Monte checks in with the folks at DOMAINfest
01/30/2007 - Monte Cahn
DOMAINfest was created for domainers with an understanding of their goals, and includes a strong session track examining some of the most important issues to the industry today, to be covered through in depth networking sessions, panel discussions, and training labs. Great minds connect and explore complex issues toward the ultimate betterment of the industry.
[Commercials]
Monte: Hey, everyone, welcome to another week of Domain Masters. I’m back from a long trip. We were at back-to-back conference at InterNext and then the Affiliate Summit. Last week’s show was actually a great show because my session or seminar at Affiliate Summit about domaining and address bar driven traffic was completely recorded by the folks at WebMasterRadio.fm, and its about an hour and ten minutes or so long and it was a . . . I did a full presentation in front of about, I don’t know, about 100 people or so (maybe it was more than a hundred people in the room). And then there was questions and answers and we went over all kinds of great points about what’s going on in the domain industry, why domain name and type in traffic is so valuable; the fact that it makes up so much of Yahoo! and Google’s advertising revenue and some great pointers and tips on how to address corporate brand coverage on the Internet and monetize domains and doing affiliate programs and all kinds of stuff. So, if you haven’t listened to that show, it’s archived on WebMasterRadio.fm and also Moniker.com. Please go get it down and I’m sure you’ll learn a lot. You can iPod it or podcast it and listen to it on an airplane or on your way somewhere, because it’s pretty valuable information.
Tonight, we’re going to check in with the folks at DOMAINfest. DOMAINfest is a conference being put on by DomainSponsor and Oversee.net and there’s a lot of people out in L.A. and including John Morriella, one of our senior account execs and we’re going to be talking to the folks that are running Oversee and DomainSponsor and the DOMAINfest event – Ron Sheridan and Jeff Kupietzky. So we’re going to take a commercial break and get on the phone with Ron Sheridan and Jeff when we get back, and learn about DOMAINfest, what’s going on there, and what’s going on with Oversee these days. Stay tuned.
[Commercials]
Monte: Hello, folks. Welcome back to Domain Masters. I hear Mr. Ron Sheridan on the other end of the phone – are you on, Ron?
Ron: I am here, Ron. How are you?
Monte: Hey, Ron; how’s everything going over there?
Ron: Things are going great; things are going really great.
Monte: Well, for those of you who are listening, as I mentioned, we’re going to check in with the folks at DOMAINfest. It’s an event that was put together by the folks at DomainSponsor and Oversee.net and there’s a lot of domainers out there and also corporate folks and so we wanted to check in with Ron Sheridan and I guess, Jeff Kupietzky is going to be joining us as well?
Ron: That’s correct.
Monte: Okay. Well, Ron, why don’t you give us a little bit of a . . . first of all, I know you were on the show, I guess it was several months ago, but maybe give us a little bit of a background on your roll there with Oversee and DomainSponsor and what’s been going on with the company; and then tell us a little bit about the event.
Ron: Alright. Well, my role at DomainSponsor is Director of Business Development; Lawence Ng is the CEO of Oversee.net and he and I put the business together back in the beginning and been pretty much in charge of writing the customer side of the business since then. And, Oversee.net has other business interests, which include online advertising and we also run LiveDigital.com, which is a kind of a MySpace-type, You-Tube/MySpace site. And we have 160 employees and growing rapidly.
Monte: Great, great. And tell us a little bit about DOMAINfest, why it was put together and how and kind of the things that are going to be covered over there.
Ron: Well, the genesis of DOMAINfest was (I need a cough button there), the genesis goes back to an invitation we received from some domainers who wanted to hold an event. They were calling in DOMAINfest up in Seattle; that was back in ’05. And we did everything we could to help provide entertainment or meals and whatever we could, including a little logistics support. And it went so well, I was so impressed with it that I encouraged the team involved, [inaudible], Joe Schmidt; and I encouraged him to contact us if they thought they’d want to do another one. And one thing led to another and what we discovered from talking to publishers was that they needed us to help with the planning and so forth; and also the recruitment of domainers to attend, because it’s a lot of work to communicate to everybody where its going to be and get all the logistics set up. So we took that on ourselves and we did an event in concert with some domainers in Europe, DOMAINfest in Barcelona. And that was a number of months back. And we were so happy with that, again, small regional event; not a big event. And then we did one in Los Angeles several months back that we had over a hundred people attending and, we thought, this is it. So we kept asking questions and looking for feedback and asking domainers what they were interested in. We believe in the idea of giving domainers the opportunity to get together, share ideas, network, maybe do deals with each other – everybody wins in the end. And so, we thought that’s a good place for us to be and made it clear to everybody involved that if they wanted to have another event, let us know. And, the net of it is we realized that there was a need for a large-scale event; a global event, a worldwide event. So we decided to do one event a year and that’s what we’re talking about now, it’s where we’re at. We’re at DOMAINfest Global, you know, Version I, if you will. And we’ve got over 300 paid attendees and the number’s climbing as we speak. There’s going to be over 400 people at this event before its over with, including exhibitors, speakers and of course, the ever-famous DomainSponsor staff.
Monte: Wow, that sounds like a great event. Especially on Super Bowl weekend; it’s probably not an easy thing to pull off.
