|
Chad
Folkening, Global
Ventures and
Domain
Holdings
|
Chad
Folkening |
To no one's surprise, Chad Folkening
was elected to the T.R.A.F.F.I.C. Domain
Hall of Fame in 2012. In addition to his
many years as a successful domain investor
Chad has founded or co-founded such innovative
companies at Global
Ventures and Domain
Holdings. Folkening viewed 2012 as
a very good year for both domains and the
Internet at large.
"I think the true
nature and capabilities of the Internet really
came to the forefront this year,"
Folkening said. "A pure form of web-based
functionality and connectivity, with cloud and
tablet usage, created great user experiences
and business productivity performances.
With Google Drive, GMail, Dropbox and
other programs, being anywhere, anytime
through cloud and connectivity really planted
its base in 2012. This plays right
into the domain space with the nature of
the DNS system and brand identity.
Domains are not just for us humans to
remember the location of the data, they are platforms
to build a business and these technologies
that really took hold in 2012 increase the
value asset potential for domains." |
"The other event/trend in 2012 was the new
TLD situation and the cause/effects that
has had on the industry. This put
pressure on domain owners just sitting on
premium domain assets with no real execution
strategy and really opened up the
opportunities to acquire great assets with
more supply coming to market at good prices. I don’t think as many domains would be
available without the new TLD’s opening up
likely in 2014. I still think there will
be some issues and delays in the launch,"
Folkening said..
"I remember back in
1998, before ICANN existed, the government
wanted to consider offering more TLDs and
surprisingly I was one of only a handful of
people to voice input in person with Ira
Magaziner at the White House.
Here we are 15 years later and
.com still has so much global market
penetration over any TLD right of the dot and
that will continue growing in
international appeal. Change is constant
and evolving has to be in anyone's plan. I
like to play where the markets are established
and think there will be a third upswing in
domain values again for premium .com assets
mainly because of international buying
patterns and the supply/demand."
Folkening predicted.
"Information, personalization and
business model structuring will be the driving
force of value creation for domains in 2013.
The challenge will be how to best
utilize and optimize the inflow and outflow of
data. RTB, Real Time Bidding
marketplaces will get better and quality
domain traffic will see an increase in
revenues while arb and other traffic bump
techniques will become harder and harder to
earn money as a domain flow
through channel. Most systems
bundle good traffic to offset bad traffic and
now individual domains will be independent
letting the market determine the true value of
the traffic to the targeted domain,"
Folkening said.
"We'll see the 800 pound gorilla, Google,
put tighter rules on its publishers and
force many domainers to implement new
models for their domain assets. System requirements and policies
continue to be put in |
Web
traffic image from Bigstock |
| place to filter traffic
and quality domains with traffic will see RTB
systems make more aggressive plays into the
quality traffic sources. Conversions
count and are rewarded but the true value in a
domain is its structure to streamline
business formation and operations
while getting similar physical real estate
benefits and tax distribution value. I call
this the eCorp business model and
domains are the perfect asset to execute a
blended technology, real estate model." |
"2013 will be
another great year for the domain industry and
land owners are in good shape if they have the
right strategy, partners and business
model" Folkening concluded.
Jason
Boshoff, CEO, Domain
Holdings
Jason Boshoff is the CEO of Domain
Holdings, the domain sales, monetization and development company co-founded by Chad
Folkening and John
Ferber (Ferber previously built
and sold Advertising.com to AOL for
$495 million). While Folkening gave us
an overview of the current domain and Internet
space, Boshoff zeroed in on what is happening
in the domain aftermarket and monetization
arenas, starting with domain brokerage.
|
Jason
Boshoff
CEO, DomainHoldings |
"Fixed
pricing of assets drove a larger volume
of transactions in the premium inventory
market," Boshoff noted. "Sellers
proved more willing to contract with brokers
and pre-price inventory. Confidence in minimum
price expectations enabled brokers to attract
and engage the end-user market, where there
was significant demand. This coupled
with more formal sales contracts and better
transaction processes made it easier for major
companies and brands to participate in this
market. Domain Holdings witnessed sellers
being more open to negotiations and an overall
desire to maximize returns through
divestment."
"We
feel the unknowns in 2012 associated with the
gTLD applications and capital gains changes
pushed many inventory holders and speculators
to move toward realizing liquidity.
