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July 12, 2016

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Playing to Win: How Hallpass Media's Bill Karamouzis is Cooking Up an Online Gaming Empire

By Ron Jackson 

Few domain sales have set more tongues wagging than one we reported in our first weekly sales column  of this year. CookingGames.com had changed hands for a stunning $350,000 but, even though we had carefully verified the sale with reliable sources, a lot of people - even industry veterans - had a hard time believing the transaction was real. Even more people (I have to sheepishly admit including me) had no idea what cooking games even were! But I have a good excuse -  coming from a family of four boys I was never exposed to a lot of girl's games. 

Unlike the rest of us, the buyer of the domain, 30-year-old Edmonton, Canada native Bill Karamouzis (who usually goes by the shorter Bill Kara on the web) knew exactly what cooking games were and, more importantly, how to earn a nice return on his investment in the domain. When it comes to making money from games on the web Karamouzis has been there and done that more successfully than anyone you are ever likely to meet.  

 

Bill Karamouzis
Founder, Hallpass Media 

Until now, the hard-working Karamouzis and his company, Hallpass Media, have somehow managed to fly under most people in this industry's radar, even though he has spent over $4 million acquiring domain names and has had massive successes developing and selling the FlashPlayer.com and AddictingGames.com websites he developed to major corporations. Obviously this was a man with an interesting story to tell and we decided there was no better time to tell it than now when so many people are still wondering just exactly who the "crazy" guy that spent 350K on CookingGames.com really is.

Bill's parents, Perry and Angela Karamouzis, were born in Greece and moved to Canada in the 1970’s. Karamouzis recalls, "My parents, like many Greek immigrants, were in the Food/Restaurant industry. Growing up I was around restaurants a lot - behind the kitchen, not sitting at a table end of it that is. Anyone that has ever worked in the food industry will confirm it takes 12 hours plus of daily work, no vacations, and really becomes a controlling part of your life. Watching my parents work like this without complaining would have to be one of the first things I recall about work ethic. Work is simply something you do, without complaining about the amount or difficulty. It has really been that simple for me since as early as I can remember."

(Left to right) Bill's sister Gina, Bill Karamouzis, father Perry and mother Angela.

"I knew if I wanted to get ahead the only way would be to do more, not equal, and certainly not less then the people around me," Karamouzis continued. "Without having any natural advantages the only way you can move ahead is really to out work the people around you. In my first 2 years working for myself I’d mention to friends how I just came off another “all-nighter” and they would be shocked at the notion of working more then 10 hours straight. The only thing that shocked me about an “all-nighter” was the amount of Coca-Cola a person could consume in a single sitting!"

Young Bill would grow up to be a 
hardcore gamer who would turn that 
love of games into a thriving business.

"By the time I was 17, I was working full-time while attending high school. I originally had plans to go into accounting or law as both somewhat interested me," Karamouzis said. In the late 90's, when the Internet was starting to enter everyone's consciousness, Karamouzis's plans started to change though. "Around that time a lot of my peers had entered university or college, but myself and a close group of friends decided to "take a year off” and find out what we really wanted to spend our lives doing."

During this time Karamouzis, who had loved role playing computer games like Dragons & Dungeons while growing up, noticed that a game called Ultima Online was breaking ground and introducing new innovations in what would become the multi-player online role-playing game space. Karamouzis said "Before there was Warcraft there was Ultima Online (UO) and for anyone that played during the first few years of release, this game was the Wild West. It showed what the net could really do for me, in a way I could relate too. A lot of the things gamers did in-game would later become mainstream things found online. It was social media before the term social media even existed. This game and the virtual world I played in really consumed my life for at least a year."

While most parents would be horrified to see one of their kids spending that much time playing games it would turn out to be time well invested for Karamouzis. "I would spend 12-18 hours a day online so websites were a natural extension of this world I was in," Karamouzis recalled. "I was self-taught, learning HTML, PHP, and SQL from online examples and tutorials."

