When looking through the just released Moniker live auction list, the most important thing I am looking to find are domain names that I can use commercially. When buying at auction, I assume the domain name’s sale price is far greater than any potential PPC revenue I could ever earn, and I also assume that since the sale price is public, it would be difficult to re-sell the name in the short term at a profit. As a result, the only time I personally would buy at an auction is if I plan to develop the domain name.

At this point in my career, I am now looking to buy domain names that I can develop and build into another website/business, so that’s what I am looking for on auction. I haven’t spent much time reviewing the list yet, so I don’t know if I will bid, but I am going to take some time this weekend to look. When you have a chance, check out the TRAFFIC Auction list (via TheDomains.com blog).

Although .net names seem to be selling well these days, I don’t particularly like the .net extension. There are a few reasons for this, but what it boils down to is that I would never develop a .net domain name, and I don’t know why someone else would - unless there are extenuating circumstances (like it would be impossible to acquire the .com and nothing else will suffice). Ultimately, I believe the general public knows .com and they generally assume a website is found at the .com. Additionally, I don’t know why someone would park one for PPC revenue, as they may pay a premium for a top keyword, but type-in traffic to .net names is probably tiny.

Recently, I’ve noticed what seems to be an increase in sales and sales prices of domain names in the .net extension. Intuitively, I don’t believe there is going to be much (if any) direct navigation traffic to these names, so I am a bit perplexed as to why .net domain sales have been increasing. Could it be that the prices are such good bargains compared to the gold standard .com names that there is money on speculation? Sure, I can understand developing a huge category killer .net name like Baseball.net or Fishing.net, but I just don’t see buying a .net to park it, like many of the Year to Date sales leaders are.

I really don’t know why people are buying .net domain names. If the plan is to develop, wouldn’t it be smarter to spend money on the .com domain name? If a person is going to spend thousands of dollars and hundreds of hours of time developing a domain name with the intention of building a business, why would they start out almost handicapped by having the .net? The amount of money it will take to brand the .net over the course of a few years could be more than it would cost to buy the .com instead. If I am going “balls out” building a website, I would have the confidence in my ability to spend (or finance) the .com domain purchase. Maybe that’s just me, but if I am going to build a website or a business, I would be slightly embarrassed to tell my domain colleagues and non-domain friends, “no, not .com - .net.”

Another thing to keep in mind is that once a website is built on the .net, the owner of the .com just hit a jackpot, as the .net website just made his .com domain name all the more valuable, especially if it is without a doubt generic and doesn’t try to monetize it by taking advantage of the .net (Oversee.com would be stupid to have PPC links for domain-related things for example).

Additionally, for generic domain names, if the .com owner builds a similar website on the .com, I would assume he would be the beneficiary of better search engine optimization rankings, and people would just assume they are on the correct website when they navigate to the .com.

For illustrative purposes, I added a Compete.com traffic chart of Oversee.net vs. Oversee.com, with Fabulous.com used to show that an increase in traffic between the .net and .com weren’t simply related to an increase in Internet traffic. Based on the chart, it would appear that the few spikes in traffic seen by Oversee.net resulted in a lift in traffic for Oversee.com.

While .net domain names are certainly less expensive than .com names (and maybe even .org, too), I think there is a very good reason for it, and that’s why I don’t really buy .net domain names. I would be interested in hearing why others think the .net extension has been doing well recently, and I am interested in knowing what others thinking about building on .net. I am open-minded and interested in learning.

If you want to get to the TRAFFIC conference in Orlando in a couple of weeks, head over to DNZoom and either login to your account or sign-up for their services. In honor of their one year anniversary, they are going to raffle off a ticket to TRAFFIC. From DNZoom today:

“As we mark our one year anniversary, we want to give a big “Thanks!” to everyone in the DNZoom community. We have more than 1000 beta users and have struck partnerships with the best companies in the domain industry.

Here is our birthday present to you — A chance to win a free ticket to T.R.A.F.F.I.C. Orlando.”

Check out DNZoom when you have a chance… and a Happy Birthday/Congratulations to Sean Stafford and the folks at DNZoom.

I wanted to share some advice to people who are new to the industry, and perhaps others who make the same beginner mistakes. If you just registered a domain name in the past month or two, and you are looking to sell it for thousands of dollars, it makes you look pretty silly. Unless you registered a domain name for a term that was just coined or some other very hot trend, chances are good that the reason it was unregistered was that others didn’t believe it was worth the registration fee, let alone the thousands of dollars you are trying to get for the name.

One of the keys to my success when I started out was that I priced my new registrations pretty well. I saw people were trying to sell new registrations for several hundred dollars, and I was very happy to sell the names I just registered for $30-100/each. Sure, it took longer to make a large profit than it would have if I sold just one name for several thousand dollars; however, the likelihood of selling a new registration for thousands of dollars is slim to none (and slim just left the building). Yes, I’ve seen it done a couple of times, but I’ve seen more people get chastised for trying to do this than for actually selling them.

If you are trying to break into the business and do well financially, it looks pretty unprofessional to expect a gigantic return on your very short-term investment. Don’t be greedy, and you will be rewarded over time. For some examples of this, search the term “domain” on Ebay and sort from highest prices to lowest, and you will see plenty.

