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We’ll
tell you more about that and take you through the conference week
(Oct. 24-28) step by step, but first let’s lay one question to
rest. For the past two years in our T.R.A.F.F.I.C. show preview
articles, I have asked co-founders Rick Schwartz and Howard
Neu “Will you be able to top the last show?” The
answer each time, including this past week, has proven to be yes
and each time they have cleared the bar of higher expectations by
a comfortable margin. So, I won't bother asking that question
again.
|
T.R.A.F.F.I.C.
Co-Founders Rick Schwartz
(standing
at podium) and Howard Neu
at T.R.A.F.F.I.C. East 2006 |
The
first
conference at the Marriott in Delray
Beach, Florida in October 2004 earned rave reviews
from the 125 first-time registrants. Every show that
followed (two more in Florida, two in Las Vegas and
one in Silicon Valley) grew progressively larger.
The crowd last week was almost four times bigger
than that at the debut show just two years ago. Many
attendees commented on the large increase in the number of
business professionals who now attend; Wall Street
analysts, representatives from major investment groups, Madison
Avenue marketers, IP attorneys and all the rest. As
one speaker commented from the dais one day, “Wow, this
crowd is dressed a lot better than it used to be!,” a
wry reference to the recent past when most of the audience
favored Hawaiian shirts, blue jeans and sandals. |
It’s
another sign of the domain industry coming of age. It is also
evidence that T.R.A.F.F.I.C. has become a high end brand – one
that has consistently delivered excellence and one that we think
has now proven it can be counted on to continue doing so in the
future (which will include 2007 shows in Las Vegas next March, New
York City in June and back at the Diplomat next October). Now,
on with the show…
The
opening event for all attendees was the traditional 5:30pm
Cocktail party Tuesday evening (Oct. 24). Earlier in the day,
before many registrants arrived, the golfers in the crowd had
gathered for a morning tournament sponsored by GolfCourses.com.
For the first time, a pre-show afternoon Orientation
session was also held for T.R.A.F.F.I.C. newcomers to get them up
to speed on the history of the event and what was in store for
them so they could hit the ground running. They were shown a video
highlight reel from past conferences so by the time they arrived
at the cocktail party, they were already familiar with the faces
of many of the people who have helped fuel the show’s rapid
growth.
Scene
from opening night cocktail party
The
opening evening is designed to let people mingle and meet friends
old and new. Many say the relationship building opportunities from
these social events provides more value that any other aspect of
the show, which is the primary reason the conference features
daily cocktail hours and after dinner parties throughout the week.
| However
when the sun came up Wednesday morning (Oct. 25) it was
time to get down to business. Steve Sturgeon, a
well-known Washington, D.C. attorney from DomainNameLawyers.com
sponsored and gave a brief talk at the opening breakfast.
Attendees
then moved to the conference room next door to hear a
welcoming address from Schwartz and Neu. Moniker.com
CEO Monte Cahn also took the podium to provide
information on the live domain auction his company would
conduct on Friday as well as their silent online auction
that started during the show and continued after the
conference closed, finally ending late Monday afternoon
(Oct. 31).
In
that opening hour, the crowd also heard from Pinky
Brand, the director of new market development for the .Mobi
registry. Brand explained the role the new extension is
expected to play in helping bring a better Internet
experience to the world’s millions of mobile devices
(there are four times more mobile phones in use than
personal computers).
Before
the week was out, Brand would be an extremely happy camper
thanks to unexpected six-figure bids on two .mobi domains
that the registry put in Moniker’s live auction Friday.
More on that when we get to auction coverage in this
report.
The
next session focused on ICANN issues and featured Directi
CEO Bhavin Turakhia who served as Chairman of the
ICANN Registrars Constituency for two years, current
Registrars Constituency Chairman Jon Nevett of Network
Solutions and attorney Mike Zupke who is the
registrar liaison manager for ICANN. They explained how
ICANN works and urged attendees to get involved in ICANN
matters (particularly by joining the organization’s Business
Constituency) because decisions made by the
domain name oversight body can have far reaching and even
devastating consequences for domain owners. |
Steve
Sturgeon
Pinky
Brand
.Mobi Registry |
|
Directi
CEO Bhavin Turakhia |
| Due
to the amount of ground we have to cover in this
article we can’t go into great depth about the
content of each seminar, but to summarize, Turakhia
and Nevett echoed the complaints many domain
owners have voiced in almost unanimously opposing
proposed new contract agreements for the .com,
.org, .info and .biz
registries that would give them unprecedented
power to raise prices at a time when costs of the
services they provide are dropping.
