Motivational Time Out Blog Post

Dec 12th
posted in

DN Journal wrote a cover story about Frank Schilling, which is quite motivating to me, especially after meeting Frank in person and getting rum cakes from him today. About 5 years ago Frank got into domaining as a common man, and now his portfolio is worth deep into 9 figures. In the interview Frank said:

Everything on the Internet begins with a name and there are very few people who understand how domain names work or their importance to commerce, branding etc. Even folks who think they understand branding, don’t get the power or importance and versatility of names - they too miss the boat. This is the ultimate niche during the ultimate window in time and it will be for decades.

Most domainers thought Frank was late to the market and now he is the #1 domain investor in the world. And in spite of all the stories of domain success, there are still many steals on the market today. A few months ago I bought a name for $2,500, and since then the same name in a worse extension sold at auction for well over 10x the price I paid.

A few weeks AFTER Scores.com sold for $1,180,000 I bought Scores.org from the BuyDomains marketplace for $2,300. I don't have a site there yet, but I have a logo and an idea for a site I eventually want to build, if time permits.

I have been on a bit of a domain name binge this year. As I learn more about content and branding and managing people, today's $1,000 or $10,000 domain name is going to look cheap looking back at it 5 years down the road. My story won't be as good as Frank's story, but given how motivated my wife and I are, I think we will do well. A few years ago SeoBook.com was an $8 domain, with a default Movable Type template. Once I could afford spending $99 I bought a logo and color matched the CSS to it. The site has since got enough exposure that I met and married the most wonderful woman in the world through it. And it all started with a domain name. :)

If you are an SEO and you grasp a bit of what made Frank do well AND know how to make a site part of the organic web, you don't need to pay .com prices to compete. A .org or .net can work just fine if you have the content quality needed to be remarkable and citation worthy. And you can get a big big name in those extensions for $5,000 or $10,000. Sometimes you can get it for $8!

At Pubcon Las Vegas keynote speaker Richard Rosenblath said that content does your marketing, and content is essentially the next building block on the web as search continues to dominate the web. From the Bruce Clay blog:

The old model is owning a generic domain name (pets.com). The new is that the search engines don't care where you are. Get a one or two word domain on a nontraditional domain. Target the wide body and the long tail.

Market's are not fair, but they do not need to be if you have great timing. When you look at some of the content sites that are out there in many verticals the competition bar is still quite low. Wikipedia does not dominate because it is great, it dominates because most content is junk. HowStuffWorks is not a great site, but it sold for $250 million dollars. And if you look at the top ranking sites that talk about the deal, most of those pages are not exceptionally compelling either.

It doesn't matter how ads change or where the future of search lies. The tools and ideas needed to succeed are at your fingertips and you are going to do great.

I feel lucky to be able to write this post in anticipation of the years to come. You and I are lucky enough to be at a place in time where we can write our own luck! Cheers to the future, and thank you for reading. :)

Published: December 12, 2007

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Comments

December 12, 2007 - 9:06am

Cheers to the future and thanks for sharing this :)

December 12, 2007 - 10:40pm

What an inspiration!

December 12, 2007 - 10:56am

Finally a more positive post! Inspirational and hope-giving! Congrats!

December 12, 2007 - 12:35pm

totally agree... we'll know that it's saturated when there are late night infomercials talking about buying and selling domains...

December 12, 2007 - 1:36pm

I just bought two decent keyword domains for $7. They are both .org, but I think they work:

OnlineFreebies.org and CouponDeal.org

While they make not be HIGHLY search domain names, they get about 4000 and 2000 searches from the major 3 engines.

I have always wondered why .org is usually available. I love .org, they are not as good as .com, but I think they are better than .net.

December 12, 2007 - 2:27pm

I actually think you've got a good shot at doing better than Frank because you know how to develop. I know you read the two great posts yesterday from domainers Mike Mann and Kevin Leto about the importance of development. That's something that you get as well as anyone out there right now.

Domain investment alone might not be the goldmine that it once was, but a good-priced domain plus some smart development still equals huge returns.

