"The single biggest cost website owners incur is the invisible cost of sales being lost."
I truly believe that more sales are being lost on the net than actually being made on the net.
This just illustrates why domain names are in such demand and why prices of this commodity has gone up faster than ANY other commodity EVER KNOWN to mankind.
It was hard enough to convince domain owners that "Type in"" traffic was a very valuable commodity and it had direct connection with the value of a domain name.
The power of domain traffic is far from understood. But in most cases it is highly targeted and potent. What if I told you that type in traffic from domain names is a bigger number than the numbers American Idol pulls? What if I told you that instead of "Idol" doing it a couple times a week, with domain names that traffic is generated every single day of the year? And what if I told you that instead of having 50 million viewers with different interests watching the same commercial the domain name can give you the power to advertise to just one segment with the same interests? Did you hear that? Do you understand what that means? The power these domains possess? Imagine what that would do to the sales of the end user. Imagine which way the rates would go if they doubled or tripled their business.
Don't even think about being part of the 98% of masses that embrace failure and fear success. Don’t feed failure and starve success. Don’t be one to achieve failure because you give up on the doorstep of success.
For the 2%, that “Failure” is no failure at all. It is a CLUE to your next success!
My job is to have domains recognized in the marketplace for the great investment that they are. More importantly it is to have businesses of every industry look at and understand the source and quality of the traffic produced by GREAT domain names. Massive amounts of targeted visitors looking for something very specific.
I think that "What if" is an important question to ask if you are looking at the COMPLETE picture. What if my competition can market online better than my company? What if their costs for a new customer are lower than mine? What if they spend 100% of their budget online and I only spend 20%? What if I am losing market share?
"What if".......What if Ford owned Cars.com? Perhaps their financial condition would be better?The POINT of all this.......What if you are hiring folks that are missing the BIG things? What if your CEO got $150 million in annual salary plus bonus and your company lost money?
cnet.com owns some great o
nes such as:
Disney owns many. Here are a few.:IAC has many known and many not so known. Here is just a few.
Gifts.com (formerly with ReadersDigest)
etc. etc. etc
Imagine if Hyatt Hotels had gotten hotels.com. Instead of you being 1 of hundreds of hotels listed including all your competitors and paying for each lead or each booking Hyatt would have received ALL the leads. Would that not increase sales? Would that not increase market share?
Step in Madison Avenue. These folks are sooooo hooked on "Branding" that they forgot the REASON they brand is to INCREASE SALES. So their REAL job is to increase sales. THAT is ultimate branding. Having your product everywhere. Funny how in time they have LOST SIGHT of that basic core contract. So Madison Avenue failed the hotel industry as well. IMAGINE, of all these high paid execs at all these companies and not a single one could figure it out. Figure that if they own a domain like Hotels.com they would be a leader in their sector. But they are all so hung up on BRANDING that they would rather IGNORE a reservoir of new business. New business snatched directly from the competition.
Even before it was attached to a business plan or went online hotels.com was going to be a million user a day site because it had a substantial traffic base. My guess would be that a domain like that would have gotten somewhere between 25,000 and 50,000 new visitors every day since the moment the domain went live. I guess the corp guys and Madison Avenue saw no value in having their call centers receive 9 to 18 MILLION added calls a YEAR. 9 to 18 MILLION calls that Hyatt would not lose to Marriott or Westin or Hilton or Holiday Inn or Ritz-Carlton or the other way around. They EACH had a chance to lock out the other hotel chains and they ALL missed it. They spend millions on a superbowl ad with results that can't compare and cannot even truly be measured. They let InterActive Corp (operator of Hotels.com) and Barry Diller beat them by disrupting the entire travel industry and for that they will pay dearly for decades to come.
Until folks face the greatest failure of their careers and learn from it they first must see and understand that failure. I don't want to beat these guys up. Really I don't. I am sad to report that 12 years into this and they STILL have no clue just how bad they failed. With 20/20 hindsight you would be hard pressed to find a hotel executive to say they screwed up by not getting hotels .com. What the hell is wrong with you folks??
Branding without using every tool is not building brands it is destroying brands.
7. All the dead guys that built the corporations so many work for today are rolling in their graves because those in position of power and leadership largely missed the greatest opportunity of their lifetime, their fathers lifetime and their fathers before them!
So here we are......
This may sound pretty basic to domain owners and developers, however it is GREEK to those outside the industry. They will doubt these beliefs. What they don't know is we are armed with stats to back up what we say. So my target audience is those outside the industry that still have a misconception of what GREAT domain names represent.
Everyone runs around and says they want to make a million dollars. But that is truly silly. It is the same thing as climbing to the top of a building or a mountain without a staircase, ladder, elevator, gear or some device to get you there incrementally. The map to making a million dollars is not making a million dollars. It is making a dollar a million times. It is making a PENNY 100 million times. So if you are STOPPED as I suggested, this is your first change. When you make a core change like that it affects other decisions down the line so now you have to reanalyze many things. Invent once and then repeat, repeat, repeat. The more you repeat and the faster you repeat it will determine everything else. $1 million, $10, million, $100 million, it’s all based on the same recipe.
There’s nothing real in giving a market value on a domain without knowing the UNIQUE CIRCUMSTANCES SELLER IS FACING IN LIFE.
