Domain Masters Radio Show

Monte LIVE at the T.R.A.F.F.I.C. East Conference

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Announcer: Live from T.R.A.F.F.I.C. East in Delray Beach, Florida. WebMasterRadio presents the best and coolest things going on at T.R.A.F.F.I.C. East, where domain owners and sponsors come together and say âLet's make a deal!â And now, WebMasterRadio and Moniker.com present âT.R.A.F.F.I.C. East Live!â starring the internets big dealer, Monte Cahn!

[Applause]

Monte: Hello, this is Monte Cahn, your host at DomainMasters. We're doing some live interviews today with some domainers here at the T.R.A.F.F.I.C. conference East. My first guest is Darrin Cleveland and he's attended a couple of these T.R.A.F.F.I.C. conferences. Tell me a little bit now about what you've gotten out of the conference so far today and what you look forward to based on the things that you've learned so far.

Darrin; I would say that T.R.A.F.F.I.C. consistently obviously has grown, poising the, ah, benefiting the industry evaluations, as we keep getting, going further into each show and each session, its elaborated, you know, through the speakers, guys that have had success, I guess you could say that its quite inspiring for people like myself who aren't tremendous players in the domain business, but have large portfolios and its just, I guess, inspiring to say the very least.

Monte: Right. Now, you have a pretty large portfolio, though. You have, ah, tell us a little bit about your portfolio, what its, the different niches its focused in on and what you're plans are to develop that portfolio out, whether its through PPC or whether you're going to develop some sites out.

Darrin: Um, yeah, I guess I have a pretty large portfolio but I still view as I'm still just a beginner in the industry so I guess in comparison to other people that are here, I do have a small portfolio; to the average guy that just buys domains, I have a large portfolio. But that being the case, I mean, you know, we're focused in quite a few different industries. None that we have a tremendous amount of, I guess, time or real plan for yet. And that's obviously why I attend these shows, to say, you know, what is the next good thing or where can I take, or what part of my portfolio can I develop and that's actually why I'm here, so I don't know that I can answer that question.

Monte: Great. Well, if you had to just, I know that you're in a hurry, but if you had to give a couple tips or pointers to other people that are in your situation, that hold anywhere from one to a couple thousand domain names and you're wondering what to do next to optimize that opportunity, what would you say, based on what you've learned today or what you know inherently now as being a domainer for several years?

Darrin: Um, nothing's for sure, that's for sure [laughs]. It's a daily change. You got to test out, you know, various things, various PPC companies; make sure your names are secure with obviously a reputable registrar, and without pulling any plugs, I'm sure we know who those guys are.

Monte: [inaudible] [laughs]

Darrin: [laughs] Well, you know where my domain names are, Mont. So, Monte at Moniker, that's it.

Monte: [laughs]

Darrin: So, but, I mean, you know, the recommendation is you gotta test, you gotta see what's out there, you know. And keep the wheels spinning. As Rick points out at the show (the creator), you know, this is a roomful of entrepreneurs that are really the most forward thinking people in the world. Not even on the internet; in the world, period. You know, and the gentleman we just had at our last session there, I mean, those guys, your hat's gotta be off to them and you only hope that even if you have a tenth or a hundredth of the success that they have, you've done well in this business, so . . .

Monte: Right. Well great, thanks a lot, Darrin, for the first interview of tonight's live broadcast of T.R.A.F.F.I.C. East. Thank you very much.

Okay. My next guest is Ron Jackson, Chief Editor for DNJournal. This is the industry-leading rag in our industry and always gives us good, up-to-date information on domain sales and what's going on in our space. Ron also covers the events such as T.R.A.F.F.I.C. and Domain Roundtable. Give us an assessment of what's been going on so far today and what you think the big message was from the two or three sessions that we've gotten today.

Ron: Well, this of course is the opening day and it's just been awesome. We're three-fourths of the way through it and as we speak, we've just turned the keynote address with Andrew Miller and Mike Zapolin, and those guys, you know, I think they blew just about everyone away with what they've been able to do and really brought home the message of the value that's inherent in a great domain name. They talked about how so many of us get too focused in on how much PPC revenue can you get out of this, without looking at the big picture of what a category-killer domain can really do for you down the line, so and that was a real highlight. Actually, every session has been. You learn so much in every session and you've got a lot of people coming in and you think you got this thing down and they know it really well and you realize how much you don't know. And getting in a situation like this where you can network and learn from other people, you just feel like you're taking an enormous step forward and exstrancing a great deal of growth in a really compressed period of time, so its been really rewarding.

Monte: Right. And we do see different approaches here. I mean, there's those that monetize their domain names through PPC and as we heard from the keynote speaker today, a group of very high premium, high profile domain names being developed out, such as music.com, domain names such as beer.com, the famous sale of creditcards.com and then computer.com. The . . . do you think there's a key advantage in any one of those industries after you listen to the keynote address about developing a site versus using a strategy of having a lot of domain names and then making money on a monthly basis, utilizing the PPC advertising market while its still alive and doing well and increasing value?

