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Just
over two and a half years after they started the T.R.A.F.F.I.C.
domain conference in a Delray
Beach, Florida Marriott with a little over 100
registrants on hand, co-founders Rick Schwartz and Howard
Neu took their show to Broadway and staged a major
hit in the Big Apple. The June 19-22, 2007 meeting at the
Grand Hyatt in Manhattan was also a groundbreaking
affair for the domain industry as a whole, putting it squarely
in the spotlight in the financial and media capital of the
world. In
addition to Wall Street investors and analysts, the show
attracted mainstream media for the first time with the Associated
Press, Forbes
Magazine and all of the major New York
newspapers sending representatives. The profile of
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 Times
Square during T.R.A.F.F.I.C. week in New York
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We
were actually a bit late for the start of the ball - a 6:30pm
cocktail party Tuesday night at the Grand Hyatt. Three busloads
of domain owners (including my wife and I) had been 90 miles
north of Manhattan since Sunday (June 17) attending the 2007
SedoPro Partners Forum at the stunningly beautiful Mohonk
Mountain Resort near New Paltz. The trip back to New
York City began at mid-afternoon Tuesday so by the time we
reached Manhattan rush hour was in full swing and the streets
were completely gridlocked. The 90-mile trip wound up taking
three hours but that would turn out to be a blessing in disguise.
Let
me explain. T.R.A.F.F.I.C.'s opening night cocktail parties are
always high energy events with people making connections
and often laying the groundwork for new deals. They are such
important networking opportunities that I've always made a point
of trying to be there from the start. Typically as the evening
progresses the crowd and buzz gradually builds to a crescendo
and if you are there for the whole thing it feels like being in
the middle of a tide that steadily rises around you. When we
arrived in New York the party was already well underway and the electricity
tachometer was already past the redline.
Sea
of people at the opening night cocktail party in New York
Walking
into that room was like stepping into a tub of water with a
20,000 volt live wire in each hand. There were more new faces than I've ever seen at
a domain conference, including well-funded new investors as
well as a surprisingly large number of professional women (a
group that has traditionally been in short supply in what has
been a male-dominated business). This was a very welcome
development. The new blood drawn to New York brought fresh
ideas and the combination of that element with the expertise
of the industry's old hands created a truly unique environment -
an environment that I believe will end up yielding major
dividends for this industry in the months ahead.
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Travelocity
founder Terry Jones |
Tuesday
night was a non-stop express as the cocktail party
segued right into to the keynote address from Terry
Jones, the founder and former CEO of Travelocity.com.
Jones now runs a hot new travel start up at Kayak.com
and he shared some great insight on the high value of
good domain names and the potential rewards from domain
development. Jones started Travelocity as a small
department inside the multi-billion dollar Sabre
Corporation. He began with an idea and just ten
members on his team and wound up growing the enterprise
into a $3 billion public company with 1,200 employees
and over 35 million members.
Jones
was chosen to speak as the first step in a plan by
T.R.A.F.F.I.C. organizers to start zeroing in on the
most important verticals in the domain space.
Travel was the logical place to start since it generates
more dollars on the web than any other category of
ecommerce and many attendees own solid travel domains.
The mission for previous shows has been to make the
world aware of the inherent power and value of high
quality generic domains in general. That goal has now
been largely realized with the domain business now
regularly featured in mainstream business magazines and
daily newspapers around the globe.
Schwartz
and Neu now feel the time is here to shift the focus
from the general to the specific and show the importance
of domains to every industry that wants to succeed on
the web. Unlike many corporate leaders who can't see
beyond their brand, Jones understands the head start an
enterprise can get from owning a great generic. He said
he wanted Travel.com when he started Travelocity
but the airline pilot who owned the name refused to
sell. He wound up settling for a memorable coined name
but said smart marketers should try to get the category
killer domain for their business if at all possible. |
Jones gave the crowd plenty to think
about as they headed off to either sample New York nightlife or
get a good night's sleep ahead of the first full day of business
Wednesday morning (June 20). Schwartz and Neu kicked that day
off with a welcoming address at 9:30am, followed by Moniker.com
CEO Monte Cahn's instructions for participating in the
live and silent domain auctions (that would go on to break all
previous records with $12.3 million in sales - more on
that later).
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The Internet
Commerce Association's Legal Counsel Phil
Corwin and the non-profit trade group's new
Executive Director Michael Collins then each took
a turn at the podium to fill attendees in on ICA
developments and encourage domain owners to band
together to protect their assets by becoming ICA
members. Corwin gave a condensed version of the
compelling keynote speech he had delivered at the
SedoPro Partners Forum earlier in the week. Since I have
already talked about that in our review
of the Sedo meeting that was published over the weekend
I won't repeat it here. For the T.R.A.F.F.I.C. audience
Corwin summed up the ICA mission in a nutshell saying
the sole purpose of the organization is to defend and
advance the interests of its members. Among other things
that requires lobbying for fair laws in Washington,
D.C. and fair treatment from the overseer of the
domain name system, ICANN. |
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ICA
Executive Director Michael Collins |
ICA
Legal Counsel Phil Corwin |
In the first seminar session Wednesday
morning at 10:30, the topic was Beyond PPC with a
6-man panel exploring alternatives to domain parking for
monetization. Lead generation, leasing, development and
operating a full-blown business built on your domain were among
the strategies discussed. The panel had representatives from all
of those areas in Joe Alagna (General Manager at CentralNic.com),
Jonathan Boswell (CEO of LeaseThis.com), Rick
Latona (CEO of Offshoring.com), domain investor Anthony
Peppler, Ofer Ronen (CEO of Sendori.com) and Sahar
Sarid, co-founder of Recall Media Group). All
are on the dais in the photo below along with moderator Howard
Neu at the podium.
