Domain Development Options

Other side of the coin…

I just put $200K into a project (and about 16 months of development) and I’m canning the whole thing at the end of the month (for now at least). The project was a “billion dollar idea”, but I don’t want to play chicken with my bank account and my heart’s not into the project anymore.

It seems that I get a high $XXX K or low $x M offer on the domain about once every 2 or 3 weeks (mostly domainers or small entrepreneurial outfits). Not a single prospect was interested in the software, only the domain. So I realized the best route was to just hold out for that $xx M figure and when it comes it will be a good day. There was a comparable sale to my domain well in the $XX M range last year and the company, which was public, only purchased the domain name..not the code that was on the site.

What did I do wrong? I picked my most valuable domain name and decided to run with it. I didn’t want to waste those 10,000-12,000 daily visitors going to some parked page. Instead, if I were to do it all over again, I would pick the easiest to monetize domain I own. Maybe one worth $10K to $20K range, do a mini-site on it and then keep on adding more content pages. I did one site in particular with aeiou and the revenue went from about $3/day to about $8/day average. It just got picked up by y*hoo on the first page and the last 2 days have been $18, $20 respectively. This is just some simple 5 page site on a good domain I got for around $6500. Imagine if you add another 5 pages, etc. By the way, not all my mini-sites are doing this well. Most are getting the same or better but some are doing a little worse because it isn’t indexed in g**gle and the CTR is lower than parking. I look at these sites as a starting ground for what might be a good site to add to.

The “big site” I did was burning through $14K/month (developers, rack space, servers, network ops, insurance) and that was just the tip of the iceberg. I was dreading the day that I got millions of users since I wouldn’t be able to handle the expenses without funding and I’ve heard too many horror stories about people losing their shirts dealing with vulture capitalists. By the way, it was a UGC site (user generated content) and I totally underestimated the attack from the spammers. I was totally out of my league in this business both in capability and in funding.

Interesting article – I would be interested in hearing how the transition out of corporate America into full-time domaining came about as well as challenges you have faced in the first year.

Elliot —

It appears you and I are going through some of the same things at the same time. Thanks for sharing your thoughts. They are really helpful.

Thanks,

Lou

The best domains to develop are words that are very focused on something very specific and self-contained and where ads are content. You also want topics that many different people look for once in a while, and not topics that a small number of people are obsessed about on the daily basis. Plus the topic has to be something these visitors must be ready to spend money on.

Daycare.com and PalmSprings.com are great examples of these domains. Once domain like that is developed, competition can not touch you. People from all over look for daycare and visiting Palm Springs once in a while. Once they find these two domains, they will generally find all they wanted to know and they have no need to continue looking for other sites. Competing against sites like that is like herding cats.

When visitors are obsessed about the topic, it is much easier to herd them with a site that has better content, regardless of how good the domain is.

Hi Elliot:

Great post. Thanks.

Can you elaborate a little more on the revenue you from “travel” on your sites?

I am not interested in your own numbers, just info like how can I without fully developing a business, get travel revenue on my GEO site? Are there certain ad networks or companies that offer commissions for placing travel ads on your sites?

Thanks,
Mark

***UPDATED BY ELLIOT***

I use IAN (Hotels.com) and WCTravel (travelocity) for my sites using a white label product that makes their platform look like my sites. I am using IAN for FrenchRiviera.com and WCT for Lowell.com and Burbank.com. I receive revenue for hotel reservations and flight reservations.

Thanks Elliot.

Great info.

Much appreciated.

Also, for the travel revenue check out HotelsCombined.com. That is who AEIOU recommended for my new mini site LasVegasBudgetMotels.com

Great Article… but you should elaborate on Evolanding.com more, for I plan to place some of my domains in their care. They take the domain and add realtime relational content and have developed an impressive network of product and service advertisers/affiliates. I am not real sure on money results right now, but will soon be finding out. Again, keep up the good work!

Developing will pay of sooner or later, it doesn’t have to take much time to add a little content. Buying quality content from i.e Helium will pay off very soon if the domain is at least decent.

I would like to encourage anyone to also try MissPark.com as an alternative to parking and WhyPark. It will save you time, and increase revenue in the long run.

Thanks for sharing. I’m launching BaltimoreHarbor.com using a wordpress theme and am just beginning to get original content developed. At first, we will monetize through adsense then hit the street to get hotels and others to advertise in exchange for featured articles, etc. Cost of launching: $275 and unlikely to hit $350 over the next year. Content being developed by a local writer who will get a cut of any profits. The site previously was a winner consistently doing about $100 a month in parking revenue.

Although I never post, I’ve been following and dabbling in the domain market for quite some time. I’ve found myself in the same boat many times (should I spend the time/money to fully develop or should I just throw up a minisite and grow it exponentially).

In the past I’ve even resorted to something I haven’t seen mentioned thusfar … I partnered with a fully rounded programmer for a cut of potential profits. I thought that would solve a lot of the ‘upfront out of pocket’ issues but so far it’s only given me more headaches ( I could elaborate but I’ll save you the slather).

I finally opted to offer a couple premium domains for auction, reinvest those profits to do a slow, focused development on two niched names. Of course I have my fingers crossed for optimum results, time will tell

Trying WhyPark, have some alright domain names, so will see what happens just signed up and added few domains. Will see what happens.

@Art: Be careful not to get duplicate content though, that could be punished hard by the big G. I’ve read at DNForum some lost their Adsense accounts due to this.

Thanks MD, i have pretty large choice of domain names (sadly none too premium), but will keep it in mind, in case i get in the zone and go over board on similar type of domain names.

Elliot-
I can’t tell you how much I appreciate your blog and the clarity of thought you bring to the industry. Excellent post.

@Tip – Thanks for sharing your story. It really seems like there is a sweet spot, where the risk/reward ratio is tilted in favor of a more measured approach to development. Like everything else, I’m sure there are exceptions though…

I really like what you have done with the logos of Lowell.com and Burbank.com. They really look good.