Domainer Dan Cera
Domainer Dan Cera
Monte Cahn – 9/13/2006
Dan Cera is yet another domain name visionary and internet entrepreneur emanating from Vancouver Canada. Dan began registering domain names in the late 90s believing that the then still emerging Internet would bring with it unprecedented opportunity. Understanding that domain names were a requirement of any web presence Dan recognized the analogy to real estate and began securing desirable web addresses that he felt in time could be developed into fully functioning and self supporting e-businesses.
[Commercials]
Monte: Hello everyone. Welcome to Domain Masters. This is Monte Cahn, your host. Another great week ahead of us. Tonight I have a very special guest, Dan Cera. Dan Cera started DomainTrader.ca in 2002 and was one of the first and now Canada’s only and longest operating domain name trading and brokerage site. So we’re going to have him on. We’re going to talk about the value of domain names, his vision back in the late nineties and how he’s increased his portfolio, both on .com and .ca names. The .ca market is continuing to be hot and there’s a lot of good opportunities still in that market. We’re going to also talk a little bit about the upcoming domain auction at TRAFFIC East and cover some of the other things that are going on in the industry. If you stay tuned, we’re going to do a couple commercials and be back on with Dan Cera. Stay tuned.
Monte: Hello, welcome back to Domain Masters. Again, this is Monte Cahn, your host. I’d like to introduce my first guest tonight – actually my only guest, ah, Dan Cera. He is yet another domain visionary and Internet entrepreneur emanating from Vancouver, Canada. There’s a lot of Canadian entrepreneurs out there in the domain business. Dan began registering domain names in the late 1990’s, believing that they still, uhm, that the still-emerging Internet would bring about unprecedented opportunity. Dan uses knowledge and experience he had generated in the .Com space and secured some of the earliest and best .Ca names ever available. And as I mentioned before, in 2002 Dan conceived and launched DomainTrader.ca, which is one of the first and now Canada’s longest operating domain name trading and brokerage sites. Dan, welcome to Domain Masters.
Dan: Monte, thank you for having me. It’s an honor and a privilege to be here.
Monte: Well, thank you. It’s always good to have another Canuck on the air because you guys . . . there’s a lot of great Canadian domain entrepreneurs out there. Give us a little bit of an idea how you got started in your business, in the domain business, you know, take us back as far as you want to go, but you know, what got you into the Internet, into domain names, and how that all started.
Dan: Yeah, I’d be happy to. Monte, I had a very, very strange introduction into the Internet business. Uhm, to be really honest, I’m not . . . I guess I am a little bit more so now but I was not by any stretch of the imagination a technical person or technologically gifted. I kind of was out playing ball and doing things during the school years where computers were being launched in Canada and the guys that were taking computers wore bottle glasses and buck teeth and were kind of referred to as nerds. So I was actually intimidated by technology and I didn’t get my first computer until the late nineties when my then girlfriend and now wife, Stacey, bought me a computer for my birthday. And, that was in the late 90’s, about ’97, and I turned on the computer and I’d never been on the Internet before. The first time I went on was in my home. And I was absolutely and utterly blown away by what I saw there. I just thought that this was the bomb, you know? And within, ah, within minutes of going online I thought, you know, this is what I want to do. And within a month of getting my first computer and going online for the first time, I owned about 50 domains.
Monte: Oh really?
Dan: Yeah.
Monte: So, what got you registering the first 50?
Dan: Well, you know, what happened was I got on there and I went, you know, to different sites, like NFL.com and just different, you know, maybe TV station sites and they were for the time interesting, they were good and I thought, well, how do you do this? How does this happen? I didn’t have any form of reference. I didn’t have any guidance. So, I used the tools that were available at the time, like, you know, AskJeeves and I would write in, you know, how does a guy get a website. And then it came back and it said something about, well, you needed to get a domain name. So then I stated searching on domain names. And I made the connection right away, that, you know, the basis of all Internet presence was going to be a domain name, because you had to have one in order to have a site. And as soon as I made that connection, I made the equate . . . I equated that with the real estate analogy and I thought, well, Jeez, if you can get in and get some good website addresses, then, you know, you could have some pretty good real estate on the Internet. So that’s what started it . . .
Monte: Cool. You know, that’s what happened with me back in 1996.
Dan: Yeah. Just incredible. I’m sure that my story is not unique but at the time, without as they say not having a reference group, uhm, it seemed pretty interesting and unique to me. So, I got into it and then . . .
Monte: You started with 50 domains – like, what was the first domain name that you registered? Do you remember?
Dan: Ahhh; you know, I don’t really remember and the truth of the matter is that I think in all honesty, Monte, some of my earlier registrations may not have been my strongest registrations, even though I may have had a good opportunity to get some better ones. I don’t think I was really firing it, you know, all barrels on it, you know. But, you know, from there I just . . . you know yourself, I think there’s an addiction factor involved in the domain business . . .
Monte: [laughs] Oh, that’s for sure.
Dan: . . . and from there I just kept on going and going and going. And I think that started a period of about 3 or 4 years where I literally just didn’t sleep at night. I was working full time during the day and I would come home and scour the database, you know, during the night. And I remember so many nights when my wife would come and say, you know, it’s four in the morning; you’ve got to be up in two hours – get to bed. And you know, this went on night after night after night and I thought, you know, this is crazy. But the funny thing that kind of happened was when I attended the TRAFFIC conference in Las Vegas I had lunch with (and I took my wife with me) – we had lunch with a couple of domainers from Vancouver while we were there; Chris Stuart is his name. And just out of the blue he said, you know, my wife would just come up to me and say, you know, its three in the morning, Chris; you got to get to bed. And my wife just started laughing, you know? So I think there’s a lot of shared experiences.
Monte: Oh, my wife ultimately kicked me out of the house when we started the business out of my house back in 19 . . . well, I was doing it like you were, like, on the side – in 1996 I didn’t even know my wife back then, but (in 1996) but when we became somewhat organized (and when I say organized, it was a couple people, you know, myself and two partners) and were in the third bedroom of my house and up all night, you know, trying to broker domain names and taking domain lists and entering them into computers. I mean it was literally . . . I worked 22, 23 hours, 20 hours in a day . . .
Dan: Yeah! I did that for 3 or 4 years . . .