First
seminar of T.R.A.F.F.I.C. New York 2007 - Beyond PPC
While there is a lot of talk
about development among domain owners today, Sarid, whose
company operates full-fledged web businesses like FuneralHomes.com,
cautioned that development requires a great deal of effort and
often will not work out. When it doesn't you have to be ready to
make changes and keeping trying until you find a winning
formula. Though no gaurantee of success, development does have
the potential of producing great rewards. Latona (whose developed
sites are listed at AEIOU.com)
said that in his case, a focus on development has been well
worth the time and money invested.
| After a lunch break hosted by
Casale
Media, the focus switched to Wall Street's
view of domain names in a panel discussion moderated by RBC
Capital Markets Managing Director Jordan Rohan.
The panel featured private money manager Stuart Rabin
of Jacobson Family |
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Jordan
Rohan, Managing Director
RBC Capital Markets |
Investments (an early backer of iREIT.com),
Miles Arnone of American Capital Strategies
and Shawn Colo, co-founder (with Richard
Rosenblatt) of Demand Media.
Rohan is the best-known analyst of the domain
industry and one of the very first to start paying
attention to it. He said he has been amazed to see how
many other financial firms have jumped on the bandwagon,
noting that he is aware of at least 15 companies that
are now devoting major staff resources to following this
space.
It's interesting that
the domain extension debate that is so common at the
domain speculator's level extends to the analyst
community at well. While Rabin said .com is where
it is at (with some exceptions overseas), Arnone said he
thinks using .com will be less important over time
as growing recognition around the globe boosts
alternatives. Arnone said what is on the site will be
more important than the extension. |
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Stuart
Rabin
Jacobson Fam. Investments |
Shawn
Colo
Demand Media co-founder |
Miles
Arnone
American Capital Strategies |
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In
the second of four afternoon sessions, Fabulous.com
executives Dan Warner and Jackson Hopkins were on
hand to talk about the domain aftermarket. Warner, the company's
Chief Operations Officer, detailed their new Domain
Distribution Network (DDN). In this program, hundreds of
thousands of aftermarket domains are being made available for
instantaneous sale through well-known registrars like GoDaddy.com.
If domain owners are using a registrar that is part of the DDN
they can post their domains for sale through their registrar's
interface and they will become visible on the registrar's site
when customers search for a related domain name.
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Fabulous
COO Dan Warner
gets a grip on the aftermarket |
Domains
must be priced between $350 and $5,000,
which Warner said is the range that makes up the bulk of
the secondary market. If a customer wants the domain
they can put it in their shopping cart, pay for it and
have it immediately transferred to their account
with that registrar.
Warner
believes that increasing visibility of names available on
the aftermarket in this way, eliminating the wait and
offering reasonable set prices will lead to a huge jump
in aftermarket transactions. If you have Powerpoint,
you can get his entire T.R.A.F.F.I.C. presentation here.
We
have been planning to cover the DDN in more detail in a
separate article. We originally planned to do separate
pieces on DDN and NameMedia's aftermarket
solution DLS (Domain Listing Service) that
also incorporates registrar partners. However, given
these and other major changes in the secondary market we
are now planning on expanding this topic into a Cover
Story next month. Moniker, who pioneered the booming
live auction |
| format,
and Sedo who just bought GreatDomains.com and has
a highly successful traditional auction business, will
also be included in this upcoming overview of where the
aftermarket is now, where it is headed and what it will
mean for you. We already know the good news - business
is up everywhere and with so many new initiatives
underway it is very likely to get even better for domain
owners. |
The third afternoon seminar centered on Domain
Name Investing and featured panelists Tim Schumacher
(CEO and co-founder of Sedo.com), Ari Bayme (VP of
Milbank Roy & Co.) and attorney Steve
Sturgeon who is putting together joint ventures to
develop high quality domains. Schumacher delivered the
presentation on investment opportunities that he first gave to a
smaller group Tuesday at the SedoPro Partners Forum. We covered
his advice in our review
of the Sedo meeting.
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Sedo
CEO Tim Schumacher |
Steve
Sturgeon, Esq. |
Milbank
Roy's Ari Bayme |
Sturgeon talked about his efforts to
bring domain owners and development experts together in limited
partnerships designed to build out top quality domains and
unlock the full value in those names.