Ron: Super Bowl, indeed. So I heard you were stuck, up in Vegas for a couple weeks. Did you put any money down on the game?
Monte: Oh [laughs] no, I did not, unfortunately. Well, maybe it was fortunately . . .
Ron: [inaudible]
Monte: Maybe it was fortunately; I don’t know. But, yeah, I was in Vegas for a good 10 days; back to back trade shows – InterNext and Affiliate Summit. I’m sure you heard the success of the domain auction we held for the adult industry up there. We sold $2 million worth of domain names. It was a great event. And it shows that even a niche market like that it’s been a . . . its been a kind of in-the-closet kind of group of folks, came out and definitely took down some major domain names.
Ron: Indeed. I heard some incredibly good reviews on what you guys did up there. Congratulations, by the way. And, do it again.
Monte: Yeah, definitely. Well, as you know, the next big auction is TRAFFIC West . . .
Ron: Indeed.
Monte: . . . at Vegas and we are just finishing up all the submissions that have come in and I don’t know, we have over fifty – sixty thousand submissions that have been submitted, so we’re weeding through the list and going through and evaluating reserve prices and stuff and making sure that we’re going to have really good names to present and there’s some great names that are going to be available for sale and on March the 7th.
Ron: You guys have definitely worked out that process. It’s amazing to me to see the excitement and energy that the auctions generate and just people get really interested in it and the best quality names seem to come out and it also seems to bring out the competitive instincts in some of the bidders, though; but that’s all good, though, I guess – if they win.
Monte: Yes. It certainly is. So, talk to us a little bit about the DOMAINfest and kind of the agenda and I understand that Zappy is opening up with keynote – is that tonight or is that tomorrow?
Ron: That’ll be tomorrow; tonight is an orientation session and there’s a cocktail reception. Tonight’s just really for gathering; and then the event starts tomorrow. Lawrence Ng, our CEO will do a lead-off introduction, followed by Mike “Zappy” Zapolin doing a big discussion on Internet brands and building Internet brands from premium domains. And then we have a long financial session after that. I won’t go through the whole list of the event but with lunch, we have a great speaker – Michael Arlington, the publisher of TechCrunch.com. He’s going to be here and he’s going to be doing the lunch keynote – we’re very excited about that. Uhm . . .
Monte: Now, Mike . . . Mike used to run Pool; correct?
Ron: Right. I think he was one of the founders, if I’m not mistaken.
Monte: Yep.
Ron: He’s got a tremendous background in the domain business. And combine that with his, you know, current experience and all things, if you will, new web business, I call it, or New Web 2.0. I think he’s got some great perspective and information to share. And there’ll also be a great Q&A; I think that will most likely be the most valuable component of the session, is to be able to get all the publishers, domainers, being able to ask really serious and specific questions to one of the (I think), one of the best minds in the online business today.
Monte: Yeah, definitely. And then I understand you have some kind of, like, a [inaudible] or expert panel of a bunch of folks from different companies . . .
Ron: Right.
Monte: I guess it’s kind of a Q&A – what’s the basis on that?
Ron: So, I think that the “Ask the Experts” Panel is tomorrow or Friday; Friday morning. And then Friday evening is a “Building Out Your Premium Domain” Panel. But “Ask the Experts” will be . . . what we wanted to do is try to provide some “best of breed” if you will experts in different areas – I think, legal; we’re looking at the advertising space; we’re looking at the search engine optimization, parking, other methods of basically taking a premium name and building it out into something more than just a parked name. And, so we’ve got a variety of people from different companies, like, uhm, I think, Casale and we’ve got a speaker from Microsoft coming in, talking about legal issues; and a couple different . . . I don’t have all the people committed to memory, because there’s quite a few, but we’ve got a lot of really talented, really capable people for that panel.
Monte: Right. I actually had the pleasure of meeting Aaron Kornblum . . .
Ron: Oh!
Monte: . . . who’s the Microsoft legal attorney. I met him at the Affiliate Summit and as a matter of fact, I think he’s going to be a radio guest, I think, next week or the week after. Microsoft, with the launch of Vista and a number of other online web properties, are making a big move to protect their online brand and we’re going to talk a little bit about Microsoft’s moves in the brand protection space there; of course, going after a lot of their trademark domain names, some of their type in domain names for people that are typo-squatting but on the other side there, they’re putting forth a new mission on, as a big corporation that’s going online and starting to do a lot more stuff, downloading online of making sure their brands are covered in advance so that they don’t lose or have their names held hostage, like they have been in the past. So, that should be a good show in the future as well.
Ron: Absolutely. And, you know, our whole objective with all the sessions and in particular with “Ask the Experts” is to try to figure out a way to provide some content that drives the business forward. By that I mean add genuine value and helps the participants take their business to whatever the next level is and then maybe beyond for them. And I think that a better understanding of the challenges facing domainers and even issues like legal technology-wise marketing opportunities – those are the kinds of things that we’re addressing. And I think Microsoft and Aaron Kornblum, as you mentioned, as a lot of offer there. We also have Eytan Elbaz from Google; and we’ve got David Liu from Jeffries & Company (Jeffries Broad View, I think it is); so I think we’ve got some pretty interesting speakers in that area.
Monte: Right. Now, David Liu is going to be speaking on the venture capital and technology overview front, correct?
Ron: Uh-huh.