Monte: . . . you know, you’ve got to get out of here. That’s it. She kicked us all out of the house and that’s when we finally got an office. [laughs] . . . [inaudible] office . . . [inaudible] come home.
Dan: . . . [inaudible] did, huh?
Monte: What?
Dan: It was probably the best thing she ever did.
Monte: Well, it was because I just would have kept working and working in the house. I saw her less when I was working in my own house than I did when I got, obviously, into my office. So, you know, then I had to come home, you know, to dinner and be with her and all that stuff, so then it all worked out. And now that I have kids I have to go home. [laughs] I’m still on 18 hours a day, but at least I spend some time with my family, you know, for dinner and on the weekends sometimes. [laughs]
Dan: Plus, it’s the 18 or the 24 that are probably a little better, you know, the midnight to noon aren’t the best of the 24 to be working.
Monte: Yeah, that’s true; that’s true.
Dan: . . . [inaudible] . . .
Monte: So, uhm . . .
Dan: Then my wife went from, uh, I started with 50 and then it went to 100 and then 150 and then 200 and then, you know, my wife’s coming up to me and saying, you know, how many do you have now? Like, what are you doing? Why are you spending all this money? What’s this all about? I mean, nobody really understood it. Like I said, I had no reference group. I didn’t have any domainer friends. Neither us were particularly, you know, technically gifted, as I said. So, you know, then she got on me about, you know, what is this all about? You know, I can’t believe you’re spending all this money and you know, then some guy from Chicago phoned me and said, you know, I want to buy this domain name from you and he said I’ll give you 5 grand for it. And I said to him, I’ll take it, you know, just like that.
Monte: Right.
Dan: I probably could have got more in retrospect, you know? But it was the first sale I had and then you know, a week later the check came in the mail and I showed my wife the check and then that night she said, well, what are you doing in bed? Get out there and register some more domains!
Monte: [pause] [laughs] There you go. That probably paid for, like, a Versace purse or something.
Dan: Yeah, exactly. (I’m sorry, honey.) Yeah, so I had sort of a strange start and the first couple years were, you know, really pretty quiet, you know, just mostly me by myself. And I was emailing guys and trying to buy domains from other guys. So then . . .
Monte: So, so, so . . . back in the early days you were actually, uhm, still actually registering new names and then you were actually trying to acquire names from other people at this time?
Dan: Yes, I was. Yeah. Because [inaudible] . . .
Monte: That was something I didn’t do for awhile, actually, myself.
Dan: Well, you know it’s funny. Hindsight’s obviously a 20-20, you know, thing and this business, as you well know and appreciate, has many, many, many levels and you know, sometimes the level beyond the level that you’re at isn’t readily apparent to you. But in hindsight you can see it was there all the time . . .
Monte: Yeah.
Dan: So, you know, I didn’t catch on to the drops right away. That’s where I kind of missed the level. Uhm, you know, I got that you could register new names, I got that you could buy names from other people, but it took me a little while to turn on to the drops and you know, I was looking on the ‘net and at that time there was, you know, AfterNick and it was free to join and there was SnapNames and you know, I was so unsavvy, Monte, that I just didn’t really have any trust, you know, I was one of those skeptical consumers, you know. Should I trust this site? You know, they’re going to charge me 60 bucks and so I just wasn’t really sure whether or not . . . I’d found all the right people but I just wasn’t sure if I could trust them or not. And then, you know, I guess at one point I just said, well, you know, what do I have to lose? And I went for it and then the rest is really history. So I got these domains together and I thought, well, there must be other people that want to . . . that have been doing this and I read some things in the newspaper and different magazine, etc., and so I thought in order to kind of get involved with other domainers, ah, I would start this domain name trading site. So from that DomainTrader was born and it was kind of a natural for me at the time because, as I said, I had a whole pile of domains and this was long before the advent of PPC so there was no readily discernible way of making money, at least to me; and I, to me, at that time really the money was mostly in adult and gambling and those were just a couple of areas that I, you know, personally chose not to participate in. So I was buying mainstream, sort of, when mainstream wasn’t cool. And the funny thing that happened to me, really, that kind of really started me off on all this (and, again, probably not an unusual circumstance) was that when I first started trying to register domains, I just came across domain after domain after domain that were registered to UltimateSearch and it . . . there were just . . . I was just trying to mine niches and so I just finally got to the point where I said to myself, you know, this guy seems to have a lot of names, man, and you know, if this is good enough for him, its going to be good enough for me. So, that’s basically what I did. I started mining, you know, similar niches to what he was doing (although I think I didn’t appreciate at that time just how wide of a scope . . . how wide of a niche he had) . . .
Monte: Right.
Dan: But, that’s how it started. So then I got DomainTrader together and from there . . . I did a deal with a guy on a domain, I contacted a guy who had a domain that I wanted to acquire from him and he was a really tough bargainer and we talked about it, you know, three or four or five times and then let it sit and then we went back at it, back and forth, and finally we came to deal and you know, before this guy changed his mind, as soon as he hung up the phone, I just fired the domain into his account and I waited for the domain to come back. And, it did come back . . .
Monte: When you say “fired it into his account” what do you mean?
Dan: I transferred the domain . . . we traded a domain. We traded some domains. So as soon as I got him to agree I just immediately . . . I just said, well, just tell me where to put your domains and he told me and I put them in his account and then shortly thereafter his domains came back and it turned out that the person that I was dealing with was a guy by the name of Gord Martin, who, as you may know, ran DropWizard.com . . .
Monte: Right.
Dan: And, as a result of that he contact me one day and said, you know, I really appreciate the way that you handled that. You didn’t really know who I was and you just fired that name in not knowing whether I was going to come back to you or not and I said, well, that’s how I do business. You know, this is . . . the Internet’s really a pretty small place and you know, my reputation’s important to me so as a result of that he nominated me for the Rick Schwartz’s board at eRealEstate.com and that really sort of my inauguration into the domain name community and from that time I’ve been heavily involved and have done business with and met and enjoyed some amazing lessons and good times with a lot of really, really of the very, very smartest, brightest best domain name guys in the world. It’s just been an unbelievable journey.
Monte: Right, right. And certainly when you get mixed up into that crowd, everybody’s really focused on helping each other out and making sure business transactions are done ethically, cleanly and there’s a lot of good business and conversation and tips and tricks and all kinds of stuff in the business that really helps everybody advance their business so that the whole industry moves forward. That’s the good part of those types of relationships.