End-users were buying more; wholesalers
were selling more and participating
heavily in the drop catch and auction markets
where there is a high volume of large margin
opportunities at sub $10,000 transaction
sizes," Boshoff said. "Revenue
generating assets were in demand, particularly portfolios that sold at
multiples of 17-28 months. Confidentiality was
a major
|
| requirement and all seven-figure
transactions of which DH was witness were protected
by confidentiality clauses. There also
proved to be significant demand and
aftermarket activity for developed revenue
generating assets with multiples in the 24-48
months range." |
Boshoff
added, "Q4-2012 saw an average
transaction size of $56,636
(***excluding 7 figure transactions) stemming
from ~28 divestments per month, where a
divestment might include multiple premium
assets. This number does not realize long-term
revenue for lease options and financed deals
with future earnings not accruing within this
date range."
Turning
to domain monetization, Boshoff noted, "Disintermediation,
cooperation and innovation were the most
obvious trends witnessed from our vantage
point in 2012. Domain traffic and its
credibility as a whole continues to devalue,
mostly because of fraud and poor arbitrage
practices, however innovation of a few
players in the space has led to better
long-term solutions and service offerings.
Quality traffic continues to find good homes
in companies like Frank Schilling's Internet
Traffic, Parking
Crew and Rook
Media, with experienced operators
like John Smrekar, Nico Zeifang
and Ash Rahimi respectively meeting
compliance to our valuable upstream
providers."
|
"Innovation
is driving increased earnings and
significantly more opportunity than was
typically associated with parking solutions of
the past. A new market has emerged where all
traffic - premium or low quality, when scored,
optimized and matched - has a home as
part of the larger ecosystem. Domain operators
that did not adapt to compete in this
ecosystem fell behind or are closing their
doors," Boshoff observed.
"To
service all qualities and volumes of supply,
many operators are cooperating by arbitraging
traffic amongst each other, expanding possible
coverage through multiple sources of demand.
This allowed these operators to grow supply
horizontally, as well as outside of direct
navigation and domain traffic. Demand side
|
PPC
image from Bigstock |
|
expansion (outside of traditional
geographies, the domain channels and
typical XML feeds) grew significantly, which
is the reason “parking revenues” have not
suffered a more obvious decline," Boshoff
added. |
"Yield
management and quality management became more
important, forward looking operators invested
more resources on engineers, technology as
well as customer service staff to meet the
needs of more intelligent and sophisticated
supply side operators and publishers,"
Boshoff concluded.
Debra
Domeyer, CEO,
Oversee.net
|
Debra
Domeyer
CEO, Oversee.net |
Oversee.net's
portfolio of companies includes one of the
pioneers of domain monetization - DomainSponsor.com.
Oversee also produces the annual Webfest
Global conference, with the next
edition coming up February 5-7, 2013 in
Santa Monica, California. Oversee's
personable CEO and Board member Debra Domeyer
told us, "As we began 2012, competition
was strong in the domain space with
players using increasingly aggressive tactics
to move customers to their platforms.
During 2012, we strengthened our core domain
business, expanded our online web business,
hired new talent in areas like mobile, and
continued in our investments in technology.
Oversee.net used it as an opportunity to do
more for its customers by continuing its
investment in technology and optimization.
And, as a result, we experienced the strongest
results in our space that we've seen in
over 3 years," Domeyer said. "Parking
will always be an important part of the
diverse set of alternative monetization
options that we offer to our publisher
clients.
"The move by ICANN into the new gTLD
program |
| resulted in a lot of announcements and
jockeying in 2012," Ms. Domeyer
continued. "I expect there will be
continued jockeying through 2013 as new gTLDs
get firmed up. This is already resulting in a
lot of competition for the aftermarket
buy/sell." |
"Alternative
monetization, another key area of
opportunity, was website build-out. We
are fully engaged in online web businesses.
Our owned and operated consumer businesses in
the travel, consumer finance, and shopping
verticals are great examples of the value of
e-commerce sites in providing new sources
of revenue. Online web businesses are a
substantial financial component of Oversee as
evidenced by our many web properties including
ShopWiki.com, Compare.com, Creditcards.org
and Airportparking.com. These
businesses gave us unique insights
into what kind of traffic advertisers want,
how they want to measure it, and how to get it—data
which is invaluable as we “discover”
alternate forms of monetization. With
these businesses, we continue to demonstrate
our ability to grow alternative monetization
for ourselves, domainers and our business
partners," Ms. Domeyer said,
"Then there is a
whole suite of accelerator services
that accrue to these websites. This investment
in build-outs yield additional benefits in
traffic acquisition, conversion data, email
marketing, and lead gen among others. These
moves have positioned Oversee for a very
positive 2013."