Ron: Well, there's a lot of people; it depends on the lifestyle that they want to enjoy. Some people just don't want to put the development work into it; they understand that they could make more if they put more hours of work into it, but they're doing very well, enjoying life, so they're very content with that. But even that PPC model that a lot of people are content with is changing. That came out of one of the morning sessions where DomainSponsor talked about blending in a lot of these elements of development into a parked page. More; they're going to put more content in there. They're going to change the look of it. They're going to start putting e-commerce links in there, where you can go to a parking page and not just hit a list of 20 links but actually carry out a transaction from that page before you go a step forward. So we are evolving as we, you know, even as we speak, into a situation where you're going to have much more, a parked page is going to be much more like a developed website without you having to put the extra hours into it.

Monte: Right, right. Well, that's great. Give us a little idea of what's going on with DNJournal these days. Obviously, you have some great stories and the monthly stories that are coming out â but give us bit of history, a little bit about the online rag and how you got started with it. I know we've covered it a couple times with WebMasterRadio but where do you see your efforts going in the future given the market today?

Ron: Well, I kind of like to leave my horizons open 'cause I see things change so much, so you really can't get in your mind that this is what you're going to do for the next 2, 3 years because the world, our world, could be different 60 days from now. As for why I started out, really, in fact that's a perfect example of it. I didn't start out with a plan of where I am now. This is really not what I intended. What I intended when I began was being a newcomer in the industry, just to find a way to kind of jumpstart my own business by getting to know a lot of the movers and shakers. And I saw there was an opening there for a magazine that wasn't being done, so it kind of killed two birds with one stone. But once I got into doing that and I made the connections that I wanted to make, then everyone kind of said, you know, this is really great. It's a nice central repository for information and interviews and now it's kind of taken on a life of its own and has become a business that's as big as my own domain business. I never intended that. So you have to leave the options open and this is the river that's flowing, and just kind of sit on the raft and flow along with and see where it takes you.

Monte: Right. Well, that's great. Well, we're excited to work with DNJournal in the future and really appreciate your time and your time for the interview tonight and it should be a fantastic show for the next couple days. Hopefully, we won't get hit by Hurricane Wilma. [laughs]

Ron: I certainly hope not. Monte, good to see you again; it's always a pleasure.

Monte: Well, thank you very much, Ron.

Ron: Okay.

Monte: Alright, my next guest is Brian Banco from FindDentist.com and some of the other sites that you have â what's some of the other businesses that you have?

Brian: Ah, LaserGuideSurgery.com, MotocycleHelmet.com, MobilRingTones.com; a slew of others.

Monte: Okay. So you have a portfolio, manage a portfolio of how many domain names in total?

Brian: Ah, we have right around 6,000 today.

Monte: Okay. So 6,000 and a fairly large holder. And given the different strategies of the conference that you've heard so far, you know, hold and develop the websites or monetize your domain names through PPC, what are some of the mixes that you guys are doing with your portfolio to help make you guys successful and give us a little bit of an idea about what's worked for you and what you've learned from the previous years on what you need to do better.

Brian: That's a really good question and you put it very well. We are a developer and a holder so we are constantly acquiring new generic, sort of top level domains if we can. Maybe in this room its not top level but to us their top level, so maybe second tier overall. And what we do we look to hold those and develop them and right now what we use to monetize the sites are search engine optimization combined with business development deals as well as ad sensor feeds from whether its Overture or Google. And what we need to do better is develop more sites on a quicker basis. And what we're doing to get there is hire more writers.

Monte: For content.

Brian: For content, exactly.

Monte: Now, are you actively, I know you're still actively, you're still pursuing domain names you want to buy, is that correct?

Brian: Exactly. We're always on an acquisition basis because we're not selling.

Monte: Right. So you're definitely not selling domain names. You're a holder and a developer.

Brain: That's correct. I mean, just as we heard Andrew and Mike speak earlier today, it's about developing a site and let it marinate. I mean, really let the site take on its own business model. Let people come in and get involved and let business â or let advertisers come in and get involved and build up a company that has good will and then look for an exit strategy later on.

Monte: If you could give a couple, maybe three, good points for the domain audience that's listening on how to be really successful with their domain portfolio, what are two or three of the most important things that you would tell others to do with their portfolios to be successful on the web, earn money and have longevity.

Brian: I think, I think it's hard for me to answer that without being biased towards development. One thing I would highly recommend is that the web owners try to make it more â make their information more readily available to be contacted for business development deals. I think because, when you throw up a splash page and there's no way to contact the owner, you know, easily, because they don't want to get â and this is hard to say â because they don't want to be bothered. At the same time, I think there's a lot of opportunities that could be explored if they made themselves maybe more available to discuss business opportunities, but again, I'm a developer so it's a little biased.

Monte: Well, Brian, I really appreciate your time for taking a couple of minutes out of the day and spending some time with us on WebMasterRadio and on DomainMasters and I know that you'll be successful because you have a great portfolio and we've done business with each other and its guys like you that give us inspiration to the other newcomers in the business who are just starting to develop their strategies online.

Brian: Oh, thanks a lot and really, really appreciate what you guys are doing; you're doing an amazing job.