Dan: Absolutely. And there’s just absolutely no denying the fact that those relationships took me to another level; there’s just absolutely no denying that. Those guys, Rick Schwartz and the members of his board literally took me to another level that I may never have been able to achieve on my own.
Monte: Right, right. Now, I know you don’t want to get specific in terms of the number of domain names that you own, but give us some kind of, like, estimate, you know, something over a thousand, over two thousand . . .
Dan: Yes. Yes, it’s in the thousands.
Monte: It’s in the thousands.
Dan: Yes.
Monte: So, you have quite a bit of money invested into your portfolio, into your business . . .
Dan: Yes.
Monte: And are you a fulltime domainer?
Dan: Yes, I am.
Monte: So, you’re making a living, monetizing, selling, trading domain names currently?
Dan: Yes.
Monte: Let’s talk about that a little bit because that’s what people are interested in hearing about . . .
Dan: Yeah.
Monte: Uhm, give us an idea of what you’ve learned from 1999 up until now on the best way to make a living if you want to become a fulltime domainer.
Dan: Well, you know, I guess really, Monte, you know, honestly I think there are many ways to the waterfall . . .
Monte: Yeah.
Dan: I think that, you know, for me as a businessman, you know, my idea of a business arrangement is that you have your exit strategy planned before you get into the business. So, I’ve built my business with a certain exit strategy in mind so the way that I might do might be different than some other people would do it.
Monte: Can you share a little bit about what that exit strategy is? Is it to emerge with something bigger? Is it to be bought out? Is it to go public? You know, what kind of vision is there out there?
Dan: Yes. Uhm, I have . . . it’s a multi-pronged approach, uhm, ah, my exit strategy is going to be to . . . uhm, I will sell a portion of my holdings (there’s no question about that) and I will develop as well a portion of my holdings and continue to grow my business through development.
Monte: Now, have you, besides DomainTrader.ca, have you developed any other domain names in your portfolio yet?
Dan: Uhm . . . you know what happened, Monte . . . uhm, not specifically. What happened was, as I mentioned, I, uhm, I didn’t come into the business with any skills whatsoever . . .
Monte: Right.
Dan: So over the course of the last two or three years, I’ve been going to night school, taking web development and different courses on different software, such as DreamWeaver and PhotoShop just to give me sort of a base to work from. Not that I’m going to be the developer of my projects but I like to have a hand in it and know what’s going on and to be able to manage things in a pinch, if you know what I mean, not necessarily build it out but be able to manage it if I need to.
Monte: That’s a good idea. So, you decided you wanted to learn a little bit about development in order to at least have some kind of structure around what you’re going to develop and who you’re going to hire and when.
Dan: Exactly. And so what I’ve done in order to kind of hone my skills as another . . . as a result of my expertise sort of in the domain name business, I’ve branched off and I do consulting for various companies. And what that entails, Monte, is a number of things. It could be the acquisition, management, maintenance and protection of domain names. So I’ll buy names for companies on the aftermarket. I’ll sell names for companies. I’ll manage their portfolio. I’ll, you know, create domain strategies. And so what I’ve done for a number of different customers of mine is I’ve acquired the domain names for them and then I will build the sites for them. So I built a couple of sites for other people. These are sort of small scale web operations. The vision for my particular company is, you know, is really actually it’s a very, very large undertaking. It’s a big, big project. So, it’s not, like I said, it’s not something that I’m going to be doing myself. But, so, in answer to your question, no, I haven’t really developed. I’ve got a number of websites going that sort of lead to different things that I’m doing but they’re nothing to really talk about. But I have done some development for other people.
Monte: Good, good. And, so one of the points you brought up is to in order to be a successful domainer was to define what you’re exit strategy is going to be . . .
Dan: Right, right, right.
Monte: . . . so yours is a multi-pronged approach . . .
Dan: Right.
Monte: . . . and, so, what’s next?
Dan: Well, you’re asking about what I would suggest to people who are wanting to do this and I think that you really have to make a decision as to what kind of business that you want to operate. There’s a lot of different opportunities out there in the PPC market. There’s more and more guys getting in all the time. There are more and more sort of publishing companies that will help you to monetize your names, so it’s important to pick a good partner. Uhm, I think, though, the basis . . . I think the approach that you take is going to dictate your success. So, what I mean by that is, right now, the PPC market I consider to be a very, very slippery slope. There’s a lot of, I think, endemic problems in the business. I think that guys are choosing to monetize typos and trademark names and this is something that I just personally don’t get involved in, because if my exit strategy is to sell, I can’t really think of any kind of self-respecting organization that’s going to want to buy into a pile of potential legal issues. And I think that to go that route is sort of very, very short-sighted. You may be able to make some quick money today but you know, I think that the long term, there’s just no real exit strategy there. I think the exit strategy could be disastrous. You know, with the way things are going with, you know, the dotser lawsuits and Microsoft Strider, I mean, they’re catching up with people and I’ve been saying for a long time on the board and elsewhere that, you know, somebody is going to be the Martha Stewart of this industry and they’re going to hang somebody out and make an example of them and in a good sense I can understand why. You know, there’s only a certain amount of money if you consider the PPC market to be a pie. There’s a certain amount of money in that pie and I’m competing for that. Right now I’m competing with guys who are taking shortcuts, who are, you know, monetizing typos and monetizing trademarks and that’s their business. It’s just that I’m not sure that those are the cleanest, purist, nicest forms of traffic and if I’m competing with those, they’re really taking money out of my pocket. So, you know, my advice to people would be, you know, have an ethical approach, spend your money on good names. You know, I was looking at DNJournal today, at the sales report, and I noticed that somebody bought a typo of Yellow Pages for $32,000.
Monte: Yep.
Dan: Now, I mean . . . I mean . . . I don’t claim to be, you know, the definitive source for the domain name industry but it would be a real dark day before I spent $32,000 on a typo of a corporation that could walk me around the block backwards 32 times before I even knew what day it was.
Monte: Right. And even announce that type of a sale is probably pretty risky anyway. [laughs]
Dan: Right.
Monte: I’m not sure why anyone would want to publicize that. You know, on the other hand, we sold . . . we helped with the sale of the mistype of Mortgage.com, which is a mistype of a generic term . . .
Dan: That’s a little different!
Monte: That’s a little bit different.
Dan: Yeah!
