The MediaWizard’s Blog | mwzd.com

Well tbh, I don’t subscribe to TLD bashing. Its a common enough pass time for trolls and others alike on most boards. Some people do it to downplay competition, some coz they want to push something else, some coz its just fashionable to kick something when its down. But a really small percentage do it for educating the sheep (aka followers) who’re being led down the garden path by people with vested interests (not to mention huge holdings) in a particular TLD.

Some of the hype and hoopla on some TLDs really hurts some new domainers and wannabe investors. Its the guys who put in the rent money or the kids college education fund in these domains who really lose the shirt off their backs at times. Because they buy as its ‘hot’ hoping to sell to some sucker who doesn’t know better. The problem is most of the times they’re the ’suckers’ and they don’t even know it.

Take .ASIA for example. (A few people asked my views on .asia, here they are)

Theres a mammoth scam going on at the moment. Some real smart businessmen have come out with the ultimate ponzi scheme. A legal way to rip people off. They realized they couldn’t get a leg up on .com or any other established TLD - so they created a nonsensical, non targetted, unusable extension for ’speculative’ purposes.

How its done:

• Build the hype.
• Reserve 10,000 or so top ones (the only ones to actually eventually make good ROI) to milk later for higher amounts through auctions.
• Get a few hundred suckers to buy the domains in large quantities or at least pre-order them
• Get another 1,000 sheep who’ll follow those suckers.
• Show about 50k names as ‘multiple registrants’ and send them to auction
• Add mysterious non-regs or predated regs to show ‘viability’
• I’m not even going to go in-depth on the on the ‘available domains’ that are suddenly not available, cancelled orders, rigging or sale of tms here, suffice to mention them.
• Then lead in the sheep for the slaughter. Sell them whatever you can, however you can. Leave them holding the bag, while they laugh all the way to the bank.

You have to give them something though, the execution is impeccable. Even mTLD looked like amateurs when it comes to comparison with dotAsia milking the extension. They’ve been slick, smart and licked the cream clear off before offering the cone to the gullible lot.

The whole logic of this extension is totally wrong:

• There is no Asia aside from the continent. Only americans and some Brits even call all the people from the subcontinent that. No local considers themselves as ‘Asian’… Chinese, yes; Indian, yes; Pakistani, yes; Russian, yes; Afghan, yes; Malay, yes; Phillipino, yes; Thai, yes. WTF is an Asian?
• Its as viable as .nsam would be - lets club americans, canadians, mexicans, columbians, brazilians and a few dozen other nationalities. Would it work? If your answer is no, why is it yes for .Asia?
• Since people living in Asia are so nationalistic (try clubbing Chinese and Japanese and you’ll know what I mean) what is the need for a separate TLD? The chances of an Asian Union or anything that resembles it are less than that of a snowball in hell.
• Almost 100% of the countries here have border or cultural disputes with their neighbouring countries, without resolution of that there is a certain degree of hostility between these and being clubbed together is not going to work.
• There is no single currency for this region, unlike for .eu, and we know what happened with that one also, same cycle - hype, hoopla, con and crash.
• There are very few ‘asia’ level companies, either they’re national or worldwide, I don’t see those who target only the continent. And even if there are a few, is a gTLD worth the effort?
• There are a lot of other TLDs that have gone down the same route, especially 4 letter extensions - .mobi, .info .name and of course .eu, .sc, .cc and even .us to some extent.
• Only about 7% of the names registered in total will ever be worthwhile and of those a large percentage are .com, followed by well known gTLDs (.net/.org) and some ccTLDs (.co.uk, .de, .in). .Asia comes up on the list last, if at all.

What’s even more amazing is that people are booking names in .asia where the .com is still available. Reality check - a domain does not become valuable just because you registered it. So good luck to .asia investors, I really hope you make a million with your names, but wouldn’t count on it.

There are quite a few approaches to domains and domaining that domainers take. Its like the stock market or real estate market to a certain extent, everyone has their own strategy and most of them pay well for their proponents. I’ve pretty much seen most of the types and will try and enumerate them to enable you to follow what you’d rather be doing.

The Investor
These are the sharpest of them all. Buy good quality when prices are low, hold long term, sell high. These guys hold onto assets, maybe even develop them, ensure that they’re hot and in demand when the market is totally ripe, then sell them. The advantages of emulating this type is that you can afford to sell 1% of your portfolio each year and still manage to pull in the major bucks. The downside is renewals, unless your portfolio generates enough revenue, this cost needs to be factored in. People like Frank Schilling, Rick Schwartz, Sahar Sarid, Adam Dicker, Michael Goldman and probably most of the other big ticket guys will be found in this group.

The Flipper
These guys live to make a fast buck and sometimes the ‘buck’ can be a hundred thousand dollars or more on great buys. They know exactly which domain they can sell and to whom and for how much. If they can buy domains that they can sell immediately (1hr to 3 months) for higher valuation, they’re very liable to take the deal. This kind can be equated to the floor traders of yore. They’re fast, nimble and never hold large portfolios, in fact some only have the one domain they want to sell, right now, before moving on the next big deal. There is a lot of money to be made this way too, however its short term, here and now. So if you don’t sell, you don’t churn. I’ve seen some huge success stories in this lot too, Derek Giordano and Reece Berg are top of the mind here.