"At this time everything/nothing sites (blogs) were becoming increasingly popular and the net was a very exciting place. You could literally have millions of viewers come to your site just for posting a collection of funny entertaining pictures or jokes online. Flaming GIF’s and mouse cursor effects were in their prime - it was a very wide-open time for web site development," Karamouzis said. "So, I created a site and began posting various things I found online - movies, games, jokes etc. It became a collection of oddball things I found on the net and due to the amount of time I spent online I became very good at finding things which were viral and entertaining on a mass scale. The site eventually reached 6 million viewers and I started to really understand the potential of the web and realize I wanted to be a part of it."

Before he would go out entirely on his own, Karamouzis decided to apply his newfound skills in the corporate world - a move that would allow him to bring in enough cash to finance his private endeavors. 

"The Internet was developing at such a rapid rate, traditional schools were really having a hard time keeping up to industry standards at the time. Having developed programming and design skills online, I had a lot of advantages formally educated, entry-level developers did not," Karamouzis said. "I was able to secure a great consulting job at one of the largest and most respected companies in Canada, Capital Health, beating out applicants with far more education. While they could code in Visual Basic and C++, I had working experience in HTML, PHP, ASP and could use Front Page and Dreamweaver." 

Karamouzis provided consulting services for Capital Health over the next 3 years and he added several other large companies to his client list while growing his own development business.

While still in his early 20's, Karamouzis scored his first large scale success with FlashPlayer.com which grew out of that 

Bill Karamouzis in his office 
at Hallpass Media

first website he had built after high school. Karamouzis noticed that his Flash Animation and Games section was drawing unusually heavy traffic. An ad network he was working with, UGO, convinced him a descriptive, relevant domain name would help him take his site to the next level. While researching possible names Karamouzis was surprised to discover that FlashPlayer.com was not owned by Flash creator Macromedia. In fact, the owner of the name was actually letting it expire and it was scheduled to drop within a few weeks.

"I watched the domain daily and put a backorder on the name," Karamouzis said. "To my surprise the name actually dropped and I bought it for $80. I thought I hit the jackpot! I put up a hit counter on a blank page and expected to see millions of hits in the morning. To my disappointment the domain never received more then 200-300 hits daily. Still, it was a great name and a perfect fit for my Flash games and animation website. My consulting company Flash Player Studios was officially rebranded as FPS Networks, Inc and it was GO time!  

Bill Karamouzis has a growing family as well 
as a growing business. Above: Bill and his
wife Ivana. Below: their new daughter Eleni.

"Once FlashPlayer.com was online it really took off," Karamouzis said. "We had fresh content daily, a clean site that was stable and loaded quickly. Other Flash sites were displaying adult content ads, which paid more, but really limited where their sites could be viewed from and by who which really helped our growth."

"In addition, many webmasters were doing everything in their power to either bury ads or force people to click on them. It was natural for a backlash to occur from this wide spread abuse.  I took a different approach - I always designed my sites to focus on the user experience while keeping quality spots for advertisers offering compelling products or services to my viewers. As a result I was able to monetize FlashPlayer a lot better then a site of comparable size, at the same time growing a large and loyal audience," Karamouzis said.

As his site and development team continued to grow Karamouzis's company started to offer a wide range of consulting services through FPS Networks. That opened the door for his next big success.

"I had hired a talented in-house team and saved up some rainy day funds so it was time to expand," Karamouzis said. "I searched for quality sites that I felt were under monetized. AddictingGames.com was a prime example. The site had great traffic, but I felt didn’t capitalize on it. The owner was an extremely talented entrepreneur who felt he had grown the site to a level he was happy with. After 6-9 months of back and forth negotiations, we agreed on a sale amount, I flew to Vancouver, purchased the domain and flew back that night."  

"We developed the domain from scratch in 30 days," Karamouzis recalled. "After three months the new site's revenue increased 10 fold, traffic was close to a million viewers a day. Our re-development of AddictingGames was an overwhelming success."