Monte: What are . . . are they going to do a formal presentation about how VC’s are looking at the the domain market? Dive into that one a little bit.
Ron: Well, I think the format that we had tried to move to was less of a presentation-oriented format. We give each of them a short period of time to talk, introduce themselves and explain their area of expertise and their company’s focus; but then the bulk of it is really “Ask the Experts.” So it’ll be the audience taking the questions that they have and talking to the specific experts and then literally, just asking the questions. So, it’s less presentation, more Q&A, in my opinion.
Monte: Right, right. And I guess you’re going to have an awards banquet or something. What’s the “Festies” Awards.
Ron: [laughs] Well . . . let’s see, how would I described the Festies? I think that . . . I was thinking about it on the way over and that is that since we’re in Hollywood and they have an Academy Awards right next door to the hotel we’re in - in fact, the room that we’re in is actually the room that the actors and actresses go into after they’ve been given an award and give those famous, post-award speeches – you know, where they pose and . . .
Monte: Right. So you have all the puke buckets there, you know, when they throw up after they get it – or is that before they go up on stage?
Ron: [laughs]
Monte: Yeah, I guess you do. [laughs]
Ron: So I thought we’d have a little award session, a little award ceremony and it’s totally tongue-in-cheek, Monte; so I wish you were here, because you’d definitely be winning something.
Monte: [laughs] Well, I’m sure I win something anyway, don’t I?
Ron: Yeah, you’re definitely here in spirit. We’ll have something reserved for you. But, you know, it’s . . . TRAFFIC does a great job of the awards for the industry and we didn’t want to try to, you know, interfere with that, so we’ve decided we’re just going to have a tongue-in-cheek awards. Nothing serious.
Monte: Right, right, right. Got it. Uhm, . . .
Ron: We will be having a trivia contest, which I think will be very challenging for a lot of people.
Monte: Yeah, yeah. And, so, what did DomainSponsor make up this year for the event as your giveaways? You guys always have the best giveaways from your booth. You had, at the last TRAFFIC, you had a great pen that actually had a non-disclosure agreement that came out of the pen. I’m sure you came out with something really cool for this event. Did you come up with something?
Ron: Well, I’m going to let you down because the NDA Kit, the Mutual Non-Disclosure kit, we’ve actually just upgraded it. It wasn’t complete to my spec at the last show. I was hoping for a different design. We finally have that completed and we’ll have that here. We have a varienty of “Chatskys.” We’re sort of not trying to overwhelm everyone this year but I think we have our lava pens and various . . .
Monte: Cleaning out the inventory and getting ready for the next show then, I guess.
Ron: Yeah; in fact, I can ship you some if you just give me your address and I’ll send you some.
Monte: Well, John Morriella is there from our company, so you just give him the box, you know; we’ll pass them out here at the company.
Ron: Well, we are doing what we call “Prizapalooza” of which we’ve got about 30 or 40 prizes we’re just going to be giving away through random drawings throughout the event; just try to make it more interesting. And then there’s of course the DomainSponsor party, which everybody knows about at TRAFFIC and we’re having a Casino Royale theme and a James Bond Casino Royale and the grand prize for the biggest winner of the casino tables is an incredible James Bond 007 watch by Omega; it’s going to be pretty exciting.
Monte: Oh, I thought you were going to give away a car or something.
Ron: No; actually, we’re going to wait for the next TRAFFIC to do that.
Monte: Oh, okay; good, good. [laughs]
Ron: [laughs]
Monte: So, uhm, besides the show – it sounds like a really great event and of course, any time the domainers get together and they do business together and we’re educating the industry about what’s going on in the domain industry and opportunities and all this stuff, its always good. What’s going on at DomainSponsor and Oversee these days? What’s new? What’s on the forefront? What are some of the exciting things in development? I understand from the recent news that you guys raised about $60 million to invest and you know, where’s all that money going to go?
Ron: Well, ah, building the business. We are looking at doing a number of things. We’ve been doing a lot of acquisitions and portfolios. We’ve also been doing a lot of leasing, if you like, prepaying or you know, long term contractual commitments for traffic. We’re adding a lot of people and technology. There’s a . . . I won’t try to speak all the specifics but there’s a significant array of product roll outs that we’re doing as sort of feature sets and functionality. There’s a substantial International effort that’s been underway for a long time, developing improved mechanisms for monetizing International traffic. And here at the event we’re holding, in conjunction with the sessions for DomainSponsor customers, training sessions; basically, we call it the “User Track,” the user conference. And, uhm, we’ll have the entire product and most of the technology community here, as well as the account managers and doing hands on, one-on-one, training from DomainSponsor customer, showing them the new custom landing feature and some of the other interesting technology things that we’ve done. As you know, in domain monetization, it’s all about driving technolo . . . using technology to drive better results and it’s a never ending challenge, though. A lot of what we’re doing, you know, to answer your question of what’s going on at DomainSponsor, really circles around that just trying to stay as far out in front as we can of what needs to be done to improve payouts so that our customers are making more money than they were the previous month, so . . .
