann
Brian Benko
Dan Warner
M. Fiol
Don Ham
Frank Schilling
Slavik Viner
Donna Mahony

With more and more domain investors beginning to develop their domain names (or exploring development options), I wanted to let you know about a free SEO webinar offered by BuyDomains.com. The webinar, which will take place on October 23rd at 2pm, is aimed at small to medium sized business owners who are looking to grow their web presence. The details are as follows:

SEO for Small Businesses

• The relevancy and importance of targeting the right keywords
• Why page titles and meta data matter
• Domain & URL structure advice and tips
• Internal & External linking
• How Webmaster Tools can help your site
• Tips on site structure for local search
• The importance of directory listings
• Content, content, content!

To sign up for the webinar, register on Namemedia’s website and you will receive log-in information via email. This could be a good way to learn some SEO tips at no cost and with no obligation.