Turakhia
noted that the ground up policy formulation
apparatus that ICANN currently has in place was
not used, leaving the Internet community with no
input in the contract process. As the only person
on the dais who represented ICANN, Zupke did his
best to present the organization’s side of
things, but could not address many of the issues
directly as they involved matters that are outside
his area of responsibility at ICANN. |
|
After
a lunch break, the
afternoon session began with a wide ranging 8-man panel discussion
about domain values and various ways to generate the best returns
for your names. There was also debate about whether this is a
good time to sell or hold one’s domains and the role development
can play in unlocking domain value. The participants including
domain owners, financial analysts and domain company executives.
The owners group included veteran domain investors Rick
Schwartz, Sal Shepherd and Grant Keiser. The
company executives included iREIT Vice President Adam
Dicker (who also owns DNForum.com), Fabulous.com
COO Dan Warner and LeaseThis.com CEO Jonathon
Boswell. RBC Capital Markets Managing Director Jordan
Rohan and Milbank Roy VP Ari Bayme represented
the financial community.
| Keiser
and Shepherd commented on the versatility of a good domain
name which can provide a revenue stream even if it is
undeveloped or can be the base for a thriving worldwide
business. Shepherd noted the importance of taking future
growth into consideration before deciding to sell. For
example, he pointed out that one of his properties, Atlas.com,
made only $5 a day five years ago but
was making $250 a day today. Schwartz added that
you should look beyond PPC numbers and, if considering
selling, take into account how much the domain is worth to
the buyer’s business as that is often the most important
factor in the value of a domain.
Warner
pointed out that while many prefer to buy and hold,
selling selected domains can have a very positive impact
on overall portfolio value and he showed several slides to
illustrate his point. Rohan, Bayme and Dicker all liked
the benefits of development. Bayme noted that this can
open the door for you to sell directly to advertisers
which can be far more lucrative than PPC (pay per click).
Boswell presented a way to have your cake and eat it to
which is to lease your domains. That allows you to keep
the asset while potentially earning much more money than
you can through PPC. |
Grant
Keiser
Speaking at Wednesday seminar |
|
Steve
Hisey
VP, Oversee.net |
Rohan
also talked about how troubles at Yahoo.com are
causing a reduction in PPC payouts, another reason to
consider development as a way to protect yourself against
fluctuations in the PPC model. Rohan also made a case for
buying non .com extensions like .mobi and .tv,
saying they could make sensible investments because buying
the land around you can help protect the ground you hold.
In
the next session Wednesday, DomainSponsor.com
presented a panel discussion on valuing portfolios and
preparing them for sale. Steve Hisey, VP at Oversee.net
(DomainSponsor’s parent company) explained the
steps the company takes a portfolio owner through in
making a purchase of their domains. DomainSponsor
executives Ron Sheridan and Jothan Frakes
(who moderated the session) also helped answer questions
and attorneys John Berryhill and Paul Keating
discussed the best ways to structure a sales contract
and the tax implications of a sale. |
| I
also have to note that during this session
DomainSponsor’s Director of Business Development, Ron
Sheridan, unveiled the cleverest promotional item I have ever seen. It is a set of two ink pens (sporting the
DomainSponsor logo of course) that have a unique feature.
When you are closing a domain deal, the details of which
you would just as soon not have appear in DN Journal,
each pen has a pull-out, attorney-approved non-disclosure
form built in! DomainSponsor was giving the pen sets
out at their booth and they were one of the hottest items
in the exhibit area. |
Ron
Sheridan, DomainSponsor.com
demonstrates his non-disclosure pen |
In
the final session of the day, a new non-profit organization
devoted to protecting the rights of domain owners, the Internet
Commerce Association, made it’s debut. Previous efforts to
organize domain owners haven’t made much headway, even though
registrant’s rights and assets are increasingly coming under
attack from parties that want to take away what you have. The ICA
looks like they could change that. The five founding members of
the organization represent some of the industry’s strongest
companies, iREIT, Oversee.net, Sedo.com, Name
Administration and the World Association of Domain Name
Developers (the company that produces the T.R.A.F.F.I.C.
conferences). Each of those entities has made a substantial
financial commitment to the ICA and a legal counsel and Washington,
D.C. lobbyist, Philip Corwin, has already been hired.