Monte: Right; now, uhm, take us through a little bit – because it is such a competitive landscape, uhm, you know, with Sedo there and of course DomainSponsor and Skenzo and TrafficZ and all these networks of PPC players – and as you know, you guys are a very important part of our traffic club system and there’s a lot of traffic that goes through there and we monetize a lot of DomainSponsor traffic through that partner ship – uhm, how do you see the competitive marketplace in this area? And is there still room for companies to get in? Are you finding it difficult to differentiate yourselves? Or easier these days? You know, walk us through where you see the landscape currently and where you’re going to see it in the future.
Ron: Well, I think as a market leader, we’re by far the largest domain aggregation monetization service, you know, independent company in the industry, so brand . . .
Monte: How many . . . how many domain names run through your system currently? How domain names and how many, like, individual visitors on a daily basis, if you have that [inaudible]?
Ron: Uhm, what I can talk about is that I know that we’ve announced that it’s north of 2 ½ million domains that are being monitored by the DomainSponsor System on any given day. And, you know, in terms of real specifics beyond that, being a private company, we don’t divulge a whole lot but it’s a substantial amount of traffic and a substantial amount of clicks that are going to our upstream partners. But, so, the 2.5 number, I can talk about.
Monte: Okay. And then . . . and then, so how do you find yourself differentiating yourselves against, you know, all those players that are also doing some of the similar things, saying that they’re the best and the biggest and you know, blah, blah, blah.
Ron: Well, you know, I think when you’re monetizing a company or an individual domain portfolio, you’re a business partner with them and I think you have to respect that relationship. And that’s, I think, how we focus our energies and efforts. We take it very seriously that we are a partner; we’re dependent upon to do certain thing and relationship and we emphasize that and we put a lot of energy into it. And I think that builds relationships and the relationships are the essence of the asset of the company. The relationships we have with our customers, the trust that we build and a lot of people place a lot of value in that. And I personally think if I had to say there’s one thing that we have that’s most valuable is the relationships with our customers and the trust, the bond, that’s between us both. And I think that the only way that you either gain leadership that’s based from any . . . taking from existing customers or grow a business like ours is by improving performance. And that means developing technology solutions and business models that improve the performance of the system, whether it be through technology enhancements, minor small or algorithmic, you know, schemes and so forth and finding the right types of ways to display information, be it graphics or text. At the end, it’s about RPM – revenue per thousand visitors, is a term I bought from Rick LaTona. But the bottom line is if we’re not competitive economically, I don’t think that we’d remain as leader; I don’t think anybody should. So that’s our focus, is to continue to figure out how to get more and more competitive by outperforming as much as we can. And it’s a never ending challenge.
Monte: Right. I guess in our industry one could say that sometimes the competition actually helps our businesses improve and get that much better because in an early stage market and industry and an emerging market that we’re in, uhm, competition is really good because we have good people even at the other companies that building companies and we always try to beat and challenge each other and we also interact with each other, especially at events like TRAFFIC and you know, the Domain Roundtable and so on and so forth; and it always helps us strive to be that much better than everyone else.
Ron: I completely validate what you’re saying, Monte. I think the competition is the key to innovation by a large measure. But I think that . . . I’m not saying as opposed to, but technology, in my opinion, is a key significant component and I think that we think of ourselves as having a pretty strong advantage in the technology arena and that’s key to our strategy. But, competition keeps everybody honest and quite frankly, drives innovation. A lot of people come up with some great ideas. We like all of our competitors in our space. There’s a lot of them and I wouldn’t want to be getting into this space, personally, having spent the last five years building this particular one, but it’s a very, very competitive space. But that’s the way it should be, right? I mean, that’s your point.
Monte: Right, right, right. And it’s a growing market, so . . .
Ron: Yes.
Monte: Yeah, I know what you mean. I tell people who want to be registrars that its not a very good idea to be a registrar right now either. It’s a lot more complicated than it was five years ago, that’s for sure. [laughs]
Ron: Yeah; I mean, everyone except the domainers in the middle of the space are experiencing what I call downward trajectory margins. You look out at the future and all the existing businesses that they’re in, you look at the margin forecasts and they’re on a downward trend, not an upward trend . . .
Monte: Right.
Ron: Who wants to, you know, get excited about starting a business in that environment. But that’s the nature of competition. Like you said, its healthy and it drives margins for companies like ours down and the only way to stay in business is to out-deliver and you know, you build your customer base and your revenue base. ‘Cause if you’re margins are going down, you’ve got to get the revenue from somewhere or you’re not growing.
Monte: Right, right. Definitely. Well, Ron, we really appreciate your time. I understand that we have Paige Howell standing by to be our second guest?
Ron: Okay.
Monte: Is he there in the room?
Ron: I don’t see Paige this moment; or . . . or actually, yes I do.
Monte: Oh, okay.
Ron: He just hit me on the side of the head.
Monte: Oh [laughs] alright. So what we’re going to do is I ‘m going to take a short commercial break and then we’re going to be back on with Paige Howell . . .
Ron: Okay.
Monte: . . . and then I guess he’s going to jump on the phone there while he’s there. And Paige has been a domainer for a long, has thousands of domain names and we’re going to touch base with him.
Ron: Alright; well, I’ll abandon the phone to him as we speak. So, thanks Monte, thank you for your time.
Monte: Thank you very much. We’ll be back on with Domain Masters in just a couple minutes. We’re going to take a short commercial break and be back on with Paige Howell, who’s a big domainer and someone who knows how to monetize traffic and sell domain names. Hold on.