December 12, 2007 - 5:35pm

Hi Shane
Well he probably has a 9 figure lead on me. I have no intent to attempt catching him, but if that somehow happened I would be far more surprised than you. ;)

December 12, 2007 - 4:48pm

I'd like to think there's going to be a huge market for good domain names, but I'm afraid it will be like the "no-fail" investment of gold or silver or platinum in the late Eighties. Sure, those folks didn't lose any money, but, due to rising costs and inflation, they didn't really do anything other than break even. Everyone kept saying how the markets were going to change and the boom in the telecom industry was going to put these metals in demand, but it just never quite happened the way everyone wanted.

On the other hand, domain names are a finite resource, so I suppose, like anything else, if you can hold on long enough, profit can be realized.

December 12, 2007 - 5:38pm

Hi Network Geek
But gold is just a fixed asset. It's value is often considered a standard for gauging inflation. It doesn't appreciate too much and keep it without inflation eating away at the growth because at the end of a day it is just an element and it just sits there.

Domain names are more like a snowflake. Only one SeoBook.com or Seo.com. Domains with websites behind them can double or triple in cashflow every year for 10 years straight. And usually price is some multiple of earnings * growth.

December 12, 2007 - 5:00pm

People should realize that even if they can only afford $9 domains, there is still plenty of incentive to play the domaining game. Remember, every high dollar domain name was once purchased new and with foresight and intuition, anyone can buy a $9 name which will be worth $$$$ down the road.

December 12, 2007 - 5:35pm

I read the article on Frank Shilling. There is something not right about the timeline - moving to the Caymans with $200,000 to buy domains (was that all?),hurricane destroying a multi-million dollar database (it was not backed up anywhere else?). If anything, the moral of the story was that he took huge risks (which a lot of people will not do) and it supposedly paid handsomely.

I worked on Wall Street and there are people who create self fulfilling prophesies. Long Term Capital (which almost destroyed our banking system) was one.

Major domain name portfolio owners remind me when George Soros needed to crash the British Pound. He had to convince bank dealers worldwide that the Pound was weak, and everyone got on board to short it. Soros made billions with the help of these dealers (he would not have been able to do it himself).

Maybe that is why I only make six figures and these guys make 8, but it still smells to me.

December 12, 2007 - 5:43pm

Hi Otane
Guys like Frank Schilling and Kevin Ham were making 8 figures well ahead of talking about it publicly. You can say it smells all you like, but if your names have the cashflow behind them then they have a value that does not make you need to sell hard or pump and dump to maintain your plot.

You can rush in late and buy bad names, but if you are patient and aggressive there are many deals to be had.

December 12, 2007 - 6:00pm

Well, 8 figures is what they say they made - Enron officials said similar things about the revenues for their company.

I am not trying to rain on the domain parade, just like to see the cash flow numbers and statistics on people trafficking their sites.

If these gentlemen are coming out publicly, and live in a tax free zone, why not show us the stats and convert us all into followers?

December 12, 2007 - 6:39pm

octane, its clear you haven't seen the numbers. I can register a crappy typo that makes no sense for $8, and then have it make $100 a year. Depending on the domain name, each visitor can average 15 cents to a dollar + per visit. Scale that out across just 10,000 good domain names and after a few months or a years worth of income you can retire.

Of course, most everyone has figured this out and its already priced into the domain name. (unless you get a fresh register, which is certainly still possible but lots of work.)

This means that most of the value to domain names at this point comes from your "value added."

a) Google likes generic domain names a lot. How much is position 1 or 2 worth to you?

b) Advertisers spend millions of dollars on an ad campaign only to have somelongdomainnamethatyouwillforget.com attached to it. If have oneword.com no one is going to forget it and you just multiplied you ROI many times over.

c) Niche.com gives the appearance of legitimacy. Approach an advertiser as either niche.com or free-niche-help.info and you are going to be in two totally different places.

There are a lot more "value added" propositions here far beyond what I've listed. These are huge things too, which most of the big domainers just do not have the skillset to make use of or leverage.

Are domainers hyping the heck out of domain names? Heck yes!!! They want to rake in the bulk of the profit off their asset class, not another smart entrepreneur who has a bunch of data they do not.

December 12, 2007 - 8:44pm

Aaron you are so right the future for online business looks bright for anybody willing to take the time to research and work hard at it.

Even through people like frank schilling and Kevin Ham may have a head start, they don't have a monopoly on making money online. You just have to take a look at what they have done and don't necessarily repeat it, but learn something from it or improve it.

