Buying and Selling Domain Names
From buying new domain names or waiting out the incubation period on previously used domains, Monte will share what he has learned from a decade of experience buying and selling domain names.
Cindy: Hello, you’re listening to the E-Marketing Talk Show today with Cindy Turrietta, Todd Serouhan and Monte Moniker . . . uh, Monte Moniker – I do that every time. Monte Cahn from Moniker. In Segment 3 we’re going to be talking about buying and selling domain names. So stay tuned, we’ll be right back.
[Commercials]
Todd: Welcome back to E-Marketing Talk Show. I am Todd Serouhan with Cindy Turrietta and we are starting Segment 3 and we are talking with Monte Cahn of Moniker.com. Now, we’re talking about buying and selling domain names and you know, I’m still trying to get used to the new format - we have four segments now? Somewhere, our listeners are noticing there seems to be more commercials – there are more breaks but not more commercial time. [laughs] From what we’re told.
Cindy: [laughs] From what we’re told; exactly. And this is preparing for mobile where people won’t necessarily want to be listening for 15 minutes at a time on their mobile phones, so the segments are going to be shorter.
Todd: Yeah, so we have four segments now. So, everybody bear with us and your still going to get the great information out of E-Marketing Talk Show. So, welcome back, Monte.
Monte: Oh, ah, thank you.
Todd: [laughs]
Cindy: [laughs]
Monte: I like the format, actually.
Cindy: You do? Good. Good.
Monte: Yeah, I like the format.
Todd: Its really fast. Me and Cindy are going, wow, its over already?
Cindy: Yeah, we don’t even get through all our questions anymore. [laughs]
Monte: Yeah. We do, as you know, a radio show called Domain Masters and we kind of divide it up into two segments, so the four segment section is as actually a segment choice that’s pretty good for the [inaudible] . . .
Cindy: Yeah, exactly. Exactly. I prefer to do it all in one segment, personally, but I guess that’s not the way it goes. I’ve been seeing stats lately on pod casts and they’re saying that the 11 to 12 minute segment or 11 to 12 minute whatever listening time is the sweet spot; that’s what people are really liking. So this is good for us to shorten it down a little bit. But it doesn’t get us through everything, so getting right into it, I have a question. It’s like, with, with, Pay Per Click, they call it buying words – well, you’re not really buying words, you’re bidding on them. So, the same thing with domain names. We call it buying and selling domain names but aren’t we just really leasing them?
Monte: Well, actually, you are correct in a way. You actually own the right to a domain names when you register them. Its not like a lease; its more like a subscription – a permanent subscription which you are entitled to always maintain as long as you pay for your renewal. So, although the registry holds the home base for the domain name, as long as you pay for those renewals and those registrations, you will always have the right to use it, so it is actually a saleable product and service and asset.
Cindy: Interesting. So it’s the rights to use. So that makes sense, then.
Monte: Right. It’s more of a right to use it, a subscription right to use it. It’s not like a lease.
Todd: So, then you can actually sell them.
Monte: You can do whatever you want with it as long as its not illegal, that is.
Cindy: [laughs]
Monte: You can do whatever you want with it as long as you’re following the guidelines and the rules.
Cindy: Gotcha.
Todd: Okay. So, say, somebody has a domain name and they’ve changed their email address they’re forgetting its going to expire and it expires and then 3 days later they notice, like, uh-oh, my domain has expired. Is there an incubation period or are they pretty much SOL.
Monte: Uhm, well, different registrars have different policies. So, here’s kind of like the process. A domain name is registered for 12 months (at a minimum and then a maximum for up to 10 years if it’s a .COM or a .NET or .ORG name – some of the country codes have other various restrictions. Some of them can only be registered for 10 years; some of them have to be registered for a minimum of 2 years, but just getting back to a .COM and .NET scenario, it’s a minimum of 12 months or one year and a maximum of 10 years at a time); when a name comes up for expiration, it expires and then the registrar actually gets deducted from the registry the registration renewal fee, for a period of 45 days. In that 45 days, if the customer doesn’t renew their domain name, then the registrar has the option to delete the domain or keep it for themselves or offer it for sale or whatever they want to do with it but most send it through a deletion process and when it goes through a deletion process it goes through what’s called the registration, uhm, the redemption grace period, called RGP. It stays in redemption grace period for 30 days and that’s another 30 days for a registrant to come back and get their name out of redemption and out of expiration and gets it back to life. If they don’t do it by then, then it goes into what’s called a permanent pending delete status for 5 days and then its open to the public again.