|
"At Oversee.net, mobile is a key trend
for us and has impacted our business strategy
for 2013," Debra continued. "Mobile
traffic is growing incrementally and we see as
much as 25% of our traffic being
mobile. Our goal is to work with domain owners
and mobile business partners to identify their
mobile traffic by device type and expand
mobile monetization for direct navigation
traffic. In the next few weeks, we will be
announcing a new mobile app to increase
revenue streams." |
|
"Understanding
and monetizing mobile traffic will provide a quick
revenue boost for publishers. Mobile will
remake the roster of industries and segments
that the Internet and mobile devices are
currently in the process of re-imagining,”
according to TechCrunch’s reporting
on the Internet Trends Year-End Report,
presented by Mary Meeker, partner
at Kleiner Perkins."
"We are building
out a comprehensive mobile strategy including
new apps, responsive web and apps in support
of our consumer brands, and a set of
monetization products for our
publishers. By helping our publishers
understand and work with this new technology,
we’ll bring added value and help them to
increase their payouts," Ms. Domeyer
said.
With respected to
domain sales Ms. Domeyer said, "We
believe the aftermarket will improve in
2013. We continue to be an active and
aggressive buyer of domains and our
owned and operated portfolio is one of the
largest in the industry. Having our own
portfolio gives us the added advantage of
being able to test our alternate monetization
technologies in a real-world technology
environment. We can immediately see if a new
optimization technology works."
|
Brand
image from Bigstock |
"Another trend in
the aftermarket is the recognition that a
domain name is more than just a domain. It can
be a powerful brand. People are
beginning to understand that the right domain
name has many advantages in promoting both a
business and making it memorable. Witness the
sale of the domain, SnapChat.com, which
is now being built into an explosive new
business as well as our purchase of the domain
AirportParking.com as a major domain
brand for our web travel business."
"Utilizing the
right domain names in our portfolio as brands
to build out new online businesses is a great
opportunity for us. As I mentioned, our
consumer businesses are successful in three
key verticals: retail, travel and financial
services. We expect these to continue their
growth and add niche sites to capture more
consumers, adding to the value we provide to
advertisers. Our focus is on
|
|
marketplaces that disrupt legacy businesses,
compelling consumer products, "push
commerce", social collaboration, mobile
innovation, and local opportunities,"
Domeyer said, adding "We are building a
suite of accelerator services to speed up our
development including traffic acquisition,
monetization, data, and infrastructure
services." |
In closing she added,
"The Webfest
Global conference is just a week
away. It’s a great way to start the
New Year- network, learn and have fun.
The agenda has compelling content with topics
that range from new gTLDs, alternate
monetization strategies, and negotiating a
fair domain price to SEO strategies and
traffic acquisition using PPC, Affiliate and
Social Media. And we have a full day devoted
to mobile: Discussions will focus on engaging
and converting mobile users to acquiring
mobile users on a restricted budget. Don’t
miss dinner under the Space Shuttle
Endeavour or the Magic Castle
Farewell Dinner Party. There are many exciting
initiatives in motion which means that 2013
will be a significant year of growth for
Oversee!"
Jason
Miner, Chief
Operating Officer, NameMedia
NameMedia's
domain sales platform Afternic.com
is a household names in the domain industry.
The company's COO, Jason Miner told
us, "One of the milestones of
significance for NameMedia this year was surpassing the
half-billion dollar mark in domain
transactions that we have enabled as both
buyers and sellers. Given the accelerating
pace of the industry, we think it's
reasonable to set our sights now at the billion
dollar milestone—a number that few
would have imagined possible when this
company and its predecessor BuyDomains
got its start over 10 years ago," Miner
said.
|
"While
we continue to be active domain buyers—we've
always believed that having one of the largest
portfolios gives you the best opportunity to
understand and capitalize on industry changes—we
are also proud that the fastest
growing part of our business is
generating revenue for other domain investors
that use the Afternic platform. A key trend
that has driven that growth is the added
interest in and awareness of the secondary
domain market to a broader class of potential buyers.
That was what drove us this year to launch a
new platform: NameFind.com,
which enables someone looking for a new
company name—a key target market for the
domain secondary market—to see available
domains in the primary market, the secondary
market and all the social networks at one
time on one site," Miner said.
"This
is also what has led more than 100 registrar
resellers to adopt the Afternic syndication
platform to put secondary market domains right
alongside primary names in the purchase path.