Frank
Schilling, Name Adminstration (left) and Philip Corwin,
Counsel for the Internet Commerce Association
You
can get a very good idea of the ICA stance on important issues
current facing domain owners by reading a letter
that Corwin sent to the ICANN Board of Directors on Oct. 31. In his
opening paragraph Corwin pointed out, "The website ownership
community represented by ICA has risked large amounts of capital
in order to develop domain names as the first new form of property
of the virtual age. These professional registrants are the source
of the fees that support registrars, registries, and ICANN
itself." Corwin goes on to detail the problems the Internet
community has had with lack of transparency and accountability at
ICANN and suggests ways the organization can address those issues
and restore confidence among domain registrants.
The
industry needs to take steps to insure that the fruits of our work
are not stolen by others. Corwin noted that the train is leaving
the station and you have to decide if you want to be on it or
under it. The ICA will soon be opening its doors to new members as
it seeks to build a broad base of support throughout the industry.
We will let you know about important developments with the
group as time goes on.
|
Tom
Gardner sitting between Diana
Jackson (left) and Alina Schwartz at dinner
Gardner
begins his keynote address
Wearing
his famous Motley Fool jester's cap |
While
the ICA session brought the business day to a close,
another nine and a half hours of activity was still ahead
with a cocktail party, a dinner sponsored by DomainSponsor
featuring keynote speaker Tom Gardner, co-founder
of the Motley Fool, and the big after dinner
DomainSponsor party that went on until 3am Thursday
morning.
Gardner
proved to be one of the most entertaining and informative
speakers we have heard in a long time. The Motley Fool,
co-founded by Tom and his brother David, is one of the
most successful financial media companies in the world. My
wife and I sat with Tom during dinner and it was
fascinating to hear how the brothers had built their
company from scratch when everyone told them they were
crazy. It’s a refrain just about every domain owner has
heard and can identify with. Gardner certainly has a
kinship with domain investors and he has great admiration
for the foresight they have displayed in finding and
mining a rich vein of Internet gold that just about
everyone else in the world missed.
Gardner
told me he was a fan of small cap stocks (which have
returned 18% annually in recent years) and that he was
going to close his speech by making a prediction of
success for a domain world equivalent of a small cap
stock. Just before he got up to to go to the podium, he
told me that because of the explosion of video on the
Internet .tv would be his pick for future price
appreciation. I didn’t get a chance to tell him that the
.tv registry keeps most of the potential profit from .tv
domains by charging extremely high annual renewal prices
for what they classify as “premium” domains. |
When
Gardner closed his speech with the prediction of stardom for .tv
and started taking questions from the audience I got up and asked
him if he knew about .tv’s unique pricing structure. Without
skipping a beat, Gardner looked out at the audience and
said, “Did I tell you how much I like .info!?”
That drew a raucous round of laughter, one of many he earned with
the charm and wit he displayed throughout the evening.
| After
Gardner’s address it was time to walk across the street
for the DomainSponsor party, held at a scenic outdoor bar
at the edge of Florida’s Intracoastal Waterway.
The event, always a centerpiece of the week at
T.R.A.F.F.I.C., presented another great opportunity to
meet new people and learn about what they were doing in
the domain space. It also the perfect occasion to catch up
with old friends and compare notes.
While a fair number of
people were still on hand for the 3am close, I reluctantly
had to throw in the towel around 1am so I could catch a
few hours of sleep before the next 18-hour day began
bright and early Thursday.
|
Scene
from DomainSponsor Party |
Continue
to Page 2
-
John
Berryhill Exposes Dumpster Fraud
-
If
You Had a $100,000 to Spend On Domains - What Should You Buy?
-
Rick
Schwartz Lets Madison Avenue Have It With Both Barrels
-
It's
Party Time Again!
|