Monte: Thank you. Alright, my next guest is Brian Noll. Brian happened to be a guest on our show a few weeks ago; I guess it was about a month ago or so and I got him in between taking care of some kids and in the middle of selling some properties and buying some others but Brian was up on the panel today and talked a lot about what he found as a newcomer in the domain business and even though he owned a lot of names, you found a very good niche in terms of developing a niche strategy with a certain aspect of domain names or a certain niche group. Tell us a little bit about that and what's been successful for you.

Brian: Yeah, hi Monte. Thanks for having me on. It's a very exciting week. What you're referring to is the golf niche. So we went out a year ago and we were able to purchase GolfLessons.com; that was at first just going to be a hobby site. Thought I'd put some stuff out there, as I'm a golfer. But once I registered that name, I got the bug and started researching the golf space online and realized there was some real opportunity to move into that space and I came across what's the jewel in my crown on the golf names â GolfCourses.com. Found that to be available, owned by an individual in Washington State. Started negotiations with and it probably took about three months to bring that one in to close but once I landed GolfCourses.com, I knew I think I'm on to something here, so we really went after some other top golf properties pretty aggressively and did some creative financing, did some creative deals through you, through Moniker, helped with some of the escrow, in particular, I think all of my deals have been over a period of months so using that technique we were able to lock up multiple names in the golf industry and so that's where we're at now. We own probably up to 250 â 300 golf names. Five high caliber names and some next tier names.

Monte: Right. So, so, here we have a domainer who has a very niche approach, very focused approach on golf and golf-related sites and you've been able to strike some very creative deals with golf resorts and golf clubs out there that are now putting their links on your GolfCourses.com website in exchange for advertising and other types of things and obviously it's a business model for you that's going to be making you a lot of money.

Brian: Absolutely. The way we started was by selling premium listings on GolfCourses.com. If you're a golf course in Missouri, out of 350 golf courses you want to get to the top of the list in Missouri, pay us an advertising fee, a monthly fee. We also sell some advertising. You know, our pitch now is, you know, if you want to get your product in front of golfers, that's what our websites bring. So, pretty easy, the message is simple. Golfers surf our websites and if you want to pay to be in front of those golfers, we could probably help you out.

Monte: Alright, cool. Great. Well, Brian, you've been pretty successful at using the finance model for your domain names and I guess that's the approach that we're going to talk about tomorrow in the bankers panel and that is being able to finance domain purchases, instead of coming out of your pocket all at once and its been very successful for you, so we appreciate the time for the interview and really appreciate the fact that you've been able to contribute to the panel today.

Brian: Thanks a lot, Monte. This is fun.

Monte: Ah, my next guest is Romero Cannalas, right?

Romero: That's correct.

Monte: And Romero has a whole suite of domain names as well. How many domain names do you have in total?

Romero: Approximately 1,700 domain names and I specialize in political, legislative, capital and campaign domain names. I also have an extensive collection of Wall Street Names that I need to monetize or sell.

Monte: Okay. And what are some of the top names in your portfolio that you own right now?

Romero: Well, for example, I own mycapital.com, which is one of my premier sites that deals with political information. I also own whitehouseinsider.com, which is ideal for someone who's interested about the activities in the White House. One of the domain names that I have not developed is wallstreetinsider.com, which I'm sure somebody on Wall Street would be interested but I have not done anything with the names so I'm hoping to either develop it or sell it to an interested party who has some interest in Wall Street.

Monte: Now has this been your first domain-related conference that you've attended?

Romero: Yes, this is my very first conference. What started out as a hobby has turned into something bigger. I formed a company called Cyber Capital Ventures to go on ahead and monetize my domain names and develop some sort of business relationships with others but it was a hobby that turned into a legitimate business and now it's growing and growing.

Monte: Great. And the key things that you were able to get out of the first few panels today, if you had to list them in an order are what? You know, now that you've come and you've seen other domainers that have been successful using a whole lot of strategies from very niche focused approaches, which you have some in your portfolio, too, developing out different websites and different niche markets to monetize your traffic by purely doing PPC, what are some of the things that you've learned and picked up so far just for the first day?

Romero: I think one of the things is establishing relationships with people in the industry who know how to monetize domain names or who know how to develop a product. I'm very new to this industry but here I found that working with people who have more knowledge about the industry than you can actually be mutually beneficial to both, so since being here yesterday, I've spoken to folks; we're going to be able to help my business grow and help my domain name portfolio become profitable and helpfully sell some of these domain names. But I value relationships; I'm in the relationship building business so this is a great opportunity for me and my company.

Monte: Right. And that is a good point. You want to, when you attend a conference like this you at least get to meet the people you want to work with and that's one of the reasons we're meeting each other and so you want to look at people, into each other's eyes and make sure that you're able to say, hey, I met that guy, he's a nice guy or I met that lady, she's a nice lady, we're going to do business together, I trust them, instead of doing everything all virtually all the time.