It’s great to wake up and see an article in my local newspaper about an upcoming domain auction. In this morning’s New York Post, there is a small article announcing that Israel.com will be on the auction block at TRAFFIC East in May. From the article,

“Israel is being sold off to the highest bidder.

Jean-Noel Frydman, 46, registered the domain name in 1994 and never imagined at the time it would be worth millions.

“Mainly, I didn’t want anyone to misuse it. That’s why I registered it,” he said, noting he retains final approval on the sale at the May 23 auction.”

Of interest is that Moniker may have given the owner authority to back out of a deal if he doesn’t approve of the new owner. On a strictly personal level, I am glad to see this as it would be terrible for Israel.com to go into the hands of a terrorist or other extremist group. As a domain investor, I think this sets a pretty poor precedent, as a domain owner shouldn’t be able to cancel an auction because he doesn’t approve of the bidder.

If I was a betting person (which I am), I would wager that the domain name will not sell for $5m despite the hype. I think it’s a fantastic opportunity, but organizations who could afford to spend $5m probably can’t justify spending it on a domain name - yet. People will kick themselves for missing out on this opportunity in a few years though.

Domain has now sold.

I’ve mentioned this a few times on my blog in passing, but I want to briefly discuss the Revenue Sharing model of doing business. When I was at AIG, we frequently used this model for various projects where we didn’t necessarily have the expertise or the ability to commit the necessary time to perfect a project. We would go out and seek the best companies in the space and work with them on specific projects, and in return for taking less up front revenue, they would receive a nice revenue share percentage that would have a very long tail. This would yield much greater revenue for the partners in the long run, and those who put skin in the game were rewarded.

While this might not work for everyone or every project, there are certain instances where this model fits perfectly. As mentioned yesterday, I am going to work with a Lowell-based sales representative to sell advertising space on Lowell.com for a commission rather than pay him hourly or hire him full/part time. As a result of earning a percentage for each sale, he will be incentivized to generate more sales and build strong relationships with local businesses. It will also be in his best interest to give me feedback to improve the site. The better the site is, the easier it will be for him to sell advertising space.

One thing to keep in mind is that the partners you work with need to have the same ethics and morals that I (or you) have when conducting business. When a person is working for straight commission, they may tell prospects anything to close a deal. Ultimately, what they promise a potential client will be the responsibility of the business owner. It’s always important to check your references when you are working with someone who will represent your business.

This model might not work for small business owners dealing with large businesses, but you won’t find out until you ask. Some companies can justify taking a risk by losing upfront sale dollars with the promise of a long tail revenue share. If you have a good business plan, it can’t hurt to pitch this model instead of paying for everything up front. The prospect of earning passive revenue for a long time is enticing to many companies, and as long as the idea is backed by a solid business plan, there is usually mostly upside for doing this.

While I haven’t done this yet in the domain or development business, I have experienced this in my former career. This is a great way to keep upfront costs down, and it’s also a great way to mitigate some risks when you are working on a new project. Sure, you lower the potential profit margin down the road, but if the companies you work with have skin in the game, they are more likely to work harder for you, assuming they see you working hard and buy into your vision.

Because Ron Jackson does such a great job reporting domain industry news on DNJournal.com, I think one of the most under-recognized people in the domain industry is Andrew Allemann of DomainNameWire.com. Andrew has been reporting domain industry news since 2005, and he is always the source of great domain information. I’ve met Andrew once in person and had a few phone and email conversations in the past year or so, and I wanted to take a second to give him props. DomainNameWire.com is one of the first domain news outlets I read in the morning, and I appreciate Andrew’s coverage and dedication to the industry.

Of course I didn’t follow the advice I am about to give, but I suppose that is the reason I am giving it! Next time you are thinking about hitting Vegas or Atlantic City (or Mohegan Sun in my case), you might want to consider spending the money on domain registrations rather than blackjack. When you play blackjack, your chances of coming out ahead are pretty slim. When you smartly gamble on a domain name, the prospects can be much greater. Sure, blackjack offers a faster (but shorter lived) thrill, but selling a domain name you just registered for $400 is an even bigger thrill.

Instead of going to the casino and playing blackjack, you are much better off betting on yourself!

I’ve decided to list EnglandVacations.com for sale. The BIN price is just $8,500. The cost of a family traveling to England is in the thousands, so commission on a single vacation booking can be hundreds of dollars. If a small site is built, and a white label travel affiliate is used, EnglandVacations.com can be easily used as a travel portal/engine. Add some unique content about great places to visit in England, and run with it. This name was registered eight years ago.

Here are some recent comparison sales for similar domain names (courtesy of DNSalePrice.com:

CaribbeanVacations.com $130,000
EuropeanVacations.com $85,000
IrelandVacations.com $17,250
AustraliaVacations.com $16,000
AsianVacations.com $15,000* Sold via ElliotsBlog.com
BudgetVacations.com $10,300
CanadaVacations.com $9,600
FijiVacation.com $9,200
BahamaVacations.com $8,188
SwitzerlandVacation.com $7,500
IsraelVacations.com* Sold via ElliotsBlog.com (price not revealed)

I think the most comparable sale on the list is probably IrelandVacations.com, which recently sold for $17,250. The first person to post “sold” in the comment section of my blog will get EnglandVacations.com at a great price.