Monte: And it went for over $240,000 and its monetizing fantastic, you know, the buyer is very happy with the purchase.
Dan: Yeah, yeah. That’s a different story, you know. I think in the generic . . . in the generic world, its pretty much anything goes.
Monte: Right.
Dan: But, you know, to buy a typo of Microsoft and you know, somehow, you know, I’ve heard arguments saying . . .
Monte: Even though you might end up directing traffic to Microsoft in that PPC play, by the way, which Microsoft should actually like, but you’re just getting paid for it, but it’s still not a good smart way to spend your money or take the risk of.
Dan: Well, I’ll tell you what. I’ve heard that argument before that Microsoft might get the traffic and if somebody could tell me, definitively and prove to me, that Microsoft would get the traffic, not most of it but 100% of it, then there might be something to be said about it. But you know the truth of the matter is when I see that the PPC business is a slippery slope, it . . . you know yourself that, uhm, the best use of a trademark name is often an infringing use. I mean, that’s the best way to monetize an infringing domain.
Monte: Right.
Dan: Uhm, that just happens to be the way that it is. So, there’s a huge disconnect, I think, between the UDRP proceedings and the legal proceedings around trademark infringement. So, for example, there’s some landmark decisions with respect to Google selling Geico keywords, right? to their competitors, and that was seen as being okay. But if a domainer had a domain name that showed a link to a competitor of Geico, they would lose that name . . .
Monte: Right.
Dan: And to me there’s a major, major disconnect there. And I think that, uhm, you know, the UDRP and the WICO guys, they already have way too much power. When you take a look at the balance of the decisions, they’re mostly going in favor of the complainant and some of these are just horrendously awful decisions. For example, Barcelona.com, which I don’t know whether you’re up on that one but the panelists in their infinite wisdom just decided that the name would be better served, it would be in the public interest, that the City of Barcelona had a more superior interest in it and you know, the last time I checked the rules for proceedings under the dispute mechanism, it didn’t really have anything to say about who’s interests should be served.
Monte: Yeah, actually, the rules are the three things you have to prove in a WICO case, an arbitration form, is that you have to show that the registration was malicious in nature; that it’s confusingly similar to a brand or mark; and that you as a registrant have absolutely no right to own it.
Dan: Exactly.
Monte: And, in neither of those arguments was that found in that particular Barcelona case. However, there’s been several cases that have gone to appeal and actually overturned and actually turned out to be big winners after they were ruled that way.
Dan: Yeah; unfortunately, you know, as a domainer . . .
Monte: As a matter of fact, the . . . Shawn Piffel pointed out that the court overruled the Barcelona case and they ended up winning it. So the original registrant got to keep the name.
Dan: Well, that’s good, and I’m glad that he did. Unfortunately, it probably cost him a whole lot of cash that he needlessly had to spend because of the abuse of the process. So, what I’m saying is . . .
Monte: But, you know what else happened in that process is that now a precedence is established in that particular type of domain name and it became very valuable so the money he spent went to good use for everybody in the business, including you and I, and all of our associates and everything because one can’t forbid someone else to register a domain name such as a Barcelona or a city name, because no one technically owns it.
Dan: Well, I hope you’re right about that because jurisprudence hasn’t sort of been unanimously observed in the decisions that I monitor. I think that one day they’re as likely to go left as the next day they’re likely to go right.
Monte: Yeah.
Dan: But that certainly should serve to be a precedent because it’s deserving to be a precedent of a complete abuse of the system. And, you know, I’m actually fighting a case right now where a corporation – it’s a proper surname domain and you may be familiar with the Shell.com decision as well; that was another one that went sideways on the guy. I have a surname domain and the company that’s coming after me certainly has a trademark on that name; however, my use has been really non-infringing and you know, they’re basically using all their might to try to leverage this domain from me. And you know, I’m . . . I plan on fighting it just on the principle of the thing, because it’s just wrong. These guys should not have second chances to come back, you know, 15 years later and say, oh, you know, we were sleeping; when the time came to register the name we had every opportunity to do it and didn’t, but now that you did, we want it. And I take umbrage to that.
Monte: Yeah. Yeah, that’s a major issue in our industry and we’re going to talk a little bit more about that and also your view on domain valuations after we get back from our commercial. We’re going to take a short commercial break and be back on with Dan Cera. Okay? So stay tuned.
[Commercials]
Monte: Hello, welcome back to Domain Masters and thanks for staying tuned during the commercial break. I’m on with Dan Cera. He’s the owner and operator of DomainTrader.ca; owns several thousand domain names and we’re just talking about how Dan’s early vision and now current vision has helped his business be successful in the domain business. He’s a full time domainer and we were just talking about some of the legal ramifications about some of the large corporations that are trying to strong-arm domainers to give back the domain names when they had the opportunity to register them and protect trademarks and trying to use what we call reverse hijacking and we’ve had several sessions and seminars about them at TRAFFIC conferences about this tactic or this way of large corporations trying to take domain names away from domainers by using more money and trying to say they have protected rights to those trademarks, so, you were talking about this particular case – are you able to say which name you’re in a dispute over?
Dan: Uhm, you know, actually I prefer not to. What I’m planning on doing, Monte, is I’m actually planning on launching a blog in the very near future. It’s going to resolve to DanCera.com and also to ThatsMyOpinion.com. Those are two names that I reserved for sort of social uses that I’m going to use as a blog to talk about the domain industry and I’m going to detail and highlight the entire case on my blog, including posting the letters and the correspondence and communication between the law firms. And I think its going to shed some really bright light on some of the tactics that are being employed by some of these companies.
Monte: Now, who are you using? Are you using any of the attorneys that we know and love in our industry to help you with your case or are you using somebody there local?
Dan: Well, I always consult with John Berryhill; he’s the guy that to me is the Dali Lama of domains and he would be the guy that I would refer to, you know, if put in the pinch; he’d be the guy.
Monte: Right, right.
Dan: I’ve talked to him about the matter and uhm, he’s the best; I mean, there’s no question about that.
Monte: So, currently, you’re responding yourself in the . . . is it a WIPO case or is it a trademark suit?
Dan: Ah, well, they haven’t decided which way they’re going to go yet, you know. They haven’t really laid it out on the table.
Monte: So, it’s just a cease-and-desist stage?
Dan: Oh, yeah, yeah, yeah.
Monte: Okay, okay.