In regard to real estate, when it comes to valuation, these are not similar at all. Real estate is limited by governments, strict laws, physical space. Domains are only limited by one’s imagination. You can build a small honey shop as well as building the next Google, MS, or something ten times of these companies combined. The sky isn’t the limit, it’s the UNIVERSE!
Some of the things that count in terms of valuation that appraisal companies pay no attention to:
1. Most important, CIRCUMSTANCES. IF you MUST SELL then the value drops fast. Must as in you must have X$ tomorrow morning for some urgent need such as illness, rent, travel expenses, etc.
2. BUYER. The value of a domain isn’t the same to different buyers. One can afford more then the other, one has different visions/plans then another.
3. SELLER. Are you bullish about the business? Are you bearish? Do you need to sell? Do you want to develop? Do you HAVE to sell? If you are looking to replace the income you currently make, what price would you need in order to get the same ROI on a different investment, and which differnent investment?
4. Where else can you get the same ROI? If wanted.com makes 1,000$/month, what price you need to get in order to get 1,000$/month from other type of investment, such as CD, stocks, gold? This is really an important question if your motivation is to move to a differnet investment with same or better ROI.
See, all these points are UNIQUE to the situation at hand, not to the property itself, and they are what MAKE the real value of your domain name. Without knowing and understanding the unique circumstances at hand the chances of guessing the value correctly are slim to none. That is why the value between appraisal companies vary so much.
Within the world of Web 2.0, the name coined for the second wave of businesses to capitalize on the Internet, direct navigation, sometimes called direct search or "searching without a search engine," is considered one of the fastest-growing niches.
It is projected to generate $650 million in sales this year in the United States, about 7.5 percent of all search revenue, much of it from revenue sharing with search engines like Google Inc. and Yahoo Inc. on paid placement ads hosted on its sites, said Jordan Rohan, an Internet stock analyst for RBC Capital in New York.
Rohan estimates that revenue pool could double in the next three years if direct navigation companies like NameMedia can refine their processes and develop e-commerce portals on their sites.
"More than any businesses I've seen on the Internet, these companies get to cash-flow positive almost immediately," Rohan said. "Direct navigation is the overgrown toddler of the online media space. It's large, growing, and a little bit clumsy in its movements right now."
People have been buying up Internet domain names since the early 1990s, though most of the early speculators were "domain parkers" or "cybersquatters" who owned static websites. As companies like Google and Yahoo deployed technology to monetize Internet traffic through advertising, some of those website owners were able to piggyback on their success by hosting advertising links. The sites attract traffic because millions of Internet surfers bypass search engines and type domain names directly into address bars.
Hundreds of people own portfolios of websites, but among the dozen or so companies that are trying to develop e-commerce and other businesses, NameMedia is one of the largest, Rohan said. Its competitors include Demand Media and Oversee.net, both of Los Angeles, iREIT of Houston, and Marchex of Seattle. While all seek to monetize their sites, each has carved out a different strategy.
"We're really a media company," said Richard Rosenblatt , co founder and chief executive of Demand Media, which was formed through three acquisitions and owns 200,000 domain names. "We're not going to build out all of the domains, but we'll use tools and technologies to create a better consumer experience on all our domains."
NameMedia is the new name of BuyDomains.com, a company that was started in Washington, D.C., in 1999 and acquired last year by a pair of venture capital firms, Highland Capital Partners of Lexington and Summit Partners of Boston. During the past year, operating in stealth mode under an interim name of YesDirect, the company moved to Waltham and acquired more domain portfolios and a technology platform for monetizing its sites through advertising. The company has increased its workforce to 75 from about a dozen.
"You hate to predict the future, but I think a business like this can be a multibillion-dollar franchise," said Bob Davis , managing general partner at Highland Capital, who sits on the NameMedia board.
Davis would not say how much Highland and Summit, the two largest NameMedia shareholders, paid to acquire BuyDomains or how much funding they'd provided during the past year.
Direct Navigation Overview
The direct navigation space has quietly been built up and grown while the Internet went through its cycle of boom and bust. Up to twenty percent of people who use the internet type in what they are looking for in the form of a domain name. This has been coined with the term, direct navigation.
While search engines provide a gateway to find information, the overwhelming number of results have often frustrated people trying to find relevant information. Their next recourse is to type in what they are looking for as a domain name. This targeted user intent has by its very nature led to an industry where such intent is serviced by trying to provide the information that might match that intent. The current model is by providing the pay per click advertising based on the keywords that were used to form the domain name. eg. Weddingshoes.com would provide a list of advertisers who advertised for the keywords wedding shoes.
Piper Jaffray estimates that the paid search industry will generate an estimated $14 billion globally in 2006. It is estimated that the direct navigation market represents more than 10% of the global search market and is growing at comparable annual rates. By 2010, paid search, including paid listings and paid inclusion, is expected to equal 40 percent of the online ad spend or $7.5 billion.
High quality portfolios of domain names are limited and difficult to attain, with the costs rising quickly each year. Yet the direct navigation market has started to mature as domain name prices have spiked and the direct navigation market has began to consolidate.
Reinvent Technology and its related companies are in a good position to build upon its quality domain name portfolio and positiion itself as a leader in this industry.