This means that more than 80 million
people looking for domains each month can see
relevant names from the secondary market. We
believe this level of exposure will not only
increase the sales velocity of secondary
domains, but expand the supply of available
|
Jason
Miner
COO, NameMedia |
|
names as more and more people understand and
participate in selling through the secondary
market. This makes the market truly mainstream,
going well beyond the historically insular
number of participants—and gives us
confidence that that billion dollar goal is
within reach.
" |
"Another
trend we noted was the misconception
that the market is binary: that is, either you
sell your names through someone landing on
your domain and clicking through to a sales
link and a personalized negotiation, or you
sell your names through a distributed platform
like Afternic. The misconception is not only
that you have to pick one way or the other,
but also that the latter approach commoditizes
your opportunity and results in lowball offers
that aren't worth chasing. This misses the
bigger picture: as any market matures, it
segments. We've never made the mistaken
assumption that only one approach is
appropriate for a market of this size and
diversity. To use NameMedia as the example:
our sales team day-in and day-out deals with
buyers who arrive via sales link to domains in
the network and require education and
persuasion—skillful salesmanship—to close
the sale. At the same time, we tested fixing a
discount price with the domains on our
new DirectDomains.com platform
this year and saw a triple-digit increase
in sales velocity with only a modest decrease
in average selling price." Miner said.
"The
point is, some buyers will indeed find your
name through a direct type-in. But many
more buyers will go to a registrar looking
for a name and be introduced to the secondary
market through suggestions of names that are
relevant to their search. To expect to scale
your domain sales solely through direct
type-in traffic is akin to relying on PPC
revenue from type-in traffic. We know how that
turned out!!," Miner noted.
Tessa
Holcomb,
President,
DomainAdvisors
|
Tessa
Holcomb
President, DomainAdvisors.com |
DomainAdvisors.com
has emerged as one of the domain industry's
top brokerage firms under the direction of
company Founder and President Tessa Holcomb.
Ms. Holcomb said, "The buzz of the new
gTLDs surfacing in mainstream media has
definitely helped to increase general
awareness about domains and online
marketing trends in general. Just last week,
on the local news, I heard the reporter
referring to Google searches
increasing for the term, “flu” during the
current epidemic. For domain brokers, this is
a very positive shift as such references in
our sales pitches, although common, are, more
often than not, associated with a lot
explanations and hand holding while we walked
someone through the importance of factors like
Google search volume / trends, CPC, organic
placement, etc. The result of this exposure
just means more of the decision makers,
whether branding agencies, marketing managers,
CMOs or CEOs are finally putting two and two
together and seeing how the right domain
really does matter," Ms. Holcomb said.
"In
addition to a great year for premium
domain sales, another positive outcome of this
awareness was a significant increase in the
acquisitions market in 2012, which I feel is a
direct result of this “newfound knowledge”
|
|
and the quest to find the perfect domain for
their business. In the past, more buyers
seemed to satisfy themselves with an inferior
name that was easier to acquire. In the last
12-18 months, business leaders seem to be much
less willing to settle and significantly more
aggressive in their spending. This, combined
with some of the biggest portfolio owners
being more willing to negotiate, created
the perfect storm for domain brokers who
were ready, able and willing to a) get a
seller to respond, b) endure intense
negotiations and c) get the deal done!" |
"If
the first few weeks of 2013 are a sign of what’s
to come, I’m predicting another
strong year for both premium .com domain
sales and acquisitions with even a larger
number remaining private. We will also see
larger companies acquiring names to add to
their arsenals for future use, or even as a
defensive measure, not necessarily based on an
immediate need. I also see a strengthening
market for additional TLDs including .org
and .net domain sales. And, while the
highly anticipated launch of new gTLDs this
year will definitely stir things up a bit, I
don’t see this having a significant impact
on six and seven figure .com sales, which make
up the majority of DomainAdvisors
revenue," Ms. Holcomb said.
| "We
can also count on seeing more gTLD
consultanty firms who are capitalizing on
the opportunity to work with applicants to
develop strategic business plans, marketing
objectives and sales strategies. However,
because a lot of these firms are made up of
non-industry professionals, I anticipate
opportunities for companies and individuals,
with proven successes within the domain
industry, as applicants look to them for
guidance." |
|
"I
also feel that Demand Media’s acquisition
of Name.com set the stage for a year
of strategic partnerships, collaboration and
additional acquisitions. There are so many
great companