Monte talks to Andrew Miller and Mike Zapolin of Internet Real Estate Group LLC

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Monte: Hello everyone. This is Monte Kahn. Welcome to Domain Masters. Another great week passed us by. My son is now almost two weeks old. Jackson Reed Cahn. And doing great, and my wife's healing up quite well, so, I want to say hello to my beautiful wife, I think who's listening tonight. And my parents are in town, they're listening to the radio show as well.

I got some great guests on tonight. The folks that are the founders of what was Deal Jam LLC are now called Internet Real Estate Group. This group of entrepreneurs are for some of the largest domain sales in history and names like beer.com, shop.com, diamond.com, telephone.com, computer.com; all of which they have sold to large Fortune 1000 companies for millions and millions of dollars. They have now turned into buyers of domain names more than sellers and we're going to learn a lot about their business, what the Internet Real Estate Group LLC is doing these days. Their also going to be the key note speakers at the upcoming Traffic Event in Del Ray Beach, Florida, in October, and hopefully they can give us some tips and tricks about the valuations of domain name inventories what's making the market really heat up right now and it is heating up quite a bit. So we're going to break for a couple commercials and we're going to be right back with Internet Real Estate LLC.

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Monte: Hello, everyone, welcome back to the show. Again, this is Monte Kahn, your host and welcome to Domain Masters. This week my special guests are Andrew Miller and Mike "Zappy" Zapolin from Internet Real Estate Group LLC. As I mentioned before, this group owns some of the largest and most valuable real estate on the ‘net and they've been responsible for some of the largest sales in the history of the web as well. As I said before, names like beer.com, shop.com, diamond.com, telephone.com, computer.com and many others have all been under their ownership and they currently have such properties as chocolate.com, potcast.com, potcasting.com, relationship.com, shop.com, wireless.com and a bunch of others, so these guys actually know what they're doing and we hope to learn a lot from their business tonight.

Andrew, Mike, are you on board?

Andrew, Mike: Yeah, we are here.

Monte: Great, nice to finally meet you in person on the phone. I know, Andrew, you and I have exchanged a lot of emails and actually spoken to each other in the past when we were talking about some of the domain sales and have been involved in the industry for about the same period of time with each other.

Andrew: Absolutely, and before I even say that, I want to congratulation you on Jackson and say my son Brett's out there listening too, he's four, so I wanted to say hi to him. You opened the door by bringing up your "Jackson" thing, so I thought I would do a quick hello out there, Brett.

Monte: Oh, well, Hi Brett, welcome to Domain Masters. Hopefully, the Jacksons of the world and the Bretts of the world will become domainers just like we are and make a lot of money doing this.

Andrew/Mike: You bet . . . exactly . . .

Monte: Yeah, so, why don't you guys begin by giving me a little bit of background on yourselves. Perhaps, Andrew, you can go first, and then Mike. Just how you got into the business, how you met each other, some of the initial properties that you owned. Just give us a little background about the business and then we can go from there.

Andrew: Well this is Andrew; I'll let Mike lead that off and we'll pick up from there.

Monte: Okay.

Mike: Alright. This is Zappy, how are ya? Okay, basically Andy and I met at Drexell Burnham. We were both on Wall Street and wound up, when Drexell "met its fate" we went over to Bear Stearns and were both vice presidents over there. Had [inaudible] successful careers on Wall Street, but we both felt that we were very entrepreneurial and wanted to, as we were talking to our clients about what companies they should own and what industries they should be in, both of us thought that if we should offer that type of advise it probably would make the most sense if we were talking about our own companies that we really had hands-on experience with.

Monte: Right.

Mike: So, we split off from there and decided to get into the very beginnings of the infomercial business and obviously that's a direct marketing business and the infomercial business was very young at the time, early ‘90's, and Andy and I saw an opportunity where traditional infomercials were sort of hawking products at the time, we came up with a sort of hybrid infomercial with half infomercial, half show. So it was kind of providing good content while at the same time allowing people who were interested to buy product.

Monte: Oh, that's cool. Did you guys sell a lot of different products or did you focus on one segment of products?

Andrew: The goal was both to actually get good ratings as well as sell product and really bring the infomercial to the Fortune 500 to established brands to groups like National Football League Teams, major rock bands, established trademarks and bring them into TV, and if you really fast forward to today, almost everything's an infomercial.

Monte: Yeah, yeah. [inaudible]

Andrew: [inaudible] The movie "Space Jam" was really the first one. The whole movie was designed to be an infomercial. This is really the early stages of that. Mike can kind of tell you a little bit about the specifics, but the goal was basically about getting ratings while selling product.

Monte: Cool. Okay.

Mike: What sort of elevated things there was that the industry was so young that we wound up getting a call from The Today Show and Katie Couric and I actually went on there myself and spoke to Katie about infomercials and at the end of the segment, she was sort of beating up on infomercials and saying that they were kind of "schlocky" and on late at night and all kinds of things like that. So at the end of the segment I figured, you know, never going to be back on this show so I might as well give out our 800 number.

Monte: [laughs]

Mike: Which, by coincidence, happens to be 1-800-777-TODA[Y] . . .

Monte: Oh, really. [laughs]

Mike: Phones went ballistic. We'd get hundreds of phones calls every time the show played in each time zone. So from that, back at the office, everybody's answering the phones and we'd called through all those leads and within there, Diana Ross had been listening to the show and called, and Time Warner and all kinds of very interesting people who had their own product that wanted to market directly to their own fan base. So as we did that, we started to get more and more successful. We started to do more traditional infomercials and as that became more successful, we realized that the hardest part about the infomercial business is that it's very expensive to make the television shows and it's very expensive to buy the airtime.

Monte: Right.

Mike: So Andy and I were thinking, God, the Holy Grail of the infomercial business would really be if we could find a way, our own television network, our own network, where we could play our direct response and have 24 hour ordering. So in 1997, as we started to see the internet taking shape, we thought, oh, my God, this could be our own 24 hour network with 24 hour ordering. It seemed like the natural evolution of the infomercial. So sort of the critical thinking there was, between ourselves, we said rather than trying to come up with, you know, Andy and Mike's Beer Site, or Mike and Andy's Diamond Site, or whatever it was, you know, that's the same amount of process that it would take to do an infomercial. What if we were to own a category domain name like Beer.com? It would have natural traffic; as the Internet took shape it would get more traffic as other people started to advertise the dot com, it would get even more credibility and more traffic. And ultimately, if it was a big enough category for advertisers and marketers, if we spent some time developing it, that we'd be in a situation to either sell a lot of advertising or sell the property itself.

Monte: Right. Now, when you guys acquired Beer.com, now did you buy it in the aftermarket or were you the ones who registered it from scratch?

Mike: That was an aftermarket. Pretty much, Andy and I, not being the "techies," were never the guys who acquired these properties by typing them in to Network Solutions. So, what happened was, I basically made a list, I call it my Super Bowl Test, which is, if we were going to go into an industry category and own it, it had to be a big enough category where somebody would market themselves as the Super Bowl in order to make it worth our taking the time to build. So when you think of the Super Bowl, you think of beer and computers and diamonds and insurance and cars and things like that. We made our list and, uhm, . . .

Andrew: And just to add to that, that list and that criteria has obviously evolved significantly from 1997 to today.

Monte: Oh, yeah. Certainly, since everything's happened on the web, both the boom and the bust, and now we're seeing the insurgence of the online advertising and how valuable domains really are.

Andrew: Correct. And which ones we pursue and how we do that, the criteria and we have a fairly significant formula for criteria and that usually determines whether we make a move on one or not. It's a little different from what it was back then. Back then it was still a little bit more wild, wild West; although its still somewhat wild, wild West, it was a little more wild, wild West back then, like everything, obviously.

Monte: Right, right. So just give us an idea . . .

Mike: Kind of, you know, just to tell you how we got there, I mean, you know, I typed in "beer.com" into the browser and up came, you know, kind of an amateurish site, something that someone had kind of been doing as a hobby, you know, pictures of the guy that owned it and his friends throwing up and all kinds of home-grown content. So, we knew somebody who's in the liquor promotions business and approached the domain owner and said to him, hey, how'd you like to sell us beer.com and you know, we'll go out and develop this, we'll give you some cash. The person who took it was a young guy, smart enough to realize that the internet was going to develop, so he didn't want to sell the whole thing and at the same time, we thought the value would change enough where we wanted to have him involved, so there was no problem later on down the line. So, basically, we gave him $80,000 for 80% of Beer.com back in '98. People were telling us we were out of our minds paying that much money for nothingness . . .

Monte: [laughs]

Mike: . . . so we acquired the site, he kept 20% and was very happy – he went off the Breckenridge to go skiing - and what happened was, Andy and I, sort of our modus operandii, is to let the press know about what we're doing. So rather than having to go out and approach 20 beer companies, we put out some press about what we were doing at Beer.com, you know, the fact that you could, you know, rate your favorite beer, you could get brewing tips, you could get a free @beer.com email, and . . .

Monte: . . . hangover remedies [laughs] . . .

Mike: Yeah, exactly . . . and so as we put the press out we got calls from all the beer companies and had conversations with a bunch of them, wound up talking, got a call from McKinsey up in Toronto, who said, We represent Interbrew, a $5 billion beer company. Why don't you come up here and we can have a conversation about how we can participate as advertisers or as partners. So, literally, probably 90 days after buying it for $80,000, Interbrew bought it for $7 million and . . .

Monte: They bought 100% of it?

Mike: They bought 100%. Their feeling was, you know, we were interested in developing it with them and along side them and had some pretty interesting plans for development but the reality was they said to us, At the end of the day, we might put a lot of money into this and, in the beer business, if you can get 1% of the population to convert over to your beer, likes like a billion dollar swing.

Monte: Wow, that's a great story. I mean, that's one of those stories that the domainers from the past will definitely get a kick out of. And of course, the new domainers for sure.

Andrew: And the NDA on that one is gone now, so we can talk about it.

Monte: Yeah, yeah. I mean, when we sold autos.com for $2.2 million, people thought it was nuts, too. [laughs]

Mike: Yep. Obviously, Andy and I, our next step was, you know, the day after we signed the deal and took our check, was to go out and go after all the other categories that we'd had on our list.

Monte: Now, at that time, did you just have Beer.com and that was your litmus test or did you acquire a couple others at the same time and . . .?

Andrew: That was the litmus test.

Mike: That was the litmus test.

Monte: That was the litmus test. So you got a top brand, you spent the money, you turned around and made a shitload of money back and then it was time to go out and start acquiring the properties.

Mike: Exactly, . . .

Andrew: I wouldn't say that. At that point, we were still kind of target shooting one bullet versus going crazy.

Mike: The idea was to figure out next what category was gonna be changed by the internet, so Andy and my theory was that diamond.com was, at the time, again, when we acquired diamond.com people were saying well, nobody's ever going to buy a diamond over the internet, that's ridiculous.

Monte: [laughs]

Mike: But we thought to ourselves, there's so much process from mining the diamond, to cutting it, and then, you know, refining it and retailers and wholesalers and everything in between that the internet that if the internet condensed that down, you know, that process, that, you know, that this would be an incredible tool and diamonds would be sold on the internet.

Monte: Right. And they certainly are today.

Mike: Yes. So in that, you know, Andy and I put out our press and wound up getting a call from all the diamond companies at the time. Again, this was 1999, so we were heading into the real bubble. We got calls from Miadora, Mondera, Ashford, Odema, literally every company . . .

Andrew: DeBeers . . .

Mike: . . . wound up talking to DeBeers; and there again, you know, I think this is important point is at the time DeBeers said to us, we don't think we want to disrupt our direct channel, we probably won't pay as much money . . .

Andrew: They actually offered $3.5 million under the premise that they won't know what they'd ever use it for, ever go direct, so they can't risk paying more, and we turned that down, obviously, but there was, right . . .

Monte: Now, you ended up selling that domain name for $6 million, right?

Mike: Yeah, we took cash and stock for that because the company was actually close to a Bear Stearns IPO – Andy and I had both been at Bear Stearns – and at the time, it was literally the bubble. I mean, a lot of companies offered us more money than we took, but what we did was, we ended up going through and evaluating who they were, what their plan was. And what happened was, as we evaluated them, we sort of did an interview process with all of them, and some of them looked like venture capital-backed opportunities, some looked a little bit like smoke and mirrors but the Odema situation - who we wound up selling it to – were backed by one of DeBeers largest site holders. The management has been running the kiosks at Sam's Clubs, the jewelry counters at Sam's Clubs and successfully taken that public . . .

Andrew: And Service Merchandise, as well.

Mike: Yeah, and so Andy and I, you know, evaluated that and said, hey, you know, if there's a bubble or if it takes a long time, or if we're, you know, reading the timeframe wrong, we still think these guys are gonna be in business years from now and some of these other guys are not who are offering us more cash and more stock.

Monte: Right, right. And so Diamond.com right now, I see, looks like a pretty cool site. I'm just logging in and looking at it.

Andrew: And I happen to know these dates cold because we signed the deal on the night of my rehearsal dinner at my own wedding [laughs] April 7th of 2000, and they were 16 days-ish or so from a supposed IPO. Somewhere between 7 and 16 days is when the bubble really blew.

Monte: Right.

Andrew: And, everybody pulled their S-1 filings and their IPOs and these guys hunkered down and raised some more money and had good backers and stayed in the game and they went public at 9 bucks a share through CIBC Oppenheimer in February of this year and, unfortunately, the stock's at two bucks but I think they'll be back. They're a smart management team with a great track record; went public a little too early but didn't want to get out.

Monte: Right. Well, heck, the fact that they're still around after being . . .

Andrew: Right. They're clearly the number two player . . .

Monte: . . . [inaudible] is a huge success right there on its own.

Mike: Yeah, no doubt.

Monte: Yeah, definitely.