Romero: Exactly. Exactly. And I think, you know, I value relationships and I value trust and I think one of the things here is that I've met individuals face to face and I can say this is an honorable person, I can deal with them. And this is a great place to be. I'll probably be in Las Vegas in May, so I could go on ahead and learn some more about this industry. But clearly, my 1,700 names have to be monetized or part of it has to be sold and you know, we'll see what happens but I'm sure some people will be interested in my portfolio once they see what I own but I basically have dusted off my domain names and I'm going to put them to use from now on in the future.

Monte: Great. Well, we'll be happy to help you out with that, too. So thank you, Romero, for being on the show and for being live with the WebMasterRadio broadcast of Domain Masters at the T.R.A.F.F.I.C. East Conference.

Romero: You're a great man, Monte. A great man. Thank you.

Monte: [laughs] Thank you. [laughs]

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[Applause]

Monte: Hello, welcome back to the show. This is Monte Cahn, your host for DomainMasters. I have with me two very special guests that I had on the show about a month ago, I'd say: Andrew Miller and Mike Zapolin from InternetRealEstate.com; uh, InternetRealEstateGroup.com, formerly DealJam but these guys have been doing a great job in really building out top-level brands in the industry. Domains like Diamond.com, Beer.com, Computer.com, which they happen to be reacquiring. And they were the keynote speakers in today's events, so I wanted to get a hold of them and have them give a little bit of insight about the event in general and a little bit about what they've learned so far about being here and being able to speak. So, Andrew, what's you're take on the show so far and then, do you feel that you're contribution today as the keynote speaker helped lighten up the audience, 'cause I think it did?

Andrew: If you think it did, then I think it did. But, ah, it's our first time coming to the event and I think Rick and Howard have done a great job and this is a burgeoning, early time and kind of the biggest message we sent out today was how early we are. And so it's great to get together with 300+ other pioneers in the domain name, in traffic space, all who are early pioneers, since there were pioneers. And hear everybody and see everybody and what they have to offer and what they bring and really the kind of underlying message we want people to leave with is these are incredible, incredible assets and incredible times and incredible opportunities and this is just beginning and emerging and we're all on the cusp of it and make sure, you know, we all benefit from it, as those who are on the cusp of it should.

Monte: Right. And, Mike, why don't you go over some of the key brands that you're developing out now and kind of what direction you're going in with those brands. You guys displayed in your PowerPoint program a kind of step approach to acquiring a domain name and doing initial things for SEO and then bringing it on to the next stage of where you're really going to build it out to be a big brand and site and start getting some backing behind it, make it public or build it so it makes some big revenue-generating opportunities for the site and for the people that own it. Give us a little background about some of the more successful sites that you guys are working on and kind of like the future direction in that 5-step approach that you guys mentioned.

Mike: Alright. So, basically, the underlying brand in InternetRealEstate.com. So Andy and my philosophy in the past has been: buy Beer.com, develop it, sell it. Ah, Diamond.com: buy it, develop it, partner. And so as we've done that we've gotten, we been rewarded for that, we've got great partnerships, but we realized at this point â being early enough in the business â we should keep some of this stuff. It's now time that the sum be worth more than the parts. So right now, in the portfolio, are a number of domains like chocolate.com, podcast.com, safety.com, relationship.com, computer.com, you know. So, we've got this core group of domains. We've got about a half a dozen that were in process whether its lawyers going back and forth on formalities on contracts or negotiating deals with people; we've got a half a dozen or so that we're going to be adding to the portfolio that are as incredible, maybe in some cases they're more incredible than anything else in the portfolio and our feeling is that if we can be patient, and I think the message that we're trying to get across is that we're so early, that there's always an opportunity to exit for more money but are you exiting too soon and I think a lot of times people wave a check in front of you take it in expense of, you know, the future value of that property or where that marketplace is really going. So we want to at this point buy, develop, hold, and for InternetREalEstate.com itself, to have the catalog, you know, category and catalog value that an interactive core would have. So that you not only own these great domains â and they each have a great business unto themselves â but they actually help each other. So while Barry Diller has Hotels.com and Match.com and Tickets.com, obviously, if you're on Hotels.com and you're in some city and you may want tickets for a show; you may, if you're on Match.com want something, you know, on one of his other sites. If you're on LendingTree and you want a loan, so that they can all help each other . . .

Andrew: [inaudible]

Mike: Yeah, exactly . . .

Andrew: . . . each other from the traffic and the amount of visitors that are on there because a guy looking for a girl on Match.com is also interested in buying concert tickets and so forth . . .

Mike: Exactly.

Andrew: . . . and so they're all linked together.

Mike: A lot of good synergy. So getting the bonus of the synergy, getting the goodwill that's built into owning a considerable portfolio, so we're just, if anything our message is, we're buyers right now.

Monte: Right. So to Internet Real Estate Group, you're buyers now, you're buying and developing. Now, you guys do something that's unique that really helps the seller who's looking to cash out a little bit but it sounds like you do some creative stuff by letting some sellers have still a stake in the domain name so they're never kicking themselves in five years, like, God, I shouldn't have sold that out, you know, for everything that it was worth, 'cause now it's worth ten times it is, so the good news is that you're open to that and you want to do that. So how does that work within your infrastructure?