Dan: Yeah, yeah. We’re a little beyond that but not yet to the process.
Monte: Okay, got it, got it, got it. So let’s talk a little bit about domain valuations . . .
Dan: Yeah, before we do, there’s just one other thing that I would like to say, uhm, that I think is an important that hasn’t really been discussed much that I’ve heard of . . . you know, the business is proliferating, right? And, so, knowledge is proliferating and the guys that were asleep at the wheel are now starting to clue in as to what’s going on, and I think that one of the slippery slopes that I was referring to is in the PPC use a lot of . . . or certain, certain PPC companies offer a search functionality that results in optimization and I think that some of these corporations are actually using the technology to create infringement where infringement was not intended or previously hadn’t existed. Do you follow me?
Monte: Yes, but lets lay out a couple of examples of this.
Dan: Well, uhm, let’s take the Geico, for example. Let’s say I . . . well, what would be a good way of explaining it without actually revealing my case? Uhm, lets say you have . . . you know, with the nature of the trademark system, the potential for infringement exists in a lot of domains. It doesn’t really have to be implicit or you know, obvious; there’s a lot of trademarks out there. So the potential for the creation of links which could be construed as infringing exists.
Monte: Right.
Dan: Right?
Monte: Right.
Dan: So I’m saying that the companies that are trying to fight domainers are becoming aware of this and are creating that by using the search bar on those PPC pages to optimize the page to show links to their competitors. So, I’ll give you an example in this case, right? This is what happened to me. I mean, I’m . . . uh . . . I consider myself to be a professional; I consider myself to have certain obligations. So when I bought the name, I checked the trademark databases, which is what I usually do.
Monte: Right.
Dan: So, based on what I’d find in the trademark database, that dictates to me how I can use the domain name. So what I did was . . .
Monte: So, you don’t necessarily not buy if you see a trademark; it’s how you’re going to use the name . . .
Dan: Yeah.
Monte: . . . versus the term that’s the trademark, so that you can defend your rights to own it.
Dan: Well, absolutely, because trademarks don’t . . . the same name can be trademarked to 50 people . . .
Monte: Exactly.
Dan: So there’s not an exclusive use on the trademark; its usually in relation to a good or service; ah, you know, geographically, but more than one person can own the same trademark for, say, Delta – Delta Airlines, Delta Faucets, Delta Powertools, blah, blah, blah.
Monte: Exactly. Same with generic terms like Orange and you know, there’s like a hundred different trademarks with the use of the world “orange” in it.
Dan: Right. So now you have to kind of safeguard yourself from uses that might infringe on any one of those hundred. So what I do is I optimize my page so that it will not infringe; it will not show any links to any products or services that are connected with that trademark. Now, the only thing that I missed (and I’m sure others will miss it if I missed it) is that what they did was, they literally pounded that search function – I mean, the logs are there; you can see how many times the domain was landed, how many times it was searched – and they just pounded that search function until it actually showed a link to their competitor. As soon as it showed a link to their competitor, they took a picture of the site and sent the CND. So, you know, I mean, I acknowledged immediately that there was a problem, that it was short in duration, that it was unintended. I took immediate corrective action to remove that and to block competitor’s links and then what they did was they said that my changing the site subsequent to receipt of the CND was tantamount to bad faith . . .
Monte: Because you showed that it verified the fact that it was going to the wrong place and therefore you made a change.
Dan: Oh, yeah – you changed it to cover it up. So, you know, I mean, uhm, here I am as a law abiding citizen. I get a notice, you’re infringing on me, you got to get off my foot; I jump off the foot and take corrective action and they say, well, you got off the foot to cover up your wrongdoing. You know. So you can’t really win, you know. So it really boils down to the principals and the principles of law and what I’m hoping that if they decide . . . the problem that the trademark holder has is, you know, if they take a Federal court action, well, then they can get damages but not the domain name. And if they take a URDP route or a dispute resolution route, they get the name but no damages.
Monte: Right.
Dan: But I think in this instance, this is really an issue of law, a fact of law, which means they have to go through the Federal court action, if they really want to have any justice; you know, if that’s what they’re seeking. But the truth of the matter is that in these situations, I did 10 minutes work and I found 15 or 20 blatantly predatorial uses of their trademark. So the question I have, why aren’t these big corporations going after the guys who are blatantly bastardizing their brand; instead, they’re going after someone like me who showed a link once in 5 years. And the truth of the matter is that they don’t care about the infringement; they really just want the name but they don’t want to pay for it.
Monte: Right.
Dan: And, you know, that’s . . . that’s just not how business works in my mind.
Monte: Right, right. I mean, that’s a good point and you know, its no . . . there’s another side of this, obviously, that people know about and that is that competitors are purposely buying the other competitors keywords in PPC and other types of online advertising to show their . . . this is beyond going just with the domain name; this is buying keywords in the domain name, so then you don’t have control of where the domain’s going even if you own the site, sometimes, if you own the domain, because a competitor has bought a keyword of another competitor in the use of the word “hotel” for example. A case came to our attention that was interesting about 6 months ago; it was a Best Western – Best Western got mad at Countrywide or something, Homeloan site or, no, Best Western, uhm, no, County Inn site because they bought the Best Western keyword and Best Western hotels were showing up whenever they typed in Countrywide or vice versa and so . . .
Dan: Yeah. Like I said, there’s a major disconnect between the processes to resolve these issues.
Monte: Right. And [inaudible] the issue resides back with the aggregator of the keyword system (which was Google at the time) and so they’re allowing keyword buys to be bought by companies that are competitive, so therefore, if you have the word hotel and you have hotel associated with one of the famous hotel brands and your pulling up their competitor, obviously the domainer or the publisher has no way to control that.
Dan: And, you know, what I’m saying is if it’s okay for Google to do it, then it should be okay for a domainer to do it, because at the end, most of that traffics coming back through the Google or Yahoo! networks anyways, right?
Monte: Right. And somebody’s paying for it.
Dan: Yeah. And so [inaudible] . . .
Monte: And somebody’s paying for it; you’re directing traffic to a legitimate source and somebody’s paying for it.
Dan: Yes. Exactly.
Monte: Right.