After selling two of his marquee sites 
Karamouzis diversified into 
real world real estate.

The traffic counts on Karamouzis's network also started attracting a lot of outside attention. "I was contacted by venture capital firms weekly and realized this was a great window of opportunity to achieve many of my life goals. I wanted to have financial stability, the ability to remain independent for the rest of my life and to be able to pick and choose the people/projects I worked with so, after a lot of consideration, I decided to put the two websites up for sale," Karamouzis said.

"My efforts resulted in FlashPlayer.com being sold to UGO (owned by Hearst) and AddictingGames.com was sold to Atom Entertainment (owned by Viacom) in a deal that included having FPS Networks provide consulting services and support for an extended period. As part of the sale process I met with legendary investors and tech leaders such as Rob Burgess, Michael Moritz, Mika Salmi and J. Moses. It was an unforgettable, life changing experience," Karamouzis said.

With a lot of extra cash now in hand, Karamouzis decided it would be a good idea to diversify his holdings. "I started a commercial real estate company and moved some of my sales proceeds into businesses I could touch," Karamouzis said. "I purchased and redeveloped a major Edmonton landmark, Olive Plaza, a 22,000 square foot retail center that was very challenging. Commercial real estate management/ownership presented me with an entirely new set of difficulties I was not used to. However I find real estate extremely interesting. I enjoy the dynamic of it and the face-to-face interaction it provides with other businesses owners."

Still, domains and website development remain Karamouzis's first love and he has equal respect for both. "Domains have always been an important part of my development strategy," Karamouzis
said. "There are many arguments for “generics” or “catchy” names and many examples of success with each type. In my case, I found generics really empowered my business. They add a level of credibility to the product. The “everything is taken” statement I’ve heard time and time again tells me even someone with limited net experience can understand the value of a good domain name. People say “You own WordGames.com? I thought one of those Facebook companies owns that” - nope, I do."

"A great generic name also helps search engines find you," Karamouzis continued, "and it will always remain a positive contributing factor to some degree in your search rankings. It will not guarantee you first spot on any term you want, but it will certainly help you get there. Anyone that has studied SEO knows it takes a multi-layered approach when it comes to search."

"I must stress this point about generic names, and about domain names in general though - they are a huge help for myself and others who own them - but they are NOT a substitute for a well thought out business plan," Karamouzis said. "Simply having a great name does not guarantee success. I have seen this countless times where a person or group of people buy a domain in a field they know nothing about and have no real interest in - only to fail. Buy domains which help you achieve your business goals. Do not buy a domain and then try and create a business around something you have no passion for."

Karamouzis's interest in acquiring domain names that he could build into thriving businesses led him to buy a number of domains from South American domain investor/developer Chris Chena who was profiled in our July 2005 Cover Story. "I was very fortunate to meet Chris early on in my acquisition spree," Karamouzis said. "He is a widely known and admired figure in the domain investing community so reaching out to him was one of the first steps in building my current company Hallpass Media."

"While I was not new to development, I was a novice at “domaining” when I met Chris. I had many conversations with him regarding PPC, the general domain industry and the people to work with and the ones to avoid while navigating it. Chris and I completed several deals including my purchases of domains COOL Games, Juegos Gratis ("free games" in Spanish), Animation.com and  CheapGas.com. Our transactions when added together would be in the low 7-figure range. Chris is a pleasure to work and speak with and we keep in contact to this day," Karamouzis said.

"Of the domains I’ve purchased from Chris, two have been developed in the last two months and are part of the Hallpass Media network. Animation.com remains parked and we have a few ideas on what we can do with the domain once the time is right. CheapGas.com was a very cool domain. I had it around the time gas prices were breaking new records daily so traffic and revenue were fantastic. I was never going to develop the name so when the right offer came, the name was sold."

"In addition to Chris’s domains, I purchased portfolios from IREIT, Marchex and a number of other domain investors. In total I have spent a little over $4 million on domain investments in the last two years," Karamouzis said.