[Commercials]
Monte: Hello, everyone; welcome back to Domain Masters. We just got done checking in with Ron Sheridan. They’re holding the big DOMAINfest out in L.A. and there’s two to three hundred people out there. And my next guest is not only a Moniker customer but also a long term domainer and someone that’s been very successful in building a nice portfolio, has experience with domain sales and monetization, Mr. Paige Howell. Paige, welcome to Domain Masters.
Paige: Thank you, Monte. Good to talk to you; wish you were here. [inaudible] . . .
Monte: I wish I was there, too. [laughs]
Paige: I know when I left Nashville, Tennessee, it was 16 degrees and I added 60 degrees by the time I got out here.
Monte: Yeah, yeah; definitely. I wish I was there but I was away for 10 days at InterNext and also Affiliate Summit and so I needed to spend some time at home but John Morriello was out there representing the team and I guess its going to be a big event, huh?
Paige: I think the expectations are running high. All the anticipation of what may happen and what is going to happen is evident as people start to arrive in the lobby and where the show is. You just get a sense of people coming up the stairs and its time to start meeting people and learning and making deals.
Monte: Great. Great, great. So, Paige, give us a little background about you personally, how you got into the Internet and also, into the domain market.
Paige: Oh, we used to track and buy and sell Internet stocks back in the first Internet heyday. And we had a list at one time of 1,200 publicly traded stocks and we simply bought and sold those and made money. And we started using the products that the different companies made to try to evaluate the stock. After making some money, we made an attempt to get a top level domain called .KIDS, in the original ICANN lottery of 2000 . . .
Monte: Right.
Paige: And that introduced us to the domain name world from the point of wanting to have a space that was safe for kids. That led us to buy expired names, even then in 2000 and 2001, which I think was a kind of every Tuesday adventure when a list would come out and you would try to buy different names that you could buy.
Monte: Yeah, definitely. And so, so when was your first domain name registered?
Paige: First domain name was 1997; the infamous time of the two-year minimum at Network Solutions. The $70 invoice that you got through the regular U.S. Mail and you sent the money in and you had your domain name. And that was BlueHorseshoe.com, was the first name that I registered . . .
Monte: Oh, yeah.
Paige: From the movie Wall Street . . .
Monte: Wall Street . . .
Paige: Where Blue Horseshoe loved a stock called Anacot Steel.
Monte: Yeah, yeah; definitely. And . . .
Paige: So me made some money, we lost some money. We went through the downside of the Internet bubble of ’01 and ’02. And it was actually in March of ’03 where an idea had hit me on the news, something was announced where I said I wonder who owns that name and in going to look for that name, I re-established my accounts at the registrars, was introduced to buying names, was introduced to the different names that were expiring at that time in ’03, got a hold of DMForum at the time, which was an emerging place for people to buy and sell domains through a forum system and that really sent me on this latest 4-year, what’s now a 4-year process of buying and selling names.
Monte: And how many names have you been able to accumulate since then?
Paige: Well, I think there’s a popular recovery for alcoholism; it says the first step to admitting you were an addict is to admit you have a problem and I haven’t got to that point yet. I’m still buying names and I’m up to 8,000 names right now.
Monte: Wow, wow. So, nice big portfolio. And as a domainer from back in some of the early days in ’97, where do you see some of the biggest opportunities for others that either currently in the market or getting into the market, you know, because you said you haven’t got to that, you know, that step program where you’ve been called an addict, yet. So you obviously see that there’s a lot more opportunity out there. What are some of the opportunities that you do see in a market where many think there’s not a lot of domains left?
Paige: Well, I think in many industries and investing areas that I’ve watched over the years, I can think that I’m in a mature business and start to sell or make different decisions and not realize that there’s still a lot more people that don’t know about buying and owning domain names than do. I’ll say I’m biased because I followed a pattern of buying domain names based upon the actual vanity value of the name to an individual or business, and less as much as to the actual dollars it earns per month. I don’t think it’s been hard to convince someone that if a name earns a thousand dollars a month and it produces $12,000 a year, that it’s worth some multiple of that. At the same point, in a different area, you can say would someone like to buy something of premium value? People stay in hotels that cost a hundred dollars a night and people stay in hotels that cost a thousand dollars a night. And I think the area of the Internet and domain name business I focused on is saying someone out there is going to want to buy one of my names. They’ve got the resources to do it. I just need one person to do it and then I just try to do it on a large scale to the small business and professional vanity user.
Monte: Right, right. And you use some really premium properties there as well, so [inaudible] . . .
Paige: We bought Seniors.com on the downside of the first Internet bubble, actually through an eBay auction. And that was kind of our one poker chip in 2002 to say if the value of dot coms (and, you know, “portal” was a dirty word at that time; AOL was potentially worth nothing to Time Warner) and that was our one chip to say if things come back that’s our one chip in the game. And then the rest of the names we’ve had have been probably not of that pedigree, but on volume, as long as we sell enough each month to make a good living, we’re happy. But more than anything we like to use the money to buy more names.
Monte: Yeah, definitely. So, what are some of the key things in your sales strategy to sell domain names. So, you’re obviously funding the business and getting enough money to pay the current operations (which is the renewal fees and whatever else that you have, you know, the overhead) as well as have money to invest in more property. What are some of the key strategies and some of the key things that have been successful for you in your sales strategy to get some of those onsie and twosie sales that have been significant enough to carry your, you know, your budget for a period of time?