Dan: Anyways, back to the valuations. I think that that’s a very interesting topic and I think one that’s, you know, certainly this is one not by any means a scientific business as of yet. I think, you know, prior to the advent of PPC, it was basically all about potential or desire and now with the advent of PPC it’s become a multiple of earnings. And I personally do not subscribe to that notion and I would never sell my portfolio for a multiple of earnings, unless that multiple was astronomic. And the reason why I say that is because if people adopt that, you know, they’re really shorting themselves, because, you know, people are on different revenue splits, so if I have a name that makes me $500 a month and I’m on a 50% revenue share, that means the domain name really makes a thousand a month and my partner is making $500 and I’m making $500. So if I go the multiple, do I go the multiple of the $500 or do I go the multiple of $1,000 and you know, the truth of the matter is that the traffic value, you know, the revenue being generated from my portfolio have just, you know, gone through the roof over the course of the last even couple of years and I anticipate that it’s probably going to get even better and if we eliminate some of the stale traffic out of the system, it can only improve the bottom line for somebody like me. So I’m not big on the multiple of revenues. I think that basically what you have, especially when you’ve attacked a certain niche and you have the domain packages that I have, never mind that each domain can only be owned by one person. If you have somebody that has the foresight to put together a vertical niche of domains that are in and of themselves, create a huge business opportunity, then, that’s a real asset. Its not goodwill, it’s a real asset. So you’ve got the revenue, you’ve got the asset and you’ve got the good will. So I think the truth is, is that the jury’s not out on the valuation. I think that a lot of guys, you know, if your slipping away from the PPC revenue as a method of valuation, guys are going on sales, you know, well this company bought that company’s domains and they paid X number of dollars per domain and using that as a guideline. And I think that that is also a farce. I think that the guys that are out there that are aggregating and buying, consolidating, picking up names, uhm, they’re kind of putting the notion out that they really have enough and they don’t want to buy anymore but the truth is they do want to buy more and I think that the packages that are being purchased are stacked so that, you know, there’s a number of names that they’re really after but they get the seller to throw in a couple hundred other names that they really have no value and they have no interest in but it brings the cost per domain down . . .
Monte: Down! Right.
Dan: And then all of a sudden, it looks like the guy’s paying $2,500 a name when he was really after about 10 names that he was really willing to pay, you know, 10 grand or 15 or 20 grand each for.
Monte: Right . . .
Dan: So, I don’t think . . .
Monte: So I think you’re point is valid but if you use it in combination with all the other points – as you know, Dan, we’ve been doing appraisals . . .
Dan: Yes.
Monte: Well, since 1998. We actually invented the appraisal of the entire appraisal system for the industry back then. And what we do now . . . back then it was, like, six things we measured – it was, you know, name length, is it a .Com, a .Net, a .Org, how brandable is it, does have, you know, dictionary meaning, you know, those types of basic stuff. Well, now, with the focus on page length, link popularity, we have a comparable sales database of 32,000 domain names now, so now there’s actually a way to see comps, you know, in a system, over the past couple of years; uhm, PPC revenue, keyword relevance, how many times is the keyword in the entire zone file, you know, how many kinds of names like it have been registered out of any type of domain name registered in the zone file, those types of things. And you put all those things together with, you know, special algorithms and then you take the human eye, you know, someone who happens to have been doing this a long time (me, in our company) and you look at it and just like you can’t appraise a piece of property by a computer, you know, like a house. Like, you know, no one can come over to your house, no one can say, you know, okay, your house is worth, without taking a look at it. Because they don’t know if, you know, you just had that roof replaced or how old that air conditioner really is . . .
Dan: Right.
Monte: . . . you know, did you do a kitchen add on, which adds $50,000 of equity value in your house and that kind of stuff. That’s were the physical eyes come in and say, hey, I’m an experienced appraiser, I’ve been doing this for a long time, you know, here’s where the market is, here’s the recent sales, okay, here’s the current value – here’s the current value as of today. You can’t tell me what it’s going to be tomorrow. You need to get to at least some kind of accuracy than where you were, of course, five to ten years ago; it was much harder to do.
Dan: You know, and, you know, like, you’re a pro. I mean, this is what you do. So obviously you would be much more adept at gauging the value over someone like me because as you’ve mentioned you’ve got 32,000 experiences and this database and algorithms to assist you and you know, the truth of the matter is that I’m not so concerned about the values, you know, that’s not the focus of my business. So I believe that I have something of value.
Monte: Yes.
Dan: I believe that it has value by virtue of the fact that it pays my rent every month. But apart from that I believe there’s some intrinsic and inherent value and future value. But I haven’t focused on it. I just think that the methodologies that are being employed, not so much by guys like Moniker.com who are experts at it, but by the guys in the field are probably not as sophisticated or near as sophisticated as what you’re referring to.
Monte: Yes. Yeah, I agree with that. I agree with that. And, of course, there’s a lot of personal feelings about the time and the energy and the money that you’ve invested in (again, I’m not only speaking with you personally, you know) . . .
Dan: Yeah!
Monte: As a domainer, any domainer that’s out there, anyone that runs an online business, you have time and energy and you remember all those nights that you didn’t get to sleep and the fights you had with your wives and your spouses because you were up all night not spending time with the family and how many times you put your marriage at risk and you know, didn’t say hello to your kids – its emotionally wrapped into your value. But that’s the type of stuff you need to separate yourself from because its not part of what the buyer’s going to put your value on.
Dan: Yeah. I guess what I’m saying is . . . what I’m saying is that I had an offer for my portfolio and the offer was 8 times revenue, which I felt, you know, based on at the time, I thought that was a competitive offer. Okay? I think it was probably from a multiple perspective, it was probably a decent, fair offer. But, you know, from my perspective, it wasn’t enough. It wasn’t enough because, not just the emotional part of spending all those nights getting them, it’s that what I have can not be replaced. We’re not talking about one or two good names. We’re talking about a vertical niche that is ready to roll and you know, with major implications. And that can not be replicated. You know. If you get one good name or two good names or three good names, you can make a career on that. If you have a whole whack of them that work together, that’s another level I think.
Monte: Yeah.
Dan: I think . . .
Monte: Yeah, yeah, yeah; if you have niche like that, a niche holding, then you can dominate a certain market segment because you have that niche.
Dan: Exactly.
Monte: You know, you . . .
Dan: You can become a force.