Mike: Right. That's sort of been our modus operandii; you know, the bubble, obviously, people were just absolutely throwing money and Andy and I were looking for categories and that's were Computer.com came into the mix, and Andy and I worked to bring investors together to help fund that and the idea was that we had seen Jeff Taylor of Monster.com, the founder, launch his Monster brand at Super Bowl the year before very successfully and had a billion dollar market cap at that point.

Monte: Right.

Mike: So we said to ourselves, well, Computer.com, which came with the 1-800-COMPUTER, um, a brilliant guy in Silicon Valley had the foresight to, in 19. . . well, actually in the ‘80's to take 1-800-COMPUTER when they released phone number and then when he saw the dot com domains come out in '94 or so, he registered Computer.com. So Andy and I thought, whoa, you know, this is an opportunity to put a good management team in there and have an asset that are, you know, the brands are literally a call to action to buy computers and computers are what you're looking at the internet on so maybe we can pull a Jeff Taylor and do a Super Bowl ad and cause that same type of instant brand to happen.

Monte: And you had the funding to do a Super Bowl ad because you sold, well, you sold Beer.com, Shop.com, Diamond.com all before that - and Telephone.com - all before that deal. Correct?

Mike: Not all before that, no. You know, Diamond.com, Beer.com, Computer.com was in that same window . . .

Andrew: [inaudible]

Monte: But you had the funds to hunker down and spend the money for a Super Bowl ad, thinking that you were going to get that return?

Mike: Exactly. So we figured to ourselves, you know, we convinced Jeff Taylor to come aboard and he came on as an investor and another partner who became the CEO, a guy named Mike Ford, and Jeff chaperoned the process to be able to not crash the site when you have that many visitors coming to you know, put up a good site that's going to be attractive to have a good Super Bowl ad and on and on so in that bubble time we wound up getting, again, very lucky we had, we were the last company to buy a spot in that Super Bowl and ABC told us that Super Bowl is not, you know, it's not great to be the last advertiser in there because usually it's a lopsided game and people tune out but we got really lucky, it was the Rams-Titans game that came down to the last play of the game and according to ABC at the time it was the highest rated commercial of all time, 150+ million people watched the commercial and we did a decent time of getting press before and leading up to and after so what happened was, basically, when the bubble burst, and I think again this is something that, as a consideration to anybody who's listening who's in the domain business of direct marketing. Most companies during the bubble had no traffic and no visitors and no revenues to really speak of. Because we did the Super Bowl, we had a million-plus visitors come in within, you know, 24 hours or so of the Super Bowl and we were able to look at where they went. And all of the retailers, we were able to show them that when somebody comes into Computer.com, because of the credibility of the name, because of the typability of the name, you know, as natural type-in traffic in many cases, it has that credibility, they're coming to Computer.com ahead of making a computer brand choice, like Dell.com or Compact.com. So when they came in, they got educated with our layer of content when they went into our e-commerce store, they would buy 10% of the time.

Monte: Right, right.

Mike: When Siberian Outpost, who's our e-retailer, got traffic from CNET or AOL, they would close less than 2% of the time. And I think that's the real message of today, and I think that's real power of the domain name, is not only do you have credibility, not only to you have people coming to you prior to making a brand decision, but if you can, underneath that, put a good user experience, put a layer of usable information for them to make decisions, you're causing them, in this moment of desiring something to then pull the trigger on buying something.

Monte: Right. And that's what it's all about when you're either acquiring these properties, when you're either acquiring or selling these properties, is to make sure that you're converting the visitor into income, so that you're having an ROI.

Andrew: [inaudible]

Monte: I mean if you spent $6 million or $10 million when you're in that kind of position, you're going to want to see some kind of return at some point, unless you just have so much money you don't know what to do with it.

Andrew: Absolutely. Yeah, jumping ahead we obviously had a few other deals with Telephone.com and Creditcards.com and . . .

Monte: Yeah, Creditcard.com was, I think, the highest sale reported so far for $2.75 million, is that correct?

Andrew: Yeah, yeah. You probably read that in Domain Name Journal; I take issue with the backwards way that people look at the domain name world and the reported sales are not even . . . well, I could say it wasn't even in our top 3 sales last year.

Monte: Right, now lets talk a little about that, because we're also in the same situation as high-end domain brokers, Moniker is; that we can't report like 10% of the transactions that actually occur here, but the real picture here is a lot greater than what people see in DN Journal, after Nick Seado, and so on.

Andrew: Absolutely.

Monte: Give us a little bit of an idea, because you guys are in the thick of it, for sure, because of the properties that you're both holding and selling but give us some idea of what you estimate this market to be right now.

Andrew: There's two things going on. There's two kinds of generic domain name situations, you know, that's called validators. There's the large branded Fortune 500 companies, the Fortune 1000, etc., that have been rapidly exploiting and taking down their category names very quickly and very quietly and there's hundreds of examples of those. You know, one of the examples I like to give is Baby.com, being a prime time ad by Johnson & Johnson as their entire baby and product gateway, they've been advertising it on "The Apprentice" and on "The Batchelor" in prime time.

Monte: Right.

Andrew: But there are . . . whether it's a defensive play like Barnes & Noble owning Books.com or Monster owning Jobs.com, or its an offensive play like Baby.com and the list goes really on and on and on, I could pull it up here and rifle it off but we could spend the whole, well, there's probably 200 I could rifle off; and then there's the internet only companies that have decided to build a, well, we call it "develop on generic properties." And just in the last, 90 days, lets say, 120 days, something like that, you've had AOL buy Advertising.com for $435 million cash, you've had eBay buy Rent.com and Shopping.com for a combined $1.4 billion.

Monte: Yeah. Well, that comes with other things besides domain, but the point is . . .

Andrew: Point is these are internet only companies that either built on from origination or built at something like a Deal Time after 5 years, pre-IPO shifting to Shopping.com and a year later they have the hottest IPO and are bought out by eBay for $625 million. And the question that I always ask, and I know some of these CEOs pretty well, is of that $625 million of that successful IPO, how much would you place on a shift to the generic, or at Hotels.com and Interactive Corps. case, another example, and I can tell you off the record, conversationally, I can't put a dollar value on it but clearly, I've been told 9 figures by one of these CEOs.

Monte: Right. I mean, the bottom line is if someone's paying $500 million or $600 million for one of these domains for these brands, they would never turn around and sell it for that same amount. I guess it's the case of eBay buying Rent.com and like you said the Shopping.com scenario. I mean, those are long-term, hundred-of-years-down-the-road brands that will always be here.

Andrew: And there's not, in our opinion, there are dot coms on the heels of being a fairly high profile winner; Diamond.com is public. These are companies, you know, some of the ones I heard you mention – eWine.com and Match.com, obviously, which is a generic, and Shop.com and soon to be Cars.com, both INC Magazine's fastest growing companies; Monster bought Military.com. You can really go down the list. Barry Dillard owns realestate.com and Hotels.com and one more that I . . . Gifts.com, which is an interesting one. Gifts.com Barry Dillard bought a couple months ago and I know that because they outbid us at the 11th hour, and this is Interactive Corp.'s first, instead of acquiring the company with paper for hundreds of millions of dollars, this is was a grassroots start-up and the first thing they did when they decided they wanted to go into the online gift industry was to go out and buy that name. And they bought it from Reader's Digest, so they bought it from a large company.

