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That
change in the industry's "weather" after two long
years of recession, prompted me to forgo our usual
blow-by-blow conference review article to focus on that bigger
picture in this article, which will serve as a
companion piece to the dialog we opened on this topic in
last month's Cover Story. Along the way I'll weave in some
relevant DOMAINfest Global highlights that will supplement
the daily show coverage we posted while the event was
underway. If you missed those reports they are available
here:
DOMAINfest
Global Day 1 Photos and Highlights (Feb. 1, 2011)
DOMAINfest
Global Day 2 Photos and Highlights (Feb. 2, 2011)
DOMAINfest
Global Day 3 Photos and Highlights (Feb. 3, 2011)
Photos
& Highlights from DOMAINfest Global's Grand Finale at
the Playboy Mansion
On
a related note - since it is still a major news story as I
am writing this - let me address the widespread illnesses
that befell dozens of conference attendees soon after the
show attended. We wrote a detail series of daily articles
about this starting February
8th (the follow-up stories are here: Feb.
9, Feb.
10, Feb.
11, Feb.
14 and Feb.
16). The Los
Angeles County Public Health Department is still
investigating the outbreak as I write this.
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Image:
Sura
Nualpradid / FreeDigitalPhotos.net |
Our
primary concern has been making sure that those who
fell ill got the treatment they needed to
return to full health, as well as to see the
cause of the illnesses found so that
future occurrences can be avoided. We were also very
sorry to see what had been a triumphant week
for DOMAINfest Global overshadowed by something they
had no control over (as with all industry
conferences, the facilities are rented and outside
companies called upon to provide required services).
Once government health officials got involved,
Oversee.net worked closely with them to put them in
touch with all attendees so that relevant
details could be gathered and used to identify how
and where this infection began, exactly what it is
and now it should be treated.
Everyone
is still waiting for answers at the time of this
writing but we are relieved that it is now in the
hands of medical professionals and that most who
fell ill have reported getting better. We can
can at least start to re-focus on
business again, though our thoughts are still very much with those who have not yet fully
recovered and will continue to be until we hear that
everyone is back at 100%. We will continue to
follow this story in our daily Lowdown
section and will likely update this passage for
posterity's sake, once the final answers are in.
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The
good news is that as we return to the business
trenches - those who were at DOMAINfest Global agree
that the outlook is the sunniest it has been
for a very long time. It became even more so when
Jeff Kupietzly took the stage at 2pm February 1st to
present his views on the State of the Industry
2011 and Beyond. |
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| Kupietzky's talk centered on 10
predictions he had for 2011 and each one carried an
optimistic tone (by far the most optimistic
being his final one - a prediction that the NFL
would put a team back in his beloved home town - Los
Angeles)! The other nine will be of more
interest to those whose businesses hinge on domains
and the continuing growth of the Internet. Kupietzky started by noting the resurgence
in the domain aftermarket and predicted a
record year for high end sales - with several
topping $5 million. He noted that forward
thinking companies are coming to realize that it us
possible to acquire a category defining generic
domain for for less than the cost of a 30-second TV spot and own
that name forever.
Kupietzky added that Oversee saw their own
aftermarket business jump 50% in 2010 and the
momentum is continuing to build (our January
2011 newsletter breaking down the |
Jeff
Kupietzky details his views on the
State of the Industry: 2011 and Beyond |
| most
recent aftermarket sales data confirms this
trend). Kupietzky also noted solid growth in domain
registrations at the company's Moniker.com
unit as well as a dramatic increase in discussions
about domains names and their value in mainstream
media. |
Kupietzky's next prediction was vertical consolidation
that will see registry operators starting to run
registrar services for their own extensions - a trend that
is expected to accompany ICANN's planned launch of an
unlimited number of new gTLDs. He also noted that the
IPO window for domain/tech related businesses has
finally opened again - as evidenced by Demand Media's
very successful public offering - and Kupietzky predicted
more to come, as well as a record year for mergers
and acquisitions.
Kupietzky said Google will be facing more real
competition in 2011 and one positive from that will be the
company becoming more partner friendly. That would be
a welcome development from domain owners who believe they
have been getting the short end of the PPC stick from
their upstream providers. Customer relationships were also
at the heart of Jeff's next prediction - that Customer
Service would be the Killer App in Social
Media as more companies realize that the most effective
interaction with their customers may be accomplished through
a presence on popular outlets like Facebook and Twitter.
Part
of the wall-to-wall crowd on hand for opening day at
DOMAINfest Global 2011
Looking outward at the broader tech industry, Kupietzky
predicted that tablets will continue to rise as a
preferred form factor in the mobile space - with Apple
(and its ubiquitous iPad) winning the impending war
among competing device makers. He also predicted that end
users will see a much faster path to their favorite Apps
as developers work on streamlining the number of clicks
needed to access the full functionality of those
programs.