Andrew: I think that we're creative about deals. We have a formula. We're going to buy something at the price we obviously feel like we want to buy it for or we'll have to walk away, obviously, from the individual property. If helping get it there involves being adjustable, flexible, open-minded, on how cash is paid, on amount of cash, on amount of equity, on amount of upside. It may be that we have a situation on a name we're buying name where they want to just give it to us for 50% of the company, which doesn't work for us, but that's what they want. They don't want any of the cash, they want the upside, they want to be involved, so you know we'll end up with . . .

Monte: You'd rather have a much more controlling interest and rather pay cash for that and then keep a little stake in the game if that's important.

Andrew: Because they're value-added and they're excited, so they, we'll end up with some amount of cash, a much smaller piece of the deal but enough to make them happy and maybe even a job for them involved within that site. So, you know, it's just the companies that want their cash and they want it now.

Monte: Wow. Now, Mike, what do you guys look for when you're looking for some of the premier properties, you know, some of the single word brand names that you talked about â how do you value what you're going to pay for a domain like that?

Mike: Yeah . . .

Monte: If it's not based off of a PPC revenue, which it sounds like its not in these cases, you must have an inherent vision and an idea of how you could take it to the next level so that I guess is part of it, but maybe you could go into a bit more detail about that.

Mike: Yeah, it's, um, I like to think that its more scientific than it is, but its, you know, there are certain criteria and you know, of course we look at how many people are searching and what people are paying per click and but beyond that we're going to look at, you know, who the players are in the space, what our relationships within that category are, what strategic relationships we can make within that category. Because that's the future value that your going to develop out of it. So, there, the idea, the concept is to of course own top, top level generic domains, but to have them be in spaces that we think are evolving as a result of the internet, as a result of society, you know, whether its credit cards and consumer debt or consumer issues. That's something that can escalate it, um, beyond anything that maybe we could do ourselves. At the same time, if we have a relationship with different credit card companies through our business, if we have something specific that could add value or maybe be the CEO of that business, then maybe we'll put a different valuation on it. And I think the cool thing about domains is its sort of the beauty's in the eye of the beholder. Somebody can sell you something for a song that's worth a lot of money; or somebody can, you know, think their domain is worth an incredible amount of money and you might not think its worth anything. So its kind of like finding that middle ground between what they want and need, and then I think the other part of it just comes down to track record. If you have a track record like we have and some other people have here, of being able to develop these domain names and take them to the high level, exit them, find the right partners, and somebody's going to consider their equity as valuable from day one as opposed to something that they're never going to get.

Andrew: Right. Just adding to that, I think that, you know, someone would always say, well, if you're willing to pay 500, why wouldn't you pay 750? If you really think that it's going to be that valuable, you know, what's an extra quarter million dollars over the course of time and that's a question that we get all the time. Because at some point we draw our line in the sand and they'll say, you're walking away from it over 100 grand? Or 50 grand? Or 5 grand or 500? And, as I think Mike pointed out in our keynote today, Zappy did, is that one of the things that we also look to do though is buy at a point where if, for whatever reason we had to bail on the property, and just sell the vacant land without having a successful, income-producing development, we actually will make money on that transaction, as well, immediately, a year, 2 years later and that assessing it from a risk-reward at that point every dollar matters. You know.

Monte: Right.

Andrew: Every 20%, 30%, so we may have not been able, in a bail out, to get, you know, 500 but you could have got 300, you know, and you paid 300, you know, now you're not leaving a couple hundred thousand dollars on the table. We don't like to lose. So we are pretty stringent about what we want to buy at. We're fair but we're not just gonna . . . the rational still needs to be, well, I want to live in this house but it's 300,000 more than every other house that's ever sold on the street; I guess its how badly you want to live in it. But you also have to be prudent, you know.

Monte: Well, with that said and we'll wind things up, but what is the next, hot online industry that you're looking to acquire domain names in? So you mentioned, you know, Match.com for dating and of course you guys have been in the credit card and the debt space through CreditCards.com and confections with the Chocolate.com domain name; where do you see the next segment where people who have domain names want to contact you and say, hey, I have a property or you probably already seek those out, but what's the next social industry?

Mike: I mean, I would say that society sort of dictates some of these things so, you know, as the debt swells and personal consumer debt swells, there are areas there. PodCast.com, PodCasting.com, that we own, is something that society itself brought out . . .

Monte: That's really hot. That's a really hot market as we know from WebMasterRadio and Domain Masters. People are podcasting down our shows and all the shows on the network like crazy. It's a wonderful thing.

Mike: Yeah.

Andrew: I think podcast your shows, I think.

Monte: Great.

Andrew: I think, from my seat its single word, clear-as-day, dot coms that represent a category and industry a product, probably consumer product, a consumer category, a consumer industry, more than something that isn't touched by consumers. And anything that fits that bill, that really doesn't stretch, the single word category game; maybe in some cases a two-word â credit cards being an example of a two word â or even other two words. But a one, or in some cases two-word, single category that just says, it is what it says, it says what it is. There's no gray areas at all . . .