Monte: Right, right, right.

Andrew: So, the point is, whether its defensive or offensive, yes, Shopping.com dropped off at 10X revenue and did $100-something million, but the shift when they went public and all these companies, its starting to be less of a coincidence when you see company after company built on or shifted to a generic domain name, a prime generic domain name, a category name platform having major, major, major success.

Monte: Yeah. And a lot of it are attributed to the brand that they're creating off of a generic domain name.

Andrew: Correct.

Monte: And you did mention that books.com played . . .

Andrew: [inaudible] how many internet only brands have been made.

Monte: Right, right.

Andrew . . . that are not generic, I would be willing to say that you might be able to find already, in this short period of time, the generic number passing that number.

Monte: Right.

Andrew: There's only a handful of Googles and Yahoos and Monsters and Amazons and eBays.

Monte: Right, right. That's a very good point. So the market is huge, it's got huge legs, it's got a lot of legs, actually, in my opinion. Even in the bust when the dot com companies went down, ironically, the last standing assets of many of these companies (and we were involved in a lot of the evaluations and sales of those brands when the market was crashing) were their domain names. So, for instance, eToys, when they went out of business as a $7 billion company, we appraised the property and helped get it sold for $3.4 million. It was the most valuable asset that they had left. [inaudible]

Andrew: Yeah, there's a lot of those examples, Monte, it's a good point. Jeff Taylor, who is on our board and is an investor in every one of Internet Real Estate's deals; bought Jobs.com out of bankruptcy for just under $1 million a year and a half ago from Monster. The Food Network on television bought Food.com for $1.1 million out of bankruptcy, oh, recently, and they're going to be re-launching the initiative for their new website. So, you know, there are a lot of these, even out of bankruptcy, as you said, probably the largest asset that got left standing was the domain name and [inaudible].com and eToys is a great example but there are obviously others.

Monte: Yeah, right. We were selected to liquidate the domain assets, as an example, for the Excited Home Properties; I think you guys know that already but, um, so a couple weeks ago actually at the end of August we sold ShoppingCart.com as the first property to kick off that auction. But they own Stuff.com and Home.net and some other big properties and so it is the way that the liquidating trust is going to pay off their creditors is to sell off some of these domain names from a company that was a gem of the Internet back in '99 and 2000, touching, you know, $3.5 million homes and then got caught up in the crash and went down the tubes.

Andrew: Well, let's hope so.

Monte: [laughs] Yeah.

Mike: The other thing that I think is really interesting about the generic domain names its sort of the beauty is in the eye of the beholder. And as a seller, or as a buyer, I think you want to, you know, you have to understand that mentality because if you try to evaluate something and you say, okay, and it says, well, six letters and it has this much traffic and hence I'm going to price it like this, what Andy and I have been doing instead has been to figure out who in the space its relevant to and to make sure we get in front of them and then make our educational presentation about the market and let them decide is this a defensive play they have to make, is there some business that they're going into or in the next couple of years that this fits with and without necessarily putting a price on it, you might find out, as in the case of InterBrew if I try to put a price on it and uh-oh, I'll be a genius and try to double my money here, I never would have got the $7 million.

Monte: Yeah.

Mike: So it's kind of listening to what . . . once I realized that 1% of the shift in the beer market was a billion dollars, I said to myself, well, these guys can spend whatever they want to or whatever they need to.

Monte: Right. Exactly.

Andrew: And Mike's point is well taken. We've spent hundreds and hundreds and hundreds of hours and thousands of dollars, and continue to on a daily basis, educating what I believe are the slowest adapters in many cases; as a whole there are obviously individual situations where that's not the case. The Fortune 1000, the emerging companies, the pre-IPO companies, on the power of the generic domain name and that's getting easier as the Shopping.coms and the Rent.coms happen and the big Baby.coms happen – but – just to use one analogy, we have an exclusive brokerage deal on Jeans.com and having been the point person on it, I'm telling you, we are going to buy the name, okay, that's what's going to happen here, Internet Real Estate Group, because, what's happening kind of like with Diamonds.com way back when, the two largest jeans companies in the world, BF Corp. (which is the largest public stock exchange company, owns over 50 brands of jeans) and Levis, (struggling but Number Two) and now you have hundreds of sub-brands and fashion designer brands, as we know, it's a $14 billion market. Apparently, BF and Levis never sold a pair of jeans direct, to this day, to a consumer and don't even have stocks or plans of how they would ever do that. Scared of cutting off the retailers, scared of going direct, scared of creating a private label, so its been a major education process of , we'd love to buy Jeans.com but (in the case of BF Corp.) what do we do with it? We have no idea, we have no strategy, we can't pay X millions of dollars if we don't have a strategy. So there's a great example of an opportunity to buy a name, develop it and there's a $14 billion market. Apparel ‘s a big seller on the Internet, jeans are reordered so we should be able to sell a decent amount of jeans either through LinkUp or Shopping Cart or even through our own private label with a manufacturer who wants to go direct to we know. And, you know, in a year, two, three years, like Diamonds, someone's going to go direct with jeans and it's going to be something more than a just branding concept for BF. And when that day comes, the properties going to be worth exorbitant amounts more than it is today and hopefully we'll have built it up and have some great revenue and some great branding on it and traffic and everything else. But that's a great analogy because I've been living it.

Monte: Yeah, well, talking about jeans also, people are buying jeans after they're worn already. [laughs]

Andrew: Absolutely.

Monte: There's a resale site of jeans that have been worn several times by several different people that would sell.

Mike: Well, to Andy's point and to anyone who's listening to this show or at T.R.A.F.F.I.C. 2005 we just keep reiterating our point which is, this is still, I mean, a lot of people think, God, these domains are expensive, we're in the 8th or 9th inning of the game, but I think, in our estimation, we're in the second inning of the game and that misunderstanding by people is still the opportunity to buy domain. About 18 months ago, I helped a group of partners in Los Angeles to buy Music.com, and we're developing that and having quite a bit of success and you know, have the Sonys of the world and people like that, you know, knocking on the door at this point, and the funny part about it was, you know, where were they 18 months ago? How could they possibly have let this domain into some none. . . you know, bizarre hands, basically?

Monte: Right.

Mike: It just absolutely means we're in the second inning and not the . . .

Andrew: [inaudible]

Monte: You make a very, very good point, because we represent the domain name CD.com, you know, and it has multiple meanings also, but these guys are letting this domain name, basically . . . the music industry, even though, you know, CDs aren't as popular today as the Mp3 stuff, everybody still relates to their music on CDs and this domain name is extremely valuable and the music companies, they just can't figure it out. Even the companies that CD represents other things with, of course, the banks and the certificates of deposit but even companies like Send It, where CD is there stock symbol, they just, they just can't figure it out. And you're right, we are in the 2nd inning. You're probably in a longer inning game than 9 innings.