Paige: Well, I’ll tell you one of the things I’ve done personally is I’ve offloaded the responsibility for selling the names to other companies and individuals, because I find, especially when I remember when I bought the name or I may have over the years developed any emotional attachment to a name, I’m not the best one to be on the phone with a buyer who says, hey, your going to make a lot more than the eight bucks you paid for this name. You should just give to me for five hundred or eight hundred, and come on, you’re making enough money. And then, at the same point, you’d like to be able to, like in real real estate, you have an agent who is kind of a buffer between the buyer, who’s able to say to the buyer, now, listen, only one person has to buy this name and you may or may not be that person. You know, we hope you are. And if you’d like to own this name, it’s the perfect name for your business; it’s the perfect name for your company, and it can add a lot of prestige to either a entrepreneur starting a business; if you’ve got your five second elevator speech, the first thing your saying is the name of your company and your website.
Monte: Right.
Paige: And we try to tell a buyer what is that going to say to the buyer. Just like the clothing you wear, the socks you wear, the shoes you wear, the belt you wear. If you’re buying that to make an impression, why not have the domain name that you use to make an impression. And it does mean that we have a lot of people that send us an email and say I want to buy your name for four hundred bucks or fifty bucks or twenty bucks that we don’t talk to; but we have found if we can tell that story to somebody, we find out if they’re a good match for our name.
Monte: Oh, that’s great. That’s great. And so, how many names do you sell . . . like, how many names did you sell in 2006, just as an example?
Paige: 2006, we sold 108 names.
Monte: Okay, and . . .
Paige: And this is probably our biggest challenge right now, Monte, and I’d like to have a discussion about it, potentially, which is we know if we use some of the industry numbers and our own experience, if on average we have 6,000 names throughout the year and we sold 100, we did about 1 ½%. Now, if that was fine for us and we made money, we’re happy. But we know if we can move that number to 3%, then we’ll be even happier. And there’s two ways to move that number to 3%: one is to shrink the number of names we own. Each month, a lot of domainers, like myself, look at a renewal list of maybe, in my case, 500 or 600 names. And I have to ask myself, would I buy these names again today? In many cases I bought them off drop back in the days when you could buy them for fifteen to thirty to sixty dollars. I say do I want to shrink the number of names I own so that the sales I do make are more profit – or – you look at the names that you’re renewing and you tell yourself, you know, over the last twelve months there’s names that go for two to five to six thousand dollars that I may not have renewed if I had the chance right here. So we look at it from a portfolio point of view that for every $2,000 sale we make, that allows us to renew about 300 names. And we look at those 300 names and we just have to constantly tell ourselves we better be renewing 300 names that are worth that one and only time we had the right buyer for $2,000 for the name when we could have put that money in our pocket. So as a portfolio owner of domains, that’s really our biggest challenge going forward. But to grow the topline number, we’d like to get that number to 3%. There was a book written by Michael Milken. He said that the overall number of participants in a market raises the value of each individual property. And he applied that to junk bonds. So we’re for anything in this business that raises the number of overall participants in the market, which we think will raise the value of each of our properties.
Monte: I totally agree with you and you know, there’s more and more people getting into our market every single day. There’s two million new Internet users on the Internet every month or so and with the cost of peripherals low and high speed access and bandwidth and affordable and website hosting and development, things driven by template driven systems and people carrying around PDAs and cell phones and accessing information all over the Internet, I think its still a very strong market and one that is maturing but at the same time growing and maturing, because its continually increasing. And then we have another dynamic, which is people at younger ages are getting onto the Internet and creating information and you know, identifying themselves and providing websites and information about themselves, like the MySpace craze . . .
Paige: Right.
Monte: And those types of things. Like, I think I spoke in my seminar last week at Affiliate Summit, you know, my son, who’s in kindergarten, spends three days on the computer at school and web development is a curriculum in their, like, their higher, like, elementary school classes. And so, when they get into like sixth and seventh grade, they’re going to learn how to build websites and stuff, which is pretty cool. And I never got on the computer until I was like 26.
Paige: Exactly.
Monte: Well, knowing what we know, I looked at it the other day and I said, why don’t I buy, in the next year, why don’t I take 30 names that I find that I like that I can buy via the registry or a low expired name bid and if I tell myself that’s my $2,000 IRA from my kids, if I really believe in this business, I should sit back and say, that, in twenty years, may look like something a lot greater than the other alternatives I have with the money. There, uh, Monte, I want to put you on the spot – I’m writing a book on domain name investing. I’d love you to have me come back and talk about the book [laughs] but I don’t think there’s any other place that has so many aspects, whether it’s the beanie baby craze, the eBay craze, day trading, online poker, where you can buy something for $8 and potentially sell it for three to five thousand, based upon the intelligence in your mind that you could see a trend coming or see something that’s valuable. And that’s pretty powerful and I think there’s a lot more people in the country that can learn about that and be in our business.
Monte: Yeah, definitely. And, not only make that on a sale, but actually monetize the type in visitors and traffic by just simply parking it and being able to monetize that traffic so you’re making money and you can potentially sell and every dollar that you make on the domain name while its sitting unused or untapped or even in development creates even more value because it establishes a higher base value for the property before you sell it.