Monte: There’s a whole bunch of different ways you can look at it. When you have a niche and you dominate the niche to do that; and also, in a couple industries, there’s only a couple top names in particular industries. Like, uh, you know, one example, you were speaking about Rick Schwartz earlier. He owns the name Candy.com. So, Candy.com happens to be the very top name – there is no second to it – in the confections industry.
Dan: That’s the one.
Monte: Nobody types in confections; “candy” is it, that’s the top name.
Dan: That’s right.
Monte: However, when you move over to finance or stock markets or mortgage and stuff – then you have all these top names: you have realestate.com and then you have property and then you mortgage and then you have loans and you have all these different things that anyone can say are all the top names in those particular industries, but there’s five or ten or fifteen and sometimes there’s twenty in this particular market. So, you look at these different niches and then you compare and well, of course, the mortgage business is a huge market; well, guess how big the confections business is. It’s billions and billions of dollars. It’s a huge multi-billion dollar industry. As a matter of fact, it’s the only industry where customers are acquired at very early ages (when you’re children and kids) and you provide candy and then other food products, so you’ve got Phillip-Morris and Cadbury and Nestle and Hershey and all these big conglomerate companies that throw cigarettes and tobacco and liquor and cereal and all this stuff down your throat for years and then your generations and your kids’ kids eat the same damn candy.
Dan: Yeah, that’s a killer name and that’s, you know, you can’t even begin to talk about a multiple that covers that potential, right?
Monte: Right, right. [inaudible] I tried to market for them last year and you know, positioning the domain name for three to five million dollars to Hershey and Nestle and Cadbury; they, like, laughed at it. And I’m, like, you guys don’t even have a clue yet; you just wait. [laughs]
Dan: Oh, yeah.
Monte: I mean, to own Candy, you know, to own that property, you now have just defeated your competition from them owning that particular market word and all that type in traffic that people are going to, to buy candy.
Dan: You know, that’s the thing, is that the industries are still very, very far behind. You know, a lot of these guys think the best way to promote their site is to go to, you know, go to Google and get an ad or buy an ad word or do PPC through Google. And I’m not saying that’s not the best way; I’m saying it’s certainly not the only way and it’s subject to, you know, your competitor clicking on your ad and you have no control over the click-fraud controls that Google puts in place. And we know that they’ve offered some pretty big settlements in the past, like the $90 million one comes to mind and I think the $90 million covers what they made, probably, in about a day and a half. But anyways, you know, one of the things that I’m doing and I’ve been trying more and more to do is to sell my traffic direct to guys who have been previously been using Google Ad Words or Google Pay-Per-Click and I’m . . .
Monte: And, have you been successful in selling that?
Dan: I have, and you know, the reason that I have is because I show them they’re already paying me anyway, because I can show them that on my PPC page their ad is already there.
Monte: Right, right. And that’s a very good point, because you can bypass the middleman . . .
Dan: Yeah!
Monte: . . . and you can make more money and then save them money in the meantime.
Dan: Exactly! And then you don’t have to worry about click-fraud, you don’t have to worry about how many clicks, you don’t have to worry about anything. You get, you know, we negotiate the rate and all the traffic is yours, and I think it’s a real win-win situation and I really foresee the market, as opposed to going to . . . a lot of people are calling for a pay-per-acquisition model and I think that really the way to go is to go direct to the consumer or direct to the advertiser and say, we have targeted traffic for your business and then you lay it out on the table as to how, why and you know, give them some education as to how it all works and what their opportunities and options are. Because a lot of them don’t see their options or opportunities besides Google or Yahoo! Publisher Networks, right?
Monte: Right.
Dan: And once you alert them to it and show them, look, you’re already on my pages, I’ll give you this traffic cheaper than Google’s giving it to you and, you know, it’s a win-win situation. And, yeah, I’ve had a lot of success with it and I’m trying to concentrate more of my efforts in that regard.
Monte: Well, great. Well, as we’re winding up, a couple of things we like to accomplish on this show and you’ve been very insightful and forthright and where your positions are on a lot of the legal issues and how you got started in the business. Give us some good tips and tricks on what one should be successful at, you know, how one can be successful at their main business. I mean, I think the traffic direct sale side is actually one of them that a lot of people are actually afraid to do or don’t know how to go about doing it, how to do the research, how to get to the right contact. But what we like to do is try to share a couple things that maybe people don’t even know about yet that can really help their business sales. Can you share a couple things with us that can really help the domainer, the webmaster, the SEO guy that’s listening to the show, be better at what they do from your years of experience, what you’ve learned that maybe someone else doesn’t know about?
Dan: Ah, well, I wish I knew things that other people didn’t know; that would really be powerful. I’m sure that I can lay claim to that. But my advice would be to, you know, think long-term, do your homework. The truth of the matter is that the value of the visitor is really equated to the value of sale that could be created from that visitor. So, if a guy’s selling widgets for a dollar, the visitor’s not that powerful. If the guy’s selling mortgages and stands to make a hundred grand from a mortgage sale, that’s a pretty powerful visitor for that guy. So concentrate on market’s where there’s room to make money. Think long term. Don’t buy lousy domains. Do your homework and buy good domains. I think one of the things . . . you know, there’s different philosophies. Guys would rather buy 100 shitty names for 10 bucks each as opposed to one great name for a thousand or one good name for a thousand. Uhm, my experience is, uhm, you know, what I said before – it’s not a scientific business. It’s not empirically provable that if you have great link pop and all that, you’re going to get traffic. I’ve had names that I thought would be good that didn’t do well and I’ve had names that I thought would be bad that did well. Uhm, so buy something that you can invest in and build long term. I think my approach is this: when I started in this business, like I said, there was no PPC. So I had ideas for the future and I think that if and when the PPC dies, I’ll still have ideas for the future that I can build upon. I’m not saying that it will die, but in the event it changes, I still have something I can build out. If you got typos and other stuff, those are dead. So think of long term; buy . . . I generally like to buy better quality names, spend a little bit more money. You know what you’re getting. Its pretty much you can verify what’s been happening with the domain in the past that gives you a better guide for the future as opposed to just, you know, plucking something out of the drops. Uhm, you know, it’s a gamble and I guess, depending on the price, it might be worth taking a few gambles here and there but uhm, I think, you know, the utilities are there. I think there’s a network of domainers out there. I think that there’s more and more information out there. You can reach out, you can ask for help. I personally, I address all my emails, no matter how ridiculous it is. Uhm you know, there are people out there who are willing to share what they know and you know, I welcome anybody to call on me if they have questions; there’s no question about that. I mean, I’ve had people help me get to where I am so I think that I owe it to the community to give back.