Kupietzky's final prediction (not counting his NFL
returns to Los Angeles dream) was for a new metric for
traffic valuation - that the value of traffic will be
assessed for its data value along with its current
category RPM. There is tremendous value in know what the
people represented by any stream of traffic are searching
for, allowing precision targeting of high yield
direct navigation traffic. He noted that Oversee has
developed a new precision targeting engine to power
the company's popular DomainSponsor
monetization service.
The sum total of Kupietzky predictions is that 2011 will
be a banner year for value creation
activities. Minutes after he wrapped up his talk and left
the packed ballroom still absorbing his optimistic outlook,
DOMAINfest Global keynote speaker Bob Parsons, the
founder and CEO of GoDaddy.com,
made his way to the stage.
GoDaddy
Founder & CEO Bob Parsons addressing DOMAINfest Global
2011 attendees.
Parsons' account of how he blossomed from a slow academic
start and a stint in the Marine Corps (he is a
decorated veteran) to become one of the America's most
successful entrepreneurs gave the audience another healthy
dose of inspiration. Parsons also gave a lot of practical
advice based on his 16
Rules for Success in Business and Life in General.
Bob's story is one those great entrepreneurial sagas that
leave you feeling that anything is possible. For many
of those whose enthusiasm for their business or for finally
implementing new ideas might have been flagging - I'm sure
Parsons' talk relit the fire and sent them home ready
to conquer the world.
Before day 2 of DOMAINfest Global 2011 kicked off
Wednesday, Feb. 2, Jeff Kupietzky hosted a group of bloggers
and industry reporters at a breakfast where he talked about
the direction he saw Oversee and the industry at large
heading. One topic Kupietzky addressed were the occasional
public conflicts that have emerged among competing
parties within the industry as it has undergone change -
change that
has created a fair amount of tension. He said he did not
feel any of that this year. "There is a lot more positive
energy that comes from collaboration now,"
Kupietzky said. "I've been saying for three years now
that we need to do that more and I think the fact that it is
happening makes people more confident about investing in the
space as they see that we all focusing on value creation
rather than destruction."
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Jeff
Kupietzky |
Kupietzky closed the breakfast gathering by fielding
questions on a broad range of topics. I asked him about
prospects for the PPC space, currently dominated by
DomainSponsor's upstream provider Google. He said
Google remains committed to the domain channel and that even
though their focus is on user experience and advertiser
conversions rather than on publishers, his company's relationship
with them allows DomainSponsor to give Google input from
a publisher's perspective, including how publishers can also
help improve user experience and conversions.
Kupietzky also expects that a new PPC network will
eventually rise to compete with Google. Jeff said, "I
don't know if Facebook is going to do it but they
certainly have the capability to do it. It may not be their
top priority right now though."
I also asked Kupietzky about the company's aftermarket
strategy. He said the company's SnapNames
and Moniker
divisions give Oversee very strong positions in the low end
wholesale category (SnapNames) and the high |
| end
brokerage/auction category (Monker) while partnerships with
multiple listing services like NameMedia's AfternicDLS and
Sedo give them access to big retail category in the
middle. Kupietzky said Moniker's brokerage business tripled
last year despite live auction results remaining flat. He
said the auctions have become more important as marketing
events rather that transactional events. Names exposed in
their auctions often sell after the event in deals quietly
handled by their brokers. |
Later on Day 2 one of the conference highlights - the
annual DOMAINfest Global Pitchfest Contest - was staged in the main
ballroom. This event underscores the innovation going
on in the domain and internet space. Eight finalists were
given a chance to pitch their new online business ideas to a
distinguished panel of venture capital executives who served
as judges (they were John Morris, Scott
Jarus, Andries de Villiers and Jeff
Cohn). The audience also got to pick a winner of
their own and, as was e case last year, the judges and
the audience had different opinions.
The judges named local deal site Smartvark.com as
their winner, allowing the company's presenter, Stefan
Wrobel, to take home the coveted prize and gain some
attention that could lead to a sizeable investment in his
company.
Smartvark.com's
Stefan Wrobel making the pitch that led judge's to
declare
his business idea to be the best presented in DOMINfest
Global's Pitchfest Contest.
In instant balloting conducted by cellphone text messaging, the audience came to another decision, naming ePayments.com their winner, earning presenter David Clements a return trip to the podium to pick up his crystal trophy from
Peter Celeste.
Pitchfest People's Choice Award Winner David Clements of ePayments.com (left)
receiving his award from Oversee.net Senior VP Peter
Celeste.