Andrew: [inaudible] . . . so offline you can talk to me about that one [laughs]

Monte: [laughs] Okay.

Andrew: I have a pretty sharp relationship there and not really meant for the interview [inaudible]

Monte: But I'm just giving . . . what you're saying is absolutely true, we are only in the 2nd inning of a much longer game than 9 innings, I think.

Andrew: [inaudible]

Monte: And these top brands and still the brick and mortar world is just now starting to figure out, hey, you know, what are we going to do, you know, where are we going to be in 5 years, is everybody going to be doing e-commerce on the web or not, and of course they are.

Andrew: Yeah. Let's say, the analogy would be when, whatever you want to use, Rodeo Drive or Madison Avenue or Nantucket Island or [inaudible], when these high-end real estate places, when Madison Avenue first came into being developed and, I don't know, I'm not a history major so I can't tell you exactly when that was but I'm sure people thought that 10 years after that, that whatever people were paying for real estate on Madison Avenue, they were crazy. And Madison Avenue was probably an incredible investment 10 years ago.

Monte: Right, right.

Andrew: And so that was probably 100 years after it was developed, so we are, sure, would have preferred to be the guys for free or for $35, but if we were we probably would have not held them to even close to their value and had let them go by now so its definitely a great time to be in the buying of, at least on our end, kind of a little different from the aggregators, the primest of prime generic domain properties and InternetRealEstateGroup.com and Internet Real Estate Group is building a portfolio of the primest properties and that's what we're out to do. We're the Four Seasons of the one and only resorts. We feel that we can build as much traffic and revenue with 25 or 30 primes names as someone's able to do with hundreds or thousands less-prime names.

Monte: Right. So let me get your opinion on some of the portfolio purchases that are going on. Obviously, you're aware of the MarchX purchase of the Ultimate Search Inventory and they purchased that inventory of some 80-some odd thousand domain names. In fact, they were all here at Moniker, for $164 million and there's other venture capital groups such as Highland Capital buying a nice chunk of domain names from Buy Domains in a 60-70% acquisition. Give me your guys opinion of the fishing net approach that people are using by acquiring large portfolios at one time. Obviously, the goal is still return on investment, they're making money. You know, if they're paying 7 – 10 times, they feel with their negotiating power and their contract negotiating strength that they can quickly reduce that ROI in time from 7 – 10 years to you know, 3 – 5 because of where they are in the marketplace. What's your opinions of those types of strategies and for both the listening audience that owns those portfolios and those that are looking to acquire them?

Andrew: I think from our seat, those are our friends, and a lot them, and we have a great relationships with them and there's a tremendous synergy because anyone who acquires a mass portfolio is going to sift out one or two prime generics that they realize (at least the people we are talking to) are much better off developed and kind of removed from that massive portfolio rather than putting up a Overture-type CPC or Google CPC type directory.

Monte: Right.

Andrew: so, we're allying ourselves pretty closely one or two of those bigger players and clearly that makes sense for us as developers of the prime names. But I think it's interesting. Obviously, it's a traffic game and I think the risks – there's risk in it; I think we've talked to some of our friends that are doing it about them – and I think there's a risk at two levels. I think there's a risk that the consumer starts to get sick of these directory sites; Catchers Arm, let's call it.

Monte: Do you really think that's realistic that that's short term now because what is there, 2 million people getting on the web every week and there's a lot of novice, you know, people going to web sites and direct navigation, the direct type-in domain name, similar to the generic name approach, even in multiple words now, is making up a huge part of the market.

Andrew: Absolutely. And I think the other risk, well, I think that's more a longer term attrition. I think the other risk is (and we talked about this with some groups) is you never, and as Drexell Burnham survivors, Mike and I, we can say this from a different light, ‘cause to one day go from the biggest investment bank in the world to non-existent or Arthur Anderson, Google and Overture are the dime, especially Google if they decided at some point to shift the way they pay for traffic or how they monetize traffic or how they dealt with it so they realize that they were overpaying for a bunch of bad traffic or something like that, and they changed the model overnight, which is entirely possible, and you know, the other guys would follow because that's how the world works. Then CBC directly may be come, let's just say, a cost per acquisition directory or a cost per acquisition model instead of a cost per click model at some level on the payout side and then it's a pretty big directional shift. So we think there's some risks to it but obviously,

Mike: Andy, Andy, let me point out another risk. I think this, I think about some of these large domain purchases and I think they're, again, we're in the second inning so they're stealing these domain names and their ROI is excellent. But I think they're really, their sweet spot is in sort of this, you know, lower level domain name space, where, you know, maybe it's $1,000 to $2,500 name that they bought, let's say in a catalog of $100 domain names. So it's great, great return for them but I think what can happen is you're focused on volume and you're selling assets that you probably should be sitting on as opposed to selling.

Monte: Right. It's definitely a risk to reward play; you're spreading your risk across multiple domain names so that you could liquidate to get your money back and then at the same time, like you're saying, you hold onto the gems, or you put the gems in professional hands that had experience in selling and monetizing them in other ways. You know, they have such a big portfolio that they need to sell or they have shareholders, you know, public companies, that they need to sell a certain amount and because of that, they're fueling their revenues selling certain names that, you know, shouldn't be sold. Or maybe not putting quite as much thought into what a domain really should go for. They kind of have a formula and that formula can be wrong. And I'll give you a couple of examples, because I have bought from a couple of players like Buy Domains and people like that where I bought domains for maybe $1,000, $2,000 and I think the name's worth, you know, I've already sort of found people who would pay $50,000 for the name. So there's these hidden gems in there, not just by taking it because it has traffic, but it doesn't necessarily but if you could buy it and then market it out to the people who might want it or might need it or who are starting to spend money in the space, you can take some of their names that they're selling for a few thousand dollars and turn ‘em around for, you know, six figure.

Monte: Yeah, yeah, definitely, I agree with that.

Andrew: The last point along those lines is, by putting up a directory, CPC-type, you're pretty much gonna capture your natural type-in traffic, maybe someone could make an argument you're can do some search engine optimization although I'm not so sure I'd buy it. So you're playing a pure, natural type-in game and obviously in a million-plus name quantity, but on any given name, that's where you're going to make your money. There's no doubles, triples, home-run potentials. There's no Shopping.coms lurking out there or Rent.coms or even CreditCards.com and without going to the next step of actually developing the property, really developing it as a property and a business. Now, we may develop something here that, and I use the analogy that we'll build a hotel and someone else will buy it and maybe it's a Fortune 100 company that will buy it and they want to build a set of condos, so they'll tear our hotel down but we at least validated the value of the real estate and we had a hotel that produced income; maybe that's not what the buyer wants to do with it but we at least did build something and it doesn't mean someone can't tear it down or restructure it or redo it. So, it's limiting in some respects, it's just very different. I can speak from us it's a very different game than we play; it's synergistic in some respects. [inaudible]

Monte: You know what [inaudible]

Andrew: There's a window of time here where there's a handful of companies trying to play in it large and trying to capitalize on it. and I just wouldn't want to be caught with the pants down two years out with 450,000 mediocre or 1,000,000 mediocre names and a model shift so dramatic that the directory site doesn't pay anymore. Something along that line.