The Developer
Theres one more breed of domainer who makes money by doing something with their properties, hand regs, niche domains and the type. They take the domain, develop it, add content, do seo, market it and voila, eventually these low value domains become decent value properties. So $20 on a domain + $500 developing could easily lead to a sale, a few months down the line, in the $5000 range. Guys who do this have substantial skills in development, seo and promotion, without which this is just not possible. You could outsource development but then that could also kill your profit margins here. Guys who do this with some success include Adrian Allen and Lord Brar.

The Builder
A lot of people build websites on domains for their own selves. They are not looking to sell the sites or even would even with good offers, simply because the sites normally create more opportunities than can be equated into the bottomline as credit. These type of domainers are actually a major credit and can be found among all the types listed above. Top names that come to mind include Justin Allen and Tan Tran.

The Monetizer
These guys are only interested in the traffic revenues. They’re happiest buying domains that get traffic and make money via parking or similar. In fact some of the biggest deals in the past have included portfolios of well known monetizers. Now of course this particular breed has been overrun by big time players with hundreds of millions of dollars invested and go under the guise of ‘media companies’. This is probably the holy grail of domaining, whats better than pointing a domain to an automatic page and let clicks get you revenues? Kevin Ham, Yun Ye, NameMedia, DemandMedia and others fit into this group, as they do elsewhere but a vast majority of their revenues probably come from this.

The Broker
Usually unsung, rarely known and generally dealing on the QT are the domain brokers. These guys have a huge network of contacts and know whats moving, how and when. I don’t really have much experience with these type of people but Rick Latona is instant recall.

The Provider
A lot of domainers have some skill which is monetize-able and fairly useful for the non-developers. This can be writing, design, hosting or a wide variety of web development and promotion activities. I know this is not exactly domaining but I know enough people who do this to make money for domains. Popular people include Peter Mark and Leland Fiegel.

There are a few more kinds but I’d rather not go there right now, but if you’re interested in knowing drop me a comment and i may put them up in a different post.

This of course is by no means a complete list of the type of domainers out there. I hope that people whose names have been mentioned do not take umbrage at being categorized, I’m just trying to get a recall factor in by name dropping.

I’m sure all of them would have certain activities in other categories. I can see myself in about 3 too.

I’ve been watching the LLLL.com or four letter .com scenario, fairly closely, for the longest of times. I started using DomainTools (or whois.sc as it was known then) to harvest these lists for a while in 2006. In fact, thats what got me interested in domaining in the first place. Well that and the fact that our programs were churning out domains that were nice seo-wise but terrible viz brand value, but thats another story.

In the beginning, around middle of 2006, there were hundreds of LLLL.com available for hand regs, even then though, single words were gone, so were popular acronyms and even major country code + LL. You could still find gems but you didn’t see them as that then. I got a few time and again, some for projects, some for putting turnkey sites on to resell and some for a private collection. They were short, easy to remember and .com, sold pretty well with ready-to-go sites even then.

Towards the end of 2007 there was a rush of registrations, now people might argue here that monthly regs were only slightly higher, but fact of the matter is that they were going… fast. Sites came up with countdowns - most have since been turned into parked pages. There was a general rush of registering these, even the worst ones, since nobody wanted to ‘miss the gravy train’.

To be honest, the price hike at the beginning of 2008 took me completely by surprise and I dumped almost all my 4Ls then for $35-$300 each. People jumped head first into short domains, prices went ballistic. Propagators of this philosophy became the new messiahs (A few are in my blog roll* - Michael Goldman, Reece Berg, Richard, Yofie and Italian Dragon). Every word they spoke was treated as god’s own truth. Partially they were right. If you bought a crappy 4L.com in oct 2007 for $7, or reg fee as its popularly called, you could easily ‘flip’ them for $30 or so in bulk. Which basically meant you quadrupled your investment value in 4 months or so, unbelievable returns as any investment manager will tell you. [*Edit-k, I messed up here, forgot a few important names - which I’ve added now, very embarrassing, apologies to MG & Y]

Prices continued to rise, soaring to $60 ‘for the worst ones’ on any forum or sales venue till the middle of feb ‘08. Then came the pause, it sent prices for the worst ones came crashing down to more logical levels and those for the best ones went through the roof. This is where the conundrum actually comes in… What really makes a 4letter .com valuable? Why have the prices suddenly gone ballistic? Why are priced dropping in the reseller market? A lot has been said about this by various people, I’ll give you my take.

Short domain values are based on applicability. What is or is not premium is directly related to the applicability of that particular domain to a function, the more the applicability the higher the value. Domainers on the other hand love to talk about premium letters.

What are and what are not premium letters are not subject to random statistics or studies. A company using that particular combination of letters will find that domain premium, regardless of what domainers think.

This of course does not take into account pronounceable names - these are more valuable as brands as they can be easily branded and promoted. Thats why premium cvcv’s have gone through the roof. If a domain sounds cool and is brandable (eg. xegg.com), it has great value, specially with new companies and brands being launched everyday.

So a domain that might be valuable for one end user might not be for another and vice versa. They are not going to make any new ones, the ones that are there are getting scarcer and scarcer as they slip into large portfolio holders’ hands. The worst ones might be dipping in value now, but eventually even they will be worth something to someone.