Paige: And it creates a 100% cash flow for the investing groups that have gotten involved in our business, where they look at the revenue and they look at the margin and if you are using a service like you guys or one of the parking services, there’s not a cost to the property owner to manage that royalty stream. That’s really a come in in the morning, turn on your computer and have a voice-enabled system that says, Good morning, Paige; you made $179 yesterday.
Monte: Yeah . . .
Paige: That’s powerful.
Monte: That’s great, that’s great. So, have you decided to develop any of the properties that you have, uhm, out of the 8,000? Are you strictly on a sales and monetization strategy?
Paige: Uhm, based upon the paranoia from being through the purge or the cleansing that happened in 2001 and 2002, we looked at each of our properties and we say is this like a prom date that we want to date or is this someone we can take home and marry? So we do look at our names and we ask ourselves, if we had to, would we actually build out the content on this name, and to get back the two or five hundred dollar investment, you’re only talking about earning, you know, forty to eighty dollars a year to justify the cost of capital you put into a name. So we very much do want to develop and if we could ever just stop buying names, I think we’d start developing, but probably many of you people listening to this show know what its like when you can go grab a new opportunity versus develop something you have; uhm, that’s a horse race for me at least, so . . .
Monte: Oh, great. Well, Paige, anything else you’d like to add? Any other points that you think would be valuable to domainers just listening to the show or people that want to get into the business?
Paige: Yeah. I would say coming to a show is valuable. Uhm, if you’re like me, in the Southeast of our country, I may find one Internet café in every county. And you come here and you walk the streets of Los Angeles and you see one in every shopping center. Uhm, you may find one person in a networking group with in a hundred miles of you that knows what it is to buy and sell domain names. Or what it is to look at a name and try to decide if the traffic is declining or decreasing. And to sit with a group of people that’s going through the same battle, yeah, you may have to give up some closely guarded secret that you thought only you knew but I think you get a lot more than you receive by attending these different conferences and the Internet has been built on doing everything electronically. You register a name, you buy hosting, ah, registrars love the fact that they never have to deal with customers. But I think there is a place to deal face to face with the services providers, like I did meeting you at the conferences and the other domainers. So I think that’s valuable and I encourage people to come to something like DOMAINfest, or the other shows.
Monte: Great. Well, Paige Howell, thank you very much for your insight. And I look forward to helping you or answering questions for your book and look forward to seeing you – I’m sure I’ll see you at TRAFFIC West in Las Vegas in March, right?
Paige: Fantastic. And thanks for the work you guys are doing and for doing this show consistently as you’ve done. I think that it adds validation for all of us. So thanks Monte.
Monte: Hey, thank you very much, Paige.
Paige: Alright.
Monte: Okay; we’re going to take a short commercial break and be on with Jeff Kupietzky, who . . . yes, I sure am. No, no, no. I ‘m going to take a short commercial break and be back on with Jeff, I believe, who’s standing by with you, is that correct? Okay. So, we’re just going to do a short commercial break and be on back with Jeff Kupietzky from Oversee and then wind up the show. Stay tuned.
[Commercials]
Monte: Hello, welcome back to Domain Masters. Just a short commercial break. Thanks again to Paige Howell for giving us some insight into domain investing and selling. My final guest is Jeff Kupietzky, from DomainSponsor and Oversee. Jeff, welcome to Domain Masters.
Jeff: Thanks so much, Monte, glad to be here.
Monte: Okay, well, tell us about your role with Oversee and some of the information or some of the things that you’re working on over there.
Jeff: Sure. Thanks for the opportunity. I have been affiliated with the company for about a year, mostly in kind of a senior executive role at Oversee and most recently I decided to take on the opportunity to be general manager for DomainSponsor; so I kind of have two hats here. One I get to ask money for myself to put on things like this; then I get the fun of meeting our domain community in [inaudible] like DOMAINfest Global.
Monte: Great. And so, uhm, tell us what’s going on from a global standpoint with not only the show but also with Oversee as a company.
Jeff: Sure. For those that might not have seen it, we’ve been investing heavily in building up the infrastructure for the company. We’ve recently announced a line of credit from a number of banks that has given us the financial capital to continue investing in the business. Most of that money goes directly into hiring additional programmers and developers and helping build out the physical infrastructure for our domain business. Right now we continue to what we believe [inaudible] success in a number of different areas. Primary to that is our domain sponsor business. We invested heavily last year in new technologies for optimization, in building out some of the trade show capability and enhancing the relationships we have with the domain community. We also, as I think we’ve disclosed in a couple of announcements, are now actively buying portfolios as well. So our idea is if you’re a domainer, you have the opportunity to either park your names with us; you can lease your names with us or you can sell them to us. But we want to be able to be there with you for the life cycle that you own your domain.
Monte: Right. Now, stepping back, what was your previous experience prior to joining Oversee?
Jeff: Well, I probably started in a completely different space. I was early on a consultant for McKinsey and Company; and I learned a lot about business. But probably again, kind of on the old fashioned side. I ended up getting the bug for technology back in the late ‘90’s and went to Silicon Valley; started a small group called Sales.com for Seabole Systems and that was really a precursor for what people know today as SellForce.com
Monte: Right.