On day 3, the closing day of
DOMAINfest Global (Thursday, Feb. 3), one of the most
memorable events was an 11am fireside chat in which
Jeff Kupietzky interviewed Ben Mezrich, the author or the book that the smash movie
The Social Network was based on (the
book's title is The Accidental Billionaires: The Founding of Facebook, A Tale of Sex, Money, Genius and
Betrayal).
Mezrich has written 11 books including another (Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas For
Millions) that was also turned into a hit movie. That best seller
(that spent 63 weeks on the New York Times Best Seller list) was the basis for the film
21 starring Kevin Spacey.
Author
Ben Mezrich enraptures the DOMAINfest Global
audience with the detailed
back story
of how Facebook was founded by college kids at
his alma mater, Harvard.
Mezrich's detailed account of how a Harvard
kid, Facebook co-founder Mark Zuckerburg, turned
a campus website into an earth shaking corporation
with hundreds of millions of members again
underscored, as Bob Parsons had before him, that there
are no limits to what you can accomplish with
the right idea, a domain name and an internet
connection.
After the lunch break that followed
Mezrich's session, I got back together with Jeff
Kupietzky one on one for a few final questions. One
was a question that continues to linger - has
domain parking already seen its best days? "Though
revenues are down, the traffic from domains does not
go away," Kupietzky said. "Even though one
partner may value that traffic somewhat less this year
than they did last year, that doesn't mean the traffic
is worth less - it is just worth less to them.
It put more of an onus on us to figure out how do we
get that value from someone else." He said
Oversee is doing the considerable spadework required
to match specific domain traffic with the partner that
will value it the most.
With Oversee involved in all aspects
of the domain business, from registration to
monetization to aftermarket sales to full scale
development, I asked Kupietzky, given his knowledge of
the space, where he would put his time and
money if he were an individual investor, rather
than the CEO of a company like Oversee.
"My advice
is always the same," Kupietzky said.
"Pick an area you know something about
and focus on that category. If you are
the best at knitting, do that. Home
cooking, boogie boarding, whatever it is, take
your hobby or your area and really understand
it. Who do users want when they visit that
kind of property? Who are the advertisers and
suppliers of products in that area and what
are their needs? The more you understand that,
the better your chances of success."
"I don't think there is
any longer a good business where you say I am
just going to buy a domain, hold it and I am
done," Kupietzky continued. "You've
got to have a plan with that. It's just
like real estate. Most people don't buy an
empty lot and wait. There is a plan - I am
going to build something on here, or I might
partner with someone else to co-develop
something. That think domains are the same
way. Ultimately, I think you have to have a passion
for what you want to build because that is
going to get you through the hard work
of actually investing the time and money
needed to build something worthwhile."
|
Image:
Ambro
/ FreeDigitalPhotos.net |
On a final note, with Oversee's
history of growing through acquisitions I asked
Kupietzky if they now look for companies that
strengthen their current lines of business - or are
more interesting in broadening their reach into other
areas. "We are already strong in travel, credit
cards and retail and are interested in similar
areas," Kupietzky said, adding that they look for
companies that have a good model and a record of some
success, but could be taken to the next level with
some experienced business help. "We are always
looking for new technology, new approaches
and good people that can help us in any of our
lines of business."
Kupietzky added, "Most people who
want to do a deal want to do a big deal and at
some point I think we will participate in a big
deal." Could such a deal happen this year?
Jeff just smiled and re-iterated that he thought 2011
was going to be a very good year.
Another very positive sign for the
industry is the growing group of women who have
become active as investors, developers and corporate
executives in the space. Dozens of them got together
at the Fairmont for a special bash on the closing night before
traveling together to the Playboy Mansion for
the fund raising gala (for Jenny McCartney's Generation
Rescue organization that funds autism
research) that closed DOMAINfest Global
2011.
Kamila
Sekiewicz of NameDrive.com (at the far left
in the photo above) posted this photo
of the Women in Domaining party (Thursday
evening, Feb. 3, 2011) on her Facebook page.
The party at the mansion was another
memorable event (and not just because of the post-show
headlines about where people could have contracted the
illnesses reported after the show). It is one of the
most famous private residences in the world and one
that millions have wanted to see for
themselves. Guests are allowed to wander the
5-acre plus estate, so, depending on your personal
preferences, you could find solitude on the
grounds (which feature a private zoo among its
attractions) or join the crowds gathered in the party
tent or around the pool. The mansion visit (which has
been a closing night staple for the past three shows)
has been a big draw for DOMAINfest and a highlight of
the week for many attendees.
A
scene from DOMAINfest Global's closing night party at
the Playboy Mansion Feb. 3, 2011
Though the medical story that
developed after the show stole a good bit of
DOMAINfest Global 2011's short term thunder, the
conference itself was an unquailifed success
that, in the long run, will likely be viewed as a major
catalyst in the next big upward move for the
domain business.
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