Monte: Right.

Andrew: Whereas, Mike likes to say the Music.coms and the Computer.coms and the CreditCards.coms and the Chocolate.coms, we have multiple lives, if we screw up, if we built a house and should have built a condo, we can build a condo. And if we screwed that up and needed to build a hotel, then we can tear it down and build a hotel ‘til we get it right without really devaluing the value of the assets.

Monte: Right. One may say, though, that the other strategy works that way as well. If you have, and I'm pro-[inaudible] strategy, so my comment is just purely for the people that listening, just to think about two different aspects about this.

Andrew: And we are, too, by the way.

Monte: Right. And one may say, hey, that 100,000 domain name purchase, as long as there's couple years in the game, they make their money back and they got their money back and then they could tear down and rebuild their strategy also on a couple of select names and they're still winners.

Andrew: Yep.

Monte: So, as long as that return is there and it's bringing a return on their investment that they expected before the big shift on what happens on the Internet, if that ever comes or you know, there probably will be changes and shifts, they still win because they now have all that asset. They could liquidate what they don't want to keep anymore, build upon the bright properties that they own and then make their big home runs that way.

Mike: Absolutely. And for everybody, you know, if you're going to spend money on advertising, you know, having a two-word generic, you know, that's in the public mindshare, its just a phenomenal thing to get a better return on your advertising because somebody can remember your-dot-com address.

Monte: Right.

Mike: I don't want to knock that at all. I think these companies, you know, everybody should be buying up these domains like we're in the second inning and I think a lot of people are sitting there and saying, well, should I pay this because I think we're in the eighth or ninth inning and it just, that's what I think we want to open people's eyes up to and one other thing I'm going to add because I haven't heard it yet is that in actually in practicing what we preach, the name of our website is internetrealestate.com.

Monte: Right. So you're taking the virtual property and applied the real estate to it.

Andrew: We love the domain name, we paid real money for it . . .

Monte: Yeah, it's real property, it is real estate and

Andrew: [inaudible] . . . that's in the process of being revamped, obviously, done well

Monte: Right, and . . .

Andrew: We're embracing it at every level. I think the only other point for other people listening and Mike's got a point about the second inning, and even we've even been guilty of this at times, when you really think about it is in a portfolio of 30 prime names, there is going to be a Rent.com or Shopping.com. One of them has the ability to be a $600 million business and you don't' have to be the guys necessarily to get it there – you can get it to two million and then bring in a management team, which is something we've done in the past. So, with PodCast.com, this caught on real quickly. We got our hands around the names kind of overnight. Got lucky.

Monte: Yeah, that is lucky.

Andrew: Picked ‘em up, pod casting, pod casting on the cover of Time Magazine; it's kind of the hot buzz word. It's the new bubble word, right? And whether it's as big as its being made out to be, the VCs are flying into it, We've had some pretty serious offers from some name brand companies. And this one we said let's make sure we don't buy the stock at $2 and sell it at $4 when it can go to $100. Well, we don't want to be greedy. We brought in one of our board members who's successfully sold a couple of companies and was in retirement in his 40's fulltime to run this thing and he's deep into it and you know, it may be the one that takes off and we're pretty confident that in a portfolio of 30 we'll have a couple that turn into significant stand alone businesses. And how deep we [inaudible] Shop.com is another example. We own 2 ½ % of the company; it's by Amazon and Bill Gates and Oak Investment Partners who put $25 million in February. So, there's a great example there.

Monte: Yeah, that were some of the questions that were popping up in the chat room. Obviously, you've sold some properties outright. It seems now you're involved in the development and you're keeping pieces. So just give us some examples of what those are again.

Andrew: Of current properties?

Monte: That you're keeping pieces in now. Some of the questions in the chat room are, hey, are they running any of their properties now? Like, you got involved in Music.com and some of the others.

Andrew: All involved in the last 12 months, you know, we sold a lot in 2004 and the beginning of '05 that we had been developing for a few years. We sold Credit Cards, we sold Shop.

Monte: Now, why did you sell Credit Cards?

Andrew: What was that?

Monte: Why did you sell Credit Cards?

Andrew: To be totally blunt, we reached a [inaudible] for three years . . .

Mike: We sold it [inaudible] . . . we probably sold it too early . . .

Andrew: We definitely sold it too early, but we reaped a lot of cash flow for 3 years but we did a lot of things internally to get that cash flow up to a new level . . .

Monte: Right.

Andrew: . . . and it just didn't happen, and we're an Internet Real Estate Group, we're not a fulltime CreditCards.com so that and what's going on in the Government in the sub-prime space – leaning down, shutting down Primvidea and shutting down NexCard and shutting down a bunch of these major name companies and the Internet was all about sub-prime leads; we decided it was a good time to sell whereas bringing in a management team where actually venture capital would go that route in that specific space. . .

Monte: Right.

Andrew: . . . because there's gonna be a 3 – 5 year shakeout while the government's in there and they're trying to revamp the amount of bad debt people have in this country and we just didn't want to ride it out but I would still say, well, we got a 5X return on our investment, we still sold it too early. There's no question, but, it was a strategic decision at the time to focus on other things. We're currently own Chocolate and Chocolates.com, all under a year. We own Relationship.com and a couple of sub-sites under that are doing very well that are specific products that we developed. We own Shops.com, or a piece of that. PodCast and PodCasting . . .

Mike: . . . is being developed. All of these are, our general modus operandii are to develop these properties to a point where we sort of get to the top of where we think we can take it revenue-wise or brand-wise, with a sort of recognition that ultimately, you know, there's probably somebody out there because of their size and because of their underlining business model that can monetize these properties even better than us. So when we get it to that level, let's say that, you know, with Diamond.com or CreditCards.com or Beer.com . . .

Andrew: Shops.com.

Mike: . . .at some point – Shops.com – you build it too a certain point, and then if you're Visa or somebody like that, you have the economies of scale to take what we've done and do something at a much bigger level.

Monte: You know, it's a simulation of, you know, if you're a start up company and you bring it to a certain point and its sometimes time to turn the keys over to another management team that can take it to the next level, like going public.

Andrew: Whether that management's team is, in Shop.com's case, AVC dot Group, it had a platform that was doing north of $10 million a year and needed to go to the next level or it's a Diamond.com, or its an internal management team like we've done with PodCast that's actually we're gonna keep a larger piece of it and bring around our own management team that's going to run it under our direction. So there's all kinds of routes once you hit that point.

Monte: Right, right. But it those cases, you want to make sure, you know, when you turn over those keys to a bigger management team and you go public, you always hold on to some interest in the company so that you always win and don't kick yourself or sell yourself short. I guess the crack card question is, well, I guess a good question to ask is being asked on the forum or on the chat: Would you buy CreditCards.com back today for what you sold it for?