Todd: And so, basically, that’s 75 days; did I count right?
Monte: Yes, its about that.
Todd: And then you have to acquire it.
Monte: Now, in that 45 day period, after the name expires but before the registrar deletes it, registrars have the option of deleting it anytime that they want, sending it to the redemption grace period. We allow our customers kind of the longest grace period, that’s around 35 or 36 days, before we set it free. But some registrars only allow a day, a couple days; some delete it right when it expires, so you have to really be careful about what your registrar does in order, you know, the day it expires to make sure that you’re really renewing it.
Cindy: So, there’s no real standard, what I would call an incubation period. I mean it . . .
Monte: Well, there is once you hit the delete button . . .
Todd: There’s a thirty day . . .
Monte: Once the registrar sends the name for delete, there is a standard. It goes through an exact 30 day redemption grace period and then a 5 day pending delete period and then its available to the public.
Todd: Okay. Then . . .
Monte: And then there’s all kinds of drop services that can pick up domain names the day that it expires and that’s a whole new aftermarket that’s driving the value of domain names up, actually.
Todd: Yeah. I think there are some of them, like SnapNames.com, is one of the guys that you refer to, right?
Monte: Yep. SnapNames. We work with a company called SnapNames and Pool and ClubDrop. There’s three major players that specialize in expired domain names for sale for their customers. And its all about helping your customers find the identities they want, whether its in the primary market, the secondary market or the aftermarket. So you can offer domain names for sale or when they delete or when they’re already registered and try to acquire names from other people that way. Or if the name is available in any extension, you help them register it that way.
Todd: And I have a quick question; something I almost ran into but unfortunately, they renewed their domain name. But, if there’s a domain name you see is expiring and they have quite a few links going to that website, is it a good idea to acquire that and just redirect that to your domain?
Monte: Its always a great idea if you can acquire a domain name, even after it expires sometimes those links remain on the domain name, even sometimes Google page rank remains on the domain name after a name expires, to acquire that domain name. Those have a lot more value than names that don’t have any links in them at all because what you have with links is a natural traffic flow into whatever you’re going to redirect or point or bring that name up for a new life and identity.
Todd: Okay; and then that being said, that’s the positive aspect. But the negative is what if a website got banned in say Yahoo! and Google and you acquire it not knowing that it was banned?
Monte: Well, ironically, that’s what happened with Moniker.com. When we purchased Moniker.com, we had no idea that it was a banned domain name. It was a banned domain name from 3 or 4 years ago because it had a bunch of content-related . . . non-content-related links on the actual website was redirecting all kinds of traffic into it. We didn’t know that when we purchased the domain name. So, it took us about a year to figure that out and then work with Google and Yahoo! and all the major search engines to make sure that we were unbanned, that we justified our case that it was a legitimate operating company and we were able to get ourselves off the blacklist, I guess you could say. So, you do want to check in advance if you can whether a domain name is blacklisted and try to prevent buying domain names that are blacklisted because that’ll be a big detriment.
Cindy: Yeah, it sounds like it really takes some effort to get out of that.
Monte: It does. It takes effort. There’s human review and you have submit a case that, you know, proves that you’re, you know, a legitimate entity. Now Google, in its special mixture of 100 different qualifiers of what a legitimate domain name is when its registered, now looks at the length of registration, you know, obviously the spiders crawl every single website. You don’t want to redirect a bunch of domain names into a single website without having some unique content because it looks like you have as many directed domain names into that website, it’s multiplied for duplicate content when you do that. So you want to do things that, with your 301 directs, redirects, and make sure that you have unique presence on each of your domain names and still utilize the redirection power.