Mike: One other thing I would add. I went to, I've been to China a couple times in the last year and I think there's some emerging markets like that where the dot com and the category killer there, almost means more than it does to general population here have been bombarded with all kinds of opportunities and situations where there, you know, they, ah, the big IPO out of China a couple months ago, but do dot com, was DotCom and it was an English, Chinese, an English equivalent of a Chinese and I think you're looking at markets like that where they have a 1% penetration on credit cards; when they get to 10%, 20% penetration, I mean, it's crazy . . .

Monte: Their 10% penetration is bigger than the United States penetration for credit cards.

Mike: Yeah.

Andrew: We are interested in words clear as day to them in China, in English.

Mike: [laughs] like âsexâ [laughs]

Andrew: Yes. Exactly.

Mike: Or âshopâ or âbeerâ or, you know, anything that . . .

?: Or âsexâ . . . [laughs]

Monte: Now what about the country codes and how fast that's emerging? That's growing at a twice as fast rate as the dot coms space, so for instance . . .

Mike: I'm . . .

Monte: . . . things in dot cu, dot uk, things in de; the hot European market, dot du, that's coming on . . .

Mike: I think that's a great opportunity for players that understand that space; maybe people in the market, because for me, I think maybe as you add the dot biz, dot usa, dot edu, dot de, as you add these things, it just, you know, as time goes by its like the 1-800 number. You can have 1-800 and then you have 888, 876, 866, all these exchanges and that just adds more credibility to the 800 number. It says to somebody, if you're the dot comer or you're the 1-800 number you've been here for a long time, you're credible, you're a player in the space and I think that its going to take those other markets longer, you know, to get their own credibility or get people tuned in to, you know, typing them in or positioning them or as being credible, where we're a bit about the path of least resistance. We'd rather, you know . . .

Monte: We're the most . . .

Andrew: Billions of dollars are spent every night by Wal-Mart on branding the actual word dot com. With that said from a defensive posture, sure, we should look into it at some point, owning chocolate.eu, you know, and, sure, you know.

Monte: But not a development strategy in those spaces.

Andrew: Not [inaudible] right.

Mike: There's enough incredible property out there that has been either sitting in the hands of sudden technologists and not developed or some that were turned into businesses that didn't make it, that, you know, in that top 100 or 200 domain names that might be on anybody's list, some of those names are still out there so we feel like we should focus on some of those. Some of those even have some nice revenues and things like that where, you know, going after some other country where, you know, maybe two years from now, five years from now, you build a great business and then the country themselves, the government, you know, declares eminent domain and takes away your business, is very potentially, you know, out there and I think that we just understand this environment for business and it's a business, you know, that I think that people, the more and more they understand it the more the banks understand it. They're going to start financing it. It'll be just that much longer before they start to finance other things outside of dot coms.

Monte: Right, right. Well that's a good point.

Andrew: [inaudible]

Monte: [laughs] One last . . . just give me just a couple new tips about developing out people's property that will help them out in case they have a domain name and they're on the fence about what to do next, you walk through this five-step process, so maybe you can help some of the domainers maybe don't have the most premier properties but know that they have a nice brand that they could build out and go that route versus PPC and parking and all kinds of other stuff.

Mike: Real quick, I would way, think of it like regular real estate and just think to yourself, okay, what would be the least costly way that I could show somebody going by my property what this property could be and what the possibilities are, what opportunities are here. It would be similar to a piece of oceanfront property. If it's just, you have a for sale sign, it represents one thing; if you can go out and do some blueprints, that's another thing. If you get Donald Trump to put his name on it and say he's building it with you, then it's going to have a whole new value. The idea is simply do things that are cost effective but that enhance not only the value but when somebody goes to buy you or partner with you, they have to pay you based on the goodwill or the opportunity costs for you not doing what you might otherwise done.

Andrew: Right. If you're building a development, if you want to go so far as to take those blueprints and build something, you gotta decide are you going to be the general contractor? Or are you going to find somebody? Obviously, there's always bigger risks in outsourcing,'cause you're spending you money and then it doesn't go right, but I think that the answer is, you know, as Mike said, whatever you do you should look at it as, here's my piece of land, its bare â how do I enhance its value? Most people understand, you know, a plot of lands versus . . .

Monte: That's a good simulation 'cause we are talking about virtual real estate.

Andrew: If you got given by your great-Aunt a plot of land on the waterfront, whether it's the most premier spot or second spot back, what would you do with it to increase its value? Would you build a house? Would you put a for sale sign up? As he [Mike] said, would you go partner with Trump and build a tower? And I think if you could look at it that way, you know, that's a strategic way to evaluate how to get there and take the baby steps.

Monte: Alright, great. Well, I really appreciate the time and it was great listening to guys talk. You're a true inspiration to those domainers in the audience and the companies that are supporting the domainers because you've been able to demonstrate over and over again that the brands can be built out, they can be successful, they can sell for a lot of money, they can be worth a lot of money and its kind of like what everybody can shoot for with their property. So appreciate all your time.