Mike: Well, one thing that Andy left was there were a couple partners within there who have, like we all have, have their own cash flow needs, have their own agendas and also, I think in that case, I think the percentage of management in the management group that was doing our search engine optimization and our affiliate stuff, they were deep enough with that, that even though I still would probably buy the domain back at the same price, or its probably even increased in value since then, just the time value, for us personally just to be able to take some of those resources that we had and the people and the expertise that we got because in that case, one of things that we haven't talked about is, on the search engine optimization side with Credit Cards we personally held the number one ranking for the words "credit cards" on search on Yahoo for over a year.

Monte: Wow.

Mike: You know, I can't even tell you how much we enjoyed going to the mail box each day to figure out how much we made on it. But, you know, developing that search engine optimization expertise was something that we were then able to take those resources and apply across a bunch of sites, where we were in that case, at the time, you know, confining it to one area.

Monte: Hey, I'm not knocking ya at all for liquidating . . .

Mike: No, no . . .

Andrew: Monte, my answer is we are very secretarian now, and I don't want to call it scientific but trying to be more and more so of how we buy something and what we buy.

Monte: Right. And, and, and . . . were you guys at T.R.A.F.F.I C West in Las Vegas?

Mike: No, I was not; and I don't think, Andy, you were either.

Andrew: No.

Monte: Well, Mark Oslosky from Eyre, which is a similar organization that's buying . . .

Andrew: I know them well.

Monte: . . . he was the keynote speaker there and he made it totally clear – and I totally agree – you should always take some money off the table. You shouldn't hold onto portfolios long-term for the same reasons why you just explained about holding large portfolios. Something could happen in the market and then everything changes.

Andrew: It's not only that. I think, I mean, we have criteria as far as buying and part of that is buying smart and buying low, and whether we sold, I think we sold Credit Cards low in the spectrum of where its already been taken by its new owner and where it can go.

Monte: Yeah, but you still sold it for $2, you still got $2.75 million for a domain name.

Andrew: We sold it low but that doesn't mean we'd be buying it high at this point and I think that we'll be releasing in the coming months here, at Internet Real Estate Group, we have locked up a handful of absolutely first class prime domain names at incredible prices and when we're in a position one-by-one to say we own them, I think people will realize we're making some pretty strong buys. And I can't talk about any of them until they're ready to be talked about and in some cases there'll be no price discussion because we're buying them from large companies . . .

Monte: Yeah.

Andrew: . . . but we're still out buying things at pennies on the dollar and that's obviously always our goal. I don't think buying Credit Cards for what we sold it for, and I don't think the guys who bought it would even say it was pennies on the dollar, but I do believe they should be able to grow it into a certainly a bigger business than for we sold it for, but that's not but that's not what we're necessarily looking to buy. So, we sold it early but I don't know if we'd pay, buy what we sold it for, if that makes sense.

Monte: Right. And like I said, hey, you got $2.75 million for a domain name; that's a, you know, the key is, whether it's 5X's, 3X's, 10X's, whatever it is, its okay to take some money off the table and sell it, because now you've reinvested that, obviously, into some valuable properties and it sounds like you've really developing some of these properties . . .

Andrew: And [inaudible] in the space.

Monte: Yeah, and you're really developing some of these key brands, now, I mean, like the Music.com situation; what a big win that's gonna be.

Mike: Yeah.

Monte: You know, stuff like that's really gonna pay off in the future and I assume – well, maybe you can answer this for me, I assume you're now gonna keep an interest whenever you do these sales in the future or, you know, when its time to turn over the keys to the next company to take it to the next level, you're probably now going to hold on to some of the pieces now.

Andrew: I think we'd say this. By forming Internet Real Estate Group, we believe, really, we're in a position for the first time to create an entity where the sum might be worth more than the parts, if that makes sense.

Monte: Yeah, no, totally makes sense.

Andrew: So I think that while we're always open to an exit that provides a tremendous return on investment, we're in the buy and build game right now. Build a portfolio of 20, 30, 40 prime names (excuse me) and build a 20 and 30 and 40 prime names that we create traffic and revenue and brand value for and with the intent of probably being able to sell Internet Real Estate Group if we ever sold anything. I'm sure we'll sell a few individuals along the way, but we're probably more in "buy and build" mode than we are in anything else at this point. ‘Cause this is the first time, marketwise and track record-wise in where we're at that we actually think we can build an entity that, again, the sum is worth maybe more than the parts, individually.

Monte: Right. Now, let me ask, when you're buying the real estate today, are you allowing like you did with Beer.com sellers to keep a piece of the pie so that they win as well and stay motivated to, you know, look into the future a little bit.

Andrew: Deal by deal.

Mike: Yeah.

Andrew: We're open to that structurally and deal by deal, situation by situation. Some sellers don't want it, some do, you know, it's, each property is pretty much like anything. Whether you're buying malls or hotels or domain name properties, virtual real estate, each property owner has, a group has different goals in life and we're flexible and have the ability to be flexible in negotiating a deal.

Monte: Yeah. Definitely.

Mike: And, let me add something, Monte. I think at this point our reputation for being able to build these properties is also helping us because somebody's maybe willing to take a little less cash and take some equity because they've seen the level that we've been able to either build some of these things to or they've looked at our broad relationships with the Fortune 1000s and our techniques for being able to talk to these top CEOs, so I think we've sort of created a bit of our own lock by being able to, where some people just have to pay the, you know, it comes down to dollars and cents, we can be bidding against somebody who says, you know, I'll give you $3 million for that domain name and we say, well, we'll give you $1 million and we'll give you some equity in the deal and the person says, does the calculations, and says, I'd rather be involved InternetRealEstate.com; maybe own a piece of that or own a piece of my property and take less money upfront right now but not miss the big window.

Monte: Right. Right. I agree. I agree with that.

Andrew: It's a good time for all of us.

Monte: So, so, before we wind up here, one of the things I like to do during each show is to help the listening audience and the folks in the chat pick up a couple tips that help them do better at what they do on the web and that is to turn their online identities into something valuable and perhaps maybe be in the position to sell or buy and maybe even with you guys, partner with you guys as well. But if there's some hard-learned experiences, some things to do and not to do that could help everybody that's listening. Give me a couple points from each of you that you feel would help the listening audience, you know, be better at the online businesses that they do, whether its, you know, buying and selling domain names or developing their brands and so on and so forth.

Mike: One thing that I talk about and I think this is important for, you know, whether its search engine optimization, whether its creating real value, ultimately, the way that you create value is to create, you know, something that's valuable to the user. So adding content, creating good content, creating partnerships for content, bringing in people that have resources that you don't have to make your property that much more well-rounded. I think at the end of the day, you're going to wind up getting the search engine optimization because you have good content and you have links from other good people and you're going to wind up getting good traffic and when they come to your site they're going to have a good experience, they're then going to feel comfortable to buy. And I make this analogy because Andy and I did a program for the Grateful Dead, a shopping show that wound up on VH1 and the kind of core idea there was the Grateful Dead did not want to be selling anything to that audience. They didn't want to appear to be selling. But we all realized, us and the Grateful Dead, that if you provide somebody with a really good experience and a great show and something that they're into, if you then offer them something relevant to buy, they're not going to be offended, they're going to be excited. So if you put a Grateful Dead show on or if you put a site like Music.com up, if you're then going to try to sell, you know, herbal Viagra™ you're probably going to butt up against that user experience. But if instead, let's say Music.com being the case, if you can create a strong community, a useful tool for people to be able to find and you know, interact with people or are into the same kind of music as they are, you're creating an environment where sales naturally happen in a good way.