Monte: Great; great. Well, that’s some good points and you know, one of the things that you expressed earlier is getting out into the forums, going to the conferences, meeting the people that you’re doing business with, interacting with them, uhm, lots and lots of deals and lots and lots of relationships, very valuable relationships, have been struck at the TRAFFIC conferences, at the Domain Roundtable conferences. I’m seeing it happen now at the SES and the AdTech's and all of these other places where domainers are starting to come out and be a part of the community and you know, it’s a known fact that direct navigation is now 10% to 15% of total revenue generated by Google and Yahoo! in their search business and so its very significant, a very significant business and like you said, its better to be clean and have clean traffic and if you’re on the PPC side, and also, if its direct navigation is that valuable to them, look how valuable it is directly to the advertiser, who’s paying for it.
Dan: Absolutely. Absolutely. There’s no question about it.
Monte: So, that . . . those are very powerful numbers and of course, going direct is a lot harder because you have to go to the individual players but you get a couple good, direct partners that you know you have definite traffic for, you can make, you know, a lot of money.
Dan: You know, I think, basically, it’s just like any other sales, Monte. If you can show people value, if you can show them how you can take their business to a new level, save them money and create a new clientele for them, they’re interested. That’s what I know. That’s what I can tell you. That’s my experience. I’ve shown people how they can be successful, you know, and basically what I’ve done with my clients, I tell them, you know, it’s a money back guarantee. If you’re not totally happy with what you get, it’s a money-back guarantee. I’ve never had anybody ask me for the money back. Never.
Monte: That’s great. That’s great. Well, I’ve just posted your website and your contact information, just like you said, in the chat room. So, ah, it’s DomainTrader.ca and you can contact Dan at info@domaintrader.ca, if you have any questions or want to find ways that you can advance your business or do some deals and build a . . .
Dan: You want to buy domains, give me a call.
Monte: Yeah, yeah. Yeah, definitely. And I guess I’m going to see you at TRAFFIC in Miami, yeah?
Dan: I’m not sure if I’m going to make it this year, Monte.
Monte: Oh, boy.
Dan: I’m not if I’m going to make it. I may. It’s going to be a last minute issue.
Monte: Okay. Well, I hope to see you there, anyway, where as you know, we’re going to be having a huge domain auction, a live auction . . .
Dan: Oh, that’s exciting . . .
Monte: . . . with a silent auction running at the same time. Our goal is to sell over $5 million worth of domain names at the live auction and we have a live auctioneer coming on board for the event on the 27th of October. If anybody’s interested in attending the TRAFFIC conference, go to TargetedTraffic.com, sign up, it’s worth every penny that you spend to go there to meet your fellow domainers and to get into the domain space as a newbie, even, to get involved; go there and apply for an application and an invitation – its an invite-only conference – but there’s going to be between 750 and 1,000 people going this time, so its going to be huge.
Dan: I listened to the auction the last time; I wasn’t at the last conference either. And I listened to the auction and if there was ever anything that made me want to be there, it was that auction. I mean, that was absolutely, absolutely spine-tingling. I so enjoyed it and I was so verclempt that I wasn’t there. I mean, it was unbelievable. What a fun time that was.
Monte: Yeah, yeah. And it’ll be broadcasted live here at WebMasterRadio.fm and we hope to have a live web cast. It’s going to be taped and simulcast and but the only way to really experience it, obviously, there in person and you can only place bids if you’re there in person and bid on domain names. But if anybody’s interested in selling any domain names, you don’t have to be there physically to sell. If you have some really good, premium names, email me, Monte@Moniker.com and we’ll take your domain names under consideration and ultimately the people at the show, the bidders who will be participating in the auction, decide what names go up for auction that day, anyway, and so they’ll be able to select, uh, provide the interest level of each domain name; those will be the domain names that will we’ll be eventually putting up for the live sale.
So with that, Dan, I really appreciate your time tonight and I really appreciate the fact that you’ve reached out and wanted to do the show and I’m very happy that you did because I think you’re experience and your insight and many of the key points that you made tonight will be valuable to other people listening and other domainers and we wish you the best of luck.
Dan: Thank you. I very, very much enjoyed it and I very much appreciate the opportunity to be on your show. It was a pleasure.
Monte: Oh, thank you very much.
Dan: Thank you, Monte.
Monte: Okay, take care and have a good rest of the weekend.
Dan: All the best.
Monte: Uh, week, I guess [laughs].
Dan: [laughs]
Monte: Take care, Dan.
Dan: Good night.
Monte: Good night. Well, with that I’d like to thank Dan Cera again for being my guest tonight. A very well known and active domainer and you can chat with Dan if you’re a member of the Targeted Traffic Forum, which is Rick Schwartz’s forum and it’s a very active forum also, especially all geared around domain names and making money on the domain industry. And of course, emailing him and going to his website.
With that, I will end this week’s show. We’ll be back next week, live again on Domain Masters and have a couple exciting guests. I think what we’re going to do next week is get back to addressing some of the legal issues that are going on in the industry and talk of possibly about the consideration for the new .biz and .us contract through a new level, which is a great controversy right and so we’re going to talk a little bit about that. Also, some exciting news is that we’re going to be, uhm, we’re [inaudible] .mobi names who, we’ve had the .Mobi folks on a couple times; they were just in the offices last week and sunrise is ending, I guess, on the 22nd of September, so if you guys have any trademark that you want to protect, you definitely want to come to Moniker.com and get your trademark sunrise application in and get your domain name protected in the .Mobi space. Land rush starts October 10th I believe at 10 a.m. and if you go to Moniker.com, you can pre-register your domain names now for any names you want to try to catch in the land rush before its open to the general public. And so you want to get on board, get your names submitted there and we’re going to actually be auctioning off at the live auction at the TRAFFIC conference 10 to 20 of the top .Mobi names in the entire industry – things like Sex.mobi, Zoo.mobi, Sports.mobi, Weather.mobi, those types of things. They’ve never been offered to anyone before and we’re going to be actually selling them at the live auction at TRAFFIC and it’s going to be a great, great event, just for those .Mobi names that are going to be out on the market for the very first times of their lives. With that, I will leave you all go. Have a great week and Be the master of your domain. Take care.
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