Cindy: Right, good point. Now, we’ve talked about buying and selling domain names and when you buy or sell a house, it needs to be appraised. Is there a way to appraise domain names as well?
Monte: Uhm, there certainly is. As a matter of fact, we invented the appraisal format and algorithms back in 1998 and 1999. We had to do so because we were the first website to actually sell a domain name for a million dollars . . .
Cindy: Woohoo! [laughs]
Monte: . . . and the first company to sell a domain name for $2 million. And so everybody wanted to sell their domain names for millions of dollars when that happened and so you had to come up with some kind of algorithm that made sense to try to justify and qualify the cost and values of domain names at the time. And so, a domain name appraisal is very similar to a house appraisal, in many ways. Or a commercial piece of property. We now measure . . . back in the old days, we measured about four or five things, such as how short the word was, how easy it was to type in, does the word have meaning, was a .COM verus a .NET versus a .ORG, was it brandable, did it have marketability, those types of things. But today, we move into ALEXA ratings, link popularity, Google page ranks, TLD value, web frequency, search engine frequency, how often is that key word in the domain name, in the zone file of the entire Internet, those types of things. And so, you also look at traffic, just like you would on a busy street corner of a commercial piece of property. The more traffic you have, the more valuable that piece of property is, ‘cause its more likely that someone will come in and be diverted into your storefront and do business with you. The same is true for domain nnames. The higher natural type in traffic you have, more likely the more valuable your domain name is.
Todd: So can you tell us which domain name sold for a million dollars?
Monte: WallStreet.com.
Cindy: Oh, my gosh.
Todd: Through The Wall Street Journal?
Monte: . . . [inaudible] and we’ve sold lots of domain names in the seven and six figures since then. Uhm, e-commerce.com and portfolios of all kinds of different names for millions of dollars and its really the new economy, the new investment . . .
Todd: So, did The Wall Street Journal acquire WallStreet.com?
Monte: No. Ironically, a casino bought WallStreet.com because WallStreet.com back in 1999 received between 4,000 and 17,000 unique visitors each day and so they bought it for the traffic . . .
Cindy: What were those visitors looking for? [laughs]
Monte: Well, they were probably looking for Wall Street investment type opportunities or all kinds of Wall Street information but what this company did (it was a casino out of St. Kit) and what they were able to do is they were able to redirect the traffic into a WallStreet.com site that actually still exits today where people could bet on whether the stock market goes up or down, without having to buy stocks.
Cindy: Oh, my gosh; what a great idea.
Todd: Excellent.
Monte: In the beginning, they were doing very well and of course the .Com crash came and they revived everything; they focused on their business model and today, if you go to WallStreet.com, the same casino-operator owns the domain name and actually does very, very well with it.
Cindy: Well, he paid a million bucks for it; he’s not going to give it up easily, that’s for sure.
Todd: That was, what? 5 years or 6 years ago?
Monte: 1999.
Todd: 1999.
Cindy: And, I’m sorry, Monte, what was the one that sold for $2 million?
Monte: Autos.com. We sold Autos.com to Cars Direct back in 1999, also, which was an Idea Lab company and what they did was pretty unique. They were originally buying it to rebrand themselves from Cars Direct to Autos.com, but instead they set up a second, duplicate site on their network and they set two different marketing teams to work to compete with each other and to compete with each other’s site, to find out what conversion, what kind of landing pages, what kind of online branding strategies work best and they sell more cars sometimes on Autos.com than they do on CarsDirect.com and vice-versa and they keep bettering themselves against each other and using it as a competitive site for the same company.
Cindy: What an excellent idea.
Monte: Yeah, it’s a very unique approach. And, you know, they paid a lot of money for it but they definitely got their return on their investment as well.
Cindy: Sounds like it. Well, Monte, we have to take a quick break. Thank you very much but we’ll be right back, so don’t go away.
| Back to Index |