Andrew: Love the show, love the pod casting, love to be on at anytime. PodCast.com we're looking for content so, you know . . .

Monte: Oh, well, DomainMasters will be right there then.

Andrew: [inaudible] you guys more to play

Mike: Thank you.

Monte: Okay, thank you very much. Okay, we're going to break for a little commercial. We'll be right back with Rick Schwartz from the domain traffic convention here in the Marriott Hotel in Delray Beach. Hold on.

[Commercials]

[Applause]

Monte: Okay, we're back from commercial. My last guest this evening is the Domain King, the one that put together T.R.A.F.F.I.C. 2005 here in Delray Beach, Florida. This is now the third show and quite frankly, a very successful event. There's over 300 people here, and Rick's been kind of an innovator in the marketplace for many years with domain names and Rick, what is it that's making this show so successful and where do you see this show being instead of the first one a year ago, when we had about 100 â 150 people, what's been the big difference this year in getting all the people here?

Rick: Well, I think when they came last year they were pretty skeptical and they really didn't know what to expect. They were all pleasantly surprised that we were so serious about our business and our traffic and we wanted to monetize it and so now the show is more than doubled in size. Like you said, its over 300 people. And people like Yahoo and Google and Moniker are coming with armies of people. And they're coming to do business and they're networking, they're sitting around in every nook and cranny of the hotel and you can see they're doing serious business. And they're all learning from each other. And every year we're just going to keep adding different segments and introducing it, like in Las Vegas, we hope to get the Madison Avenue advertisers involved and this show we're bringing in the bankers, because if we bring in the bankers and we bring in Madison Avenue, we're going to propel the entire industry into a whole different level.

Monte: Right. And really the whole industry's developed quite a bit. I mean, who would even imagine that you would be able to support a whole trade show with domainers. You know, people thought we were crazy 5, 6, 7 years ago when we first got in it and now we have, you know, a third successful event and there's another group that does a domain show as well and we have an online radio broadcast now that's focusing on the domain industry and even another registrar that does it, GoDaddy, that does their own radio show. Where do you think that . . . I mean, this time around we have some of the bankers sitting on the panels and we're going to be talking about loaning money, find creative financing with domain names, looking at their inherent values, property values, just like real estates looked at. Where do you think we're going to be between now and Vegas to get those, some of those banking institutions to start really looking at domain names as an asset that you can actually loan money on?

Rick: Well, first of all, the industry is still in its infancy. We're maybe 10 years into the program and what's going to happen in the next 10 years is just going to surprise everybody and you know now there's historical data before maybe it was just wishful thinking and a lot of hope that we had our finger on something. But now there's historical data, domains have been earning revenue for a decade now and domains have been selling now for a decade, so people are starting to take this channel seriously and when you compare domains to other investments, the world has never seen investments like domains. There's no stock, no property, no other investment in the history of mankind has ever accelerated this quick, ever. And its finally starting to be recognized for what it is and that's why we're all in this business to begin with. We saw something that the rest of the world missed. Now, they're finally starting to say, geez, maybe there's something here.

Monte: Right. So now they're jumping in. Now tell us a little bit about your portfolio because now you have a quite sizeable portfolio, and you've had your portfolio for quite some time and its been a portfolio that has a little bit of history to it. A lot of it was registered back in the good old days, back in the 90's, you know, when domain names were still available, some good names; but you've also done some acquiring of some good premier properties to help enhance the value of your other domain names. Talk a little bit about that and that strategy.

Rick: Well, my domain portfolio is small in comparison to today's standards. I have just 5,000 domains and we're talking guys that have 500,000 and a million domains, but I have domains that are highly targeted. I don't buy them very often any more but when I do they're important domains; maybe not at the moment but they will be important as the whole channel unfolds and this year I bought property.com for $750,000 to match up with properties.com and that goes with a number of my other real estate domain names and as a lot of you know, I started in adult with names like porno.com and others that I probably can't say on the air . . .

Monte: Yes, you can. You can say them.

Rick: Well, I own ass.com and bitch.com and whores.com and slut.com and what I always did, I take . . . the reason that I went into the adult domains to begin with is when I started, mainstream wasn't there. There was no mainstream domain. They were impossible to monetize. But I always knew that mainstream domains would be where they're at eventually, so what I would do is take the earnings from the adult domain and I kept investing it in prime mainstream properties and I think eventually, well, they are paying off now but as time goes by they're going to be paying off more and more and more and I believe some of them will be worth tens of millions of dollars and maybe even more than that.

Monte: Yeah. That's a great strategy. And you've been able to . . . you bought properties.com to match up with your property.com domain that you already had â the other way around. You owned properties, but you bought property. So now you probably own something that's worth two times as much as it ever was and I think you actually had an offer on the domain name right after you bought it, so you already verified that you paid the right price for it.