Jeff: Then, ended up hooking up with Mark Andreessen at his company after Netscape called LoudCloud. They were an ASP for hosting services. I ran product management there. And then made my way to southern California, where I ran what was probably the country’s largest ASP service; this was online banking at a company called Digital Insight. And then I saw search to be in the area to play in and ended up meeting Lawrence Ng, the founder and chief executive officer for Oversee. And that relationship has paid off for both of us, we feel, and I’ve been lucky to be associated with the organization.
Monte: So it sounds like you have a breadth of experience both back in the brick and mortar world as a consultant and also in the online space looking at various opportunities. What do you think is the biggest opportunity for this domain market today, both currently and also in the future? And what are some of the challenges as well that people need to watch out for?
Jeff: Well, I appreciate the question. When you talk again about my background, I like to tell people I feel myself more as a 3.0 type of person. And I think we’re still probably 1.0 as in relation to the domain industry. It’s still pretty early on. There’s only one or two business models that I think people are still looking at, and that tends to be, again, the PPC. But as things continue to evolve, as more money comes into the space, and specifically we see that through private equity or even some of our competitors looking to the public market, we’ll see a maturation occur where the number of business models and the breadth of ideas that people can work with will expand and we hope Oversee becomes a player and a partner for people through that transition. I think we’re really only in the early days for this and we’re very excited about what the future holds.
Monte: And where do you think some of the challenges are for those that are just getting into the market, both from a corporate standpoint (like other companies that are trying to get in the same space that Oversee’s in or our space or a combination of) or as an individual domainer?
Jeff: There are probably a number of them. Probably the one that I learned the most about was how seemingly small the barriers to entry appear, and then when you get on the inside, how insurmountable they actually are. And I mean that in terms of if you really want to build out a service organization that provides 24-7 care, that has guaranteed uptime for a server, where payouts can not be taken for granted, you know your checks going to clear, your wire’s going to get processed, that actually requires a fair amount of capital and it’s something we’re finding its not a small thing. You have a hundred-million-plus business, you have to invest in that to make that work, kind of day in and day out. In terms of the industry, I think what we’re going to find is there’s still . . . because its early, there’s a lot of education still that I believe as a industry we need to do. That’s mostly with the outside press with other players that are not yet in our space. You know, its funny; when you talk about who really values what we bring them and that is quality traffic – it’s advertisers. But everybody who writes about the space will talk about how the advertisers are not getting their fair amount. And I always found if we can get that direct dialogue with the advertisers, we could probably clear up a lot of the chatter that we hear on the board about what’s really going on in the domain space. So I think that’s a joint challenge for everyone in the industry. I think, frankly, venues like DOMAINfest Global are great ways for us to peel back the curtain a bit and let members of the press in on how really the industry operates and to get a level of comfort that this really is a new space for them and one that they should be covering.
Monte: Right, right. So do you guys have some good press coverage out there of the event?
Jeff: I believe we will and I’ll probably let our PR team kind of announce who will be covering because I think they’ve given some exclusives. But we can definitely make available some links after the show. We are doing our own CD and DVD of the event and we’ll be happy, again, to make that available as well so people can learn about the sessions that we are putting on right now. And we’d love to get feedback from the community. As Ron Sheridan must have said before I came that anytime two domainers get together, DomainSponsor wants to be there to be part of that conversation. So that’s our goal; that’s really the impetus for running this event. And we hope to do that, you know, wherever in the world domainers get together.
Monte: Right, right. Well, that’s great. Any other points or tips that you’d like to add for those that are listening?
Jeff: No; I think I want to thank those people that are hear that are probably not on the show who came to our first DOMAINfest and we reach out to everyone and say let’s continue the dialogue and send us your interest and we’d be happy to put on more shows in the future.
Monte: Great. Well, Jeff, I really appreciate you being on Domain Masters. The 2000 or so listeners will get a lot out of the show and also look into the event and its success and I guess it’s going to be an annual event for your guys, about the same place . . . about the same time a year?
Jeff: We haven’t disclosed, yet, our future plans but yes, we are very interested in feedback and you should expect some announcement from us soon. But thank you so much for the opportunity, we appreciate the chance to talk to your listeners.
Monte: Thank you very much. And thanks again to all three of my guests – Ron Sheridan with Oversee and DomainSponsor; Paige Howell, who’s also a Moniker customer and also has thousands of domain names who helped us learn about how to buy and sell domains and pay for the business that he operates and runs through his domain portfolio transactions; and also, Jeff Kupietzky, who also runs a lot of the areas at Oversee.net and in talking about DOMAINfest.
We’ll be on live next week at another show. Stay tuned also for all the archives. Again, the show that we did at the Affiliate Summit is a great download. Please download that show. Just an announcement also that the next live domain auction is scheduled for March the 7th at the Venetian Hotel at the TRAFFIC Conference; that’s TRAFFIC West. And then we have another live event at TRAFFIC New York, which is going on in June. So those of you interested, please submit your domain names to sales@moniker.com for review. For those of you who are interested in buying, please also contact sales@moniker.com and we’ll certainly take care of you.
With that said, I want everyone to be the master of their domain; have a great week and we’ll see you next week on Domain Masters. Take care.
[Commercials]
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