Chris Chena

Karamouzis feels that his acquisitions have Hallpass Media positioned to surpass all of his past success. "Hallpass Media is the result of years of research into online gaming, user patterns and content management," Karamouzis said.  It began with HallPass which is a general gaming website, however as it grew I found it increasingly more difficult to get the right content mix for our viewers. Every week we featured a new mix of games and each week only a portion of those games appealed to any one set of viewers. It became increasingly difficult and expensive to attract new viewers to gaming websites so we had to come up with a new approach."

"After reading more about domains and domaining in general I decided to leverage generic domains in the popular content areas to create a niche network of gaming websites. This allowed me to create a user experience specific to each gamer along with targeted quality type-in traffic. If you only like stick games then why would I want my top content spots displaying word games? If you’re looking to blast some bad guys, do I really want you to have to sort through cooking games to get there?"

"As stand alone sites they would have a hard time reaching that critical mass needed to attract quality advertisers, but together as a network they have the reach needed to make us an attractive option for ad campaigns," Karamouzis noted. "In addition to a large general gaming audience, we also offer a targeted gaming experience to those advertisers whose products or services appeal to a smaller section of the gaming market. Advertisers are very careful how they spend in these turbulent times so providing them with as many options as possible was my goal."

Karamouzis added, "Hallpass.com and Girl Games are the only sites that are even a year old. The other sites are still very new and that is what excites us the most. Our growth and network synergy has been amazing. The websites complement each other and gamers are finding their way to the site which offers the right mix of games for them. It is still to early to see what the end result will look like as our two most popular domains still remain in the development stage. However, once the rest of the network is online I believe we will have created something that is unique and positive for gamers, developers and advertisers alike."

By now Karamouzis's $350,000 purchase of CookingGames.com is probably starting to make a lot more sense to you. Here is what he had to say about that high profile transaction: "This sale received a lot of publicity but it was never my intention to have this price published as it is probably the highest multiple I have paid for a domain. However after flying under the radar so long it was interesting to see the reaction," Karamouzis said. 

"Third party stats are available showing our millions of monthly viewers but even so people were overwhelming skeptical about the sale. This was a name I really wanted to complete our Girl Games offering. Having great generic domains in the two most popular areas; Dressup and Cooking Games was critical to a gaming company that is a leader in the female gaming market. Did domain investors miss the mark? Hard to say, but I think the same domain would be worth far less in the hands of a different type of developer so in a way they were right, but not for the right reasons," Karamouzis said.

While Karamouzis has now rounded up most of the names he wanted for his network, no one bats 1.000. "There are around a dozen domains I marked but was unable to acquire," Karamouzis noted. "After months of trying, anything that was missed was either far too overpriced or not suitable for our purposes. We have all the assets we really need for the network and our main focus is now on developing our assets."

As someone who has successfully developed multiple domains into real businesses people are obviously interested in Karamouzis's advice on the relative merits of developing domains vs. parking them (a monetization method that paid big dividends until PPC revenues started collapsing over the past couple of years). 

Karamouzis said, "It is very unfortunate that PPC earnings have dropped so drastically. I think as an industry the reliance on just a few advertising providers really limits and hurts growth. PPC companies are doing a great job optimizing landing pages but that bottleneck will always exist. Development is a great alternative to PPC revenue and my advice on development is fairly straightforward - start with a business plan then get the assets you need to execute that plan."

Bill Karamouzis (in his Hallpass Media office) says the key to development success is to 
concentrate on what you are good at and what you enjoy doing

Karamouzis concluded by saying, "I recently sold great domains like fact.com, cheapgas.com and turks.com. I am not an encyclopedia, a gas company or a travel agent so why would I pretend to be? I concentrate on what I am good at and what I enjoy doing. If you can take a hobby you truly enjoy and make it into a sustainable businesses I believe you will do exceptionally well in that venture."

*****

Editor's Note: Bill Karamouzis generously offered to invite our readers to contact him with questions or comments about this story (or domain/development questions in general) at billkara@gmail.com.

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