Rick: Yeah, about 45 days after I bought property.com, I have a, for $750,000, I have a standing offer for a million dollars for property.com, which of course I have absolutely no interest in taking because it has I think no relevance to what I think the actual value of it. I mean the value of a domain name is in direct proportion to the product you're selling and property and properties around the world are things that sell for five hundred thousand, a million, ten million and in the future, probably hundred of millions of dollars and what is a click worth if you sell something that's worth $10,000,000. I don't think its worth a dime and I don't think its worth a quarter but I also have the other side, having candy.com, which is a penny-type domain but you're liable to sell tens of millions of dollars of candy, so it works out pretty good.

Monte: Right. And the unique thing about the candy.com domain name, which we've discussed before, 'cause we've been counting the market a bit to see who the interested buyers are, but it is the top domain name in the confection space. There isn't a top, a more top level domain name. And another thing about the unique industry in which candy resides is that that's the only industry that I know of where you acquire a customer at the very earliest of ages and feed them throughout their internal life and then generations evolve out of that same initial customer that you acquired, because they have children and their children have children and you stick with a brand like a Nestles or a Cadbury or some of the other big candy brands that also have lots of other products and services like cereals and cigarettes and liquor, so you acquire that customer, a long life, long term, so it makes the domain name a lot more valuable in that case.

Rick: And not only that. We're talking about the people making the individual purchases, but there's also bulk purchasers and distributors and you know, if you're in that business and you're talking, I don't know, a hundred billion dollar sugar industry and you get a new distributor, who knows what the value of that distributor can be and you know, like any other business, you want to make it as easy as possible for them to find you. And it gives a certain recognition if you were to have that domain. Like I always said, I have no business owning it but that industry is asleep at the wheel. But one day they will wake up.

Monte: Yeah, they'll wake up. And hopefully we'll be there on the other end. So, tell us al little bit about T.R.A.F.F.I.C. in, well, tell us a bit about the next T.R.A.F.F.I.C. conference in Vegas and then a year from now, where do you see the venue going. I know we're going to talk about possibly moving the venue because its kind of outgrowing its britches a little bit. Give us a little idea of where the show's going in terms of a direction, of location, but bigger opportunities of where its going as a show and where you see some of the content being contributed from?

Rick: Well, in T.R.A.F.F.I.C. West 2006 will be held at the Venetian Hotel, which is a very nice hotel in Las Vegas. It'll be May 2nd to May 5th. And we expect an extraordinary event. Like I said before, we're trying to bring in the Madison Avenue crowd and the advertisers to recognize what the domains represent. And from there, we're going to have T.R.A.F.F.I.C. East 2006, which is right now tentatively scheduled, I believe, from October 15th to 19th. I'm not sure, don't mark your calendars yet. And we plan to have that in South Beach and we'd love to have it here back at the Marriott because the Marriott has just been a fabulous facility for everyone. Its relaxed, there's plenty of nooks and crannies for people to do business, its just, the food is extraordinary, but it looks like we're going to go to South Beach, which can accommodate from 450 to up to 500 people.

Monte: So the new location of T.R.A.F.F.I.C. 2006 is possibly going to be the Eden Roc, is that correct?

Rick: Yeah, we're just in the final negotiations of the contract and we expect it may be signed as early as Friday. But yeah, the Eden Roc has a lot of similar features to the Delray Marriott, and it is a Marriott property so they know the business we can bring to them and we feed everybody but it has great lobby and a great facility and we can grow to about 500 people, which would keep us there probably for two years and the facility really is fabulous. Its right on the sand and we're going to have some outside events there and it gives us much more room and a little bit of elbow room and their lobby bar is just sensational and we know its going to be received well. Like I said before, Madonna redid the premises a few years ago; they had bought the hotel and completely redid it. It's an old 1920's hotel that's been completely redone from the bottom up and its just a fabulous facility.

Monte: And what do you envision being the subject and content at the 2006, a year from now? 'Cause I know you have some visions of what that's going to be. 'Cause we talked about this time we've got some bankers in and Vegas we're going to try to get Madison Avenue in the door and talk about the direct online advertising to them, to their faces, themselves. 2006, here, a year from now, who's going to be at the show and what's the content going to revolve around?

Rick: You know, to be honest, we won't know. It's just like in Las Vegas. When we left Las Vegas it took us about two weeks to start thinking about what transpired in Vegas and to realize that the bankers were the missing link. And then it took a few more months to realize that Madison Avenue needed to be included to go to another level. And I really don't think it'll be till after Vegas that we'll know the exact direction, because look, we are in a very fast moving, changing medium and if you plan too far ahead it could be passe. So it's probably better left til figure out until maybe one or two months after the Las Vegas show is over to look back and say, okay, what did we accomplish, what still needs to be accomplished and which direction do we need to go.

Monte: Great. Well, Rick, we really appreciate your time and your contribution to the show. You've been on several times and you are a true visionary in terms of the marketplace and I said that to a number of the guests here today too that I've had on the show, because each one of these people here are visionaries. They're forward-thinkers, they've invested in virtual real estate and in areas that people thought we were all crazy for doing years ago and now look how successful people are so . . .

Rick: Well, thank you but I think the credit really goes to the attendees. They're the people that are making this happen.

Monte(?): So, in any case, we're going to wrap this show up and please join me at DomainMasters, same time, same place. Be the master of your domain. Thanks.

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