Monte: Right.

Mike: Where word of mouth happens, you know, naturally, and I think when you create something like that, that's when the Fortune 1000 or somebody who's big in that space or wants to be big in that space says, I will pay a premium for that domain name and that business.

Monte: Right. I agree. I agree with that. What else? Any other helpful hints?

Andrew: I would say the only other thing I would add is, you know, its, uhm, people were flying high in the '96, '94 – '99, 2000, then everybody went too low, quite frankly, much lower than they needed to be, which created opportunity for those of us who stayed around. And now we're heading back up where it's a little bit more grounded and a little bit more realistic. People figured it out a little bit. And people are starting to feel good again. But it is still, and if you got back in history and look at new industries, cable television and other, even television as a whole, radio, the evolution of industries, its still in the earliest of early, maybe not even in the first inning, if you really want to look at it from a baseball analogy.

Monte: Right, you're right. We are pure evolution. We're pure evolution on the developing market.

Andrew: The commercial internet is, depending on who you ask, is what 7 years, 8 years old? I mean, The Gap, I think, didn't have a website until what, '99?

Monte: Yeah. [laughs]

Andrew: So, 6, 7, 8 years old? It, it, it [inaudible] plus some.

Monte: And radio's 50 years old.

Andrew: So for entrepreneur types out there trying to make hay, and that's what I was saying about not selling early, it is really – it's so early we can buy these generic domain names still at great prices. And it's so early that people should focus on maybe crawling and maybe walking before they run sometimes. And focus on staying in the game, selling product to the low hanging fruit, do the natural traffic, take the search engine optimization first before they worry about going on television or doing offline media and just realizing that the internet is, like anything else, cable TV in its, 1970 or whatever, look at what that was even to what its compared to what it is even today. And what's the internet going to be like in 20, 30, 40 years? And the answer is a whole lot different than it is today and we are not even in the first . . . when we say we're in the second inning of the domain name game, I don't buy it. I don't think we're in the first inning , , , I don't think the real game has started yet. And the internet's now shook everybody out and starting to mature and the big companies are starting to make their play and doing it smartly and they ran away from the gold rush and now they've kind of survived in figuring it out. But we're early and anybody who's in this space should be lucky and realize they're early and not lose sight of that. That would be my only kind of . . .

Monte: Yeah, yeah. That is really so true. When you put this in perspective, it is, ahh, we're at the very beginning stages of, we're in the infancy of an entire market segment here, and that grows when people come together, like you guys, and we all come together as an industry and we help advance an industry by our working together and it gives it a lot more legs and turns it into something that we obviously see that its coming. It's going to be huge, billions and billions and billions of dollars. You know, just the thought of what we're going to be doing in 5 and 10 years, holding PDAs and doing our shopping and doing stuff on our cell phones and stuff in a much more easily manner, looking at 3-D images and basically seeing your friends in front of you while you're doing telephone calls and not just on web cams and stuff but probably 3-D images and all the stuff that's coming . . .

Andrew: Who knows? But, it's early

Monte: Yeah, it's early. Well, . . .

Andrew: By the way, it's a great, thank you for having us, it's a great show. [inaudible]

Monte: Yeah, yeah. I want tell you how much I appreciate you guys taking the time to be on the show. This is a, this is just a perfect example, this show, this network that we're on is something that's in its infancy also, this Domain Masters show, and the WebMasterRadio.fm network has shows all like this that are helping people like you and me and their listening audiences be better at what they do everyday on the web. So it's a kick-ass network and we appreciate the opportunity to have folks like you guys on and you clearly are innovators and entrepreneurs in our industry and I look forward to seeing you at T.R.A.F.F.I.C. East in Del Ray.

Andrew: Can I throw out one. I know a lot of domainers have been focusing on boards and helping the Katrina situation. If I can throw out a personal pitch, I actually found an individual who lost everything and they're just great people and I did a lot of due diligence reference checks on them and there's three kids and a father and a mother and a mother-in-law and they lost everything but $500 and I'm very close to landing them a job and I'm trying to get them a year of housing, so I'm sure my email will be somewhere accessible by anyone listening to this and if anyone has interest in helping that family, checks are being made out directly to the family through me. If that's okay, Monte.

Monte: Oh,no, no, that's okay. I can put up, tell me your information on the air and I'll post it on the chat for that and for your site in case people want to submit names for consideration and that stuff.

Andrew: The website is InternetRealEstate.com and we'll be switching to the email soon but right now you can use the Deal Jam email amiller(A-M-I-L-L-E-R)@dealjam.com. And Mike and I will both have Internet Real Estate emails; we'll update you imminently.

Monte: Okay, great.

Andrew: And as far as helping, this man is named Floyd Stevenson and he's just one family and I decided I wanted to help one family, so if anyone has an interest in helping one family that really needs it, that are really good people and checked out and hard working people who lost it all, you know, whatever helps, everything helps.

Monte: Yeah, definitely. Definitely. Well, we appreciate it. And again, I appreciate your time. Look forward to seeing you and meeting you in person in Del Ray in October and I'm sure we'll be talking before then. [laughs]

Mike: Yeah, thank you very much.

Andrew: Thank you.

Monte: Okay, thank you very much.

Mike: Bye, bye.

Monte: Okay, take care. Alright, folks, well, what a great show tonight. I apologize we ran over but very good content and I hope that everybody that was listening picked up a few good pointers. Both Andrew and Mike are definitely well-known in the industry. They have a lot of experience with the properties that they've owned and sold and regardless of everybody's opinion, its, on selling too early or whatever, they obviously are figuring out the right recipe and they have some kick-ass properties on the ‘net, so I look forward to hearing them speak. They are the keynote speakers at the T.R.A.F.F.I.C. East show coming up in October. If anybody's interested, I think the show's almost sold out but if anybody's interested in finding out more about the agenda of that show or attending, go to targetedtraffic.com and you'll see the agenda. I'm on a panel, there are a couple panels. We're doing a live domain auction, it was just announced today, with a live auctioneer and we'll start to see some of those values come out in a live environment with a real live auctioneer in a Christy's-Sotheby's type format. It's going to be really cool and fun and there'll be buying and selling going on on the floor and a lot of great content at that show and the other shows that are scheduled on the docket this year as well.

So with that said, I'll let everyone go. Thanks for listening this week. If you have any feedback please email me at monte(M-O-N-T-E)@moniker.com. Archives are up on our website at Moniker.com and also on this network, WebMasterRadio.fm. Please check out the other shows that are on the network; there's some great shows that can help everyone out on their business, everyday.

I will be back, same time, same place with another great guest or two. Be the master of your domain. Take care.

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