Post like this reminds me of that and keeps me motivated

thanks aaron

December 12, 2007 - 10:25pm

The future is closer than people remember. Thanks for reminding us that now is the time to prepare.

December 13, 2007 - 4:38am

I like how you say:
"The site has since got enough exposure that I met and married the most wonderful woman in the world through it. And it all started with a domain name."

Everything started with domain name because you know what you are doing. You did a great job and now it benefit your life...
There are bunch idiots who got perfect domains and waisted them. I don't even know why this people even came in web business when there are so many signs on the streets "Full-Time / Part-Time needed, Apply now".
There are a good article called "Top 30 Most WASTED Domains" on a blog Succeedwiththis. I can't belive that .com names like "cool","alien", or "crazy" were waisted and now they just parked domains or 1 page site with Google ads.

December 13, 2007 - 7:00am

I also like you said that about the wife. I did't met my wife in the web, i feel in a similar situation, because knowing if I would not have done the work I did, I would never meet her.

December 13, 2007 - 7:02am

No that I want to say, that I would find her because of my good work, but often if we go forward and do the right thing, God blesses us.

December 13, 2007 - 2:12pm

Aaron I am getting to be famous...I'll have to hide from Paparazzies!

Out of 34 Million Trolls I am on page 13 of Google!

http://www.google.com/search?q=troll&hl=en&start=120&sa=N

I had Seth from Squidoo come say hello to me the other day on GetSatisfaction, and I am getting acquainted with Michael Arrington from TechCrunch...

Well I know they are just being friendly, but still nice to be noticed...

December 13, 2007 - 2:53pm

Aaron, very motivational words!

The next year will be a really important year for me. I am willing to quit my job on 2008 in order to focus myself on my online business. And I swear: I will get my financial freedom!

December 13, 2007 - 3:06pm

I think you're spot on with the point about there still being some great domains out there. A lot of folks are spending too much time looking for unregistered domains, just because they're trying to go the cheap route, where there are tons of domains on the secondary market for a few hundred to a few thousand, that will be far better investment in the long run.

I'm a little less bullish on the .org domains though. Unless you're going for a pure SEO play. I think that if you're building up a brand on a .org, you're doing more good to the owner of the .com than you are for yourself. As someone who's built up a brand on a .org, I feel that pain too acutely.

And I'm still curious to see what you're going to do with that domain. ;)

December 13, 2007 - 6:54pm

Aaron,

Great Post.

For all you naysayers: great, more for the rest of us....But, don't say we didn't tell you!

People who invest and develop domains are in it for the long haul. (Like buying real estate in Manhattan 100 years ago.)

Here are some factors which domain valuations are based on.

Facts:

For the next Foreseeable future domain names will be around.
http://yoquierrocomedy.blogspot.com/2007/12/understanding-gatekeepers-of...

".com" is a trillion dollar branded extension.

Search Algorithms love exact keyword matches, especially on an aged domain with strong backlinks.

If someone is paying google for PPC on that keyword, there is an end-user willing to spend money on your domain.

Dictionary words are hard-wired BRANDS in our minds.

Domains trade on the secondary marketplace based on revenue multiples (search traffic: 12-18 months revenue; Type-in Traffic: 7-8 years revenue.)

You can leverage a domain purchase through domain lenders.

Consumerism is driven by traffic. (type in traffic is like having someone walk right by your store front, search traffic is like someone finding you in the yellow pages)

Considering all of the above, the real domainers don't take any risks at all. Sure it might seem that way, but they know the immediate market liquidity and have the information needed to make ridiculously well educated decisions.

These people are savvier than you think. Instead of guessing about typo traffic, they go straight to the ISP and buy lists of domains which don't resolve.

I actually understand now what the big deal was about Microsoft's monopoly issues with IE. You control the browser, you are GOLDEN!

December 13, 2007 - 9:13pm

I couldn't agree with you more Aaron. SEO actually brought my fiancee and I together. I've always enjoyed the idea of creating something from nothing and design, development and SEO is just what I need.

December 13, 2007 - 10:38pm

Well, guys when getting a domain name primary market or secondary market, let the domain chose you not you chose the domain...

Hey it is sort of like falling in Love...you just know it is right...it screams at you, and you know you have to go for it! I mean look at Aaron domain, it speaks for itself, so as mine...I mean you just want to know What is it All about..:)

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