Bayme presented his always balanced view
of the potential risks and rewards of investing in domains. He
also urged domain owners to spend more time explaining the value
proposition in good names to new investors who are unfamiliar
with the space. He said most major investors are looking for
opportunities that can provide a 25-35% annual return on
the capital they put at risk. If you can show them that you hold
domain assets capable of doing that (either through monetization
or resale at a higher price) they will invest in domains.
| In the final seminar session Wednesday,
the relationship (or more accurately, the lack of a
relationship) between domain owners and Madison
Avenue was discussed by a panel that included Jackie
Stone (EVP of Digitas responsible for American
Express advertising), Deborah Brown (Peppercorn
Director/Partner responsible for Tyco and Whirlpool
brands among others), Eric
Rice (president of Domains for Media) and
Mike O'Connor (Haven.com).
For a long time now, domain owners have been
frustrated by the corporate advertising community's lack
of appreciation for the value of premium generic domain
names as they focus |
Faces
in the crowd at the Wed. afternoon seminars |
solely on brands.
Unfortunately, that frustration will continue
after this seminar. Listening to those who
understand domains (Rice and O'Connor) trying to
communicate with ad agency reps is like listening to
someone who only speaks English trying to carry on a
conversation with someone who only speaks Swahili.
Having seen several of these Madison Avenue discussions
over the past year it may be time for domain owners to
forget about it and move on.
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Eric
Rice
President, Domains for Media |
No matter how well
Rice explained the importance of owning the
channel (by holding the category killing domain
name) or how much better type-in traffic
converts than the search engine traffic purchased
by the ad agencies - it went in one ear and out
the other. Stone said few companies or agencies
would pay a lot of money for a domain name
(Brown, who is a PR specialist rather than ad
agency executive did understand the value of
domains). At every session I've attended on this
topic the tune sung by the ad agency side is
that it is up to domain owners to educate
them on why they should buy domains.
After listening to still another session with
the same message my gut reaction, to put it
bluntly, is that no, it is not the
domain owner's responsibility to save these
people's skins. If they can't be bothered to
do the research themselves when the way media is
used by their target audience is changing at a
clip that may render them irrelevant overnight,
then so be it. The track record showing
what great domains |
| do for
a business in generating leads and sales is out
there, along with the statistics showing that
direct navigation traffic converts twice as
well as search engine traffic. If they want
to keep their eyes closed and hope the new world
just goes away no one can make them look.
It would be one thing if domain owners needed
the money and were desperate to sell their
assets - then by all means, spend your time
trying to convince them why they should buy -
but those who hold great generic domains
own personal cash machines that never go empty
and thus have no motivation to let them go. That
being the case, I think the domain community's
time can be spent more productively elsewhere. |
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Digitas
EVP Jackie Stone |
Mike
O'Connor - Haven.com |
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While the final
seminar may have ended on a frustrating note, the mood
quickly lightened at the LeaseThis.com
cocktail party that followed. Then it was on to a gourmet
dinner sponsored by the overall show sponsor TrafficZ.com.
After that, TrafficZ shuttled everyone to their official
T.R.A.F.F.I.C. Party at the Hawaiian Tropic Zone
night club in Times Square. T.R.A.F.F.I.C. has a history
of great parties and this was certainly one of the best.
This part of the story can best be told in pictures! |
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| At
right: TrafficZ co-founders Ammar Kubba
(left) and Kevin Vo welcomed their
guests to the Hawaiian Tropic Zone. These gentlemen have
been innovators in the domain monetization space since
the day they began and they continue to push the
envelope today.
Below:
View of of the crowd from the second level of the club -
a great place to get away for a quiet conversation or
take a break from hubbub on the ground floor. |
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Ron
Sheridan (DomainSponsor.com) with T.R.A.F.F.I.C.
co-founder Rick Schwartz |
BuyDomains.com
co-founder and current Washington Venture Capital owner
Michael
Mann (left) with attorney Ari Goldberger. |
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Left
to right: Patrick Carleton (Executive Director of
Associated Cities),
Natalie Castello and David Castello (Castello Cities
Internet Network)
and Sahar Sarid (Recall Media Group) |
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Alexander
Schubert (CyberInvest) and
Freddy Schiwek of EuroDNS (right) |
David
Chiswell (Rebel.com/Pool.com)
and Rob Hall (right) of parent company
Momentous Corp. of Canada |
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Above:
Ammar Kubba helps judge a Miss TrafficZ Pageant |
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T.J.
Demas and William Gormally (right) enjoy their vantage
point on the second floor |
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| There is still a day to go at
T.R.A.F.F.I.C. and we don't want you to completely
forget about business so we'll break from the party here. You can find more photos from the TrafficZ party
and other T.R.A.F.F.I.C. events in the Photo Gallery
at the end of this article. But first, be sure to
continue on to Page 2 to see what happened at
T.R.A.F.F.I.C. Thursday, including that record-breaking
Moniker Live Auction that saw over $10 million
worth of domains change hands. |
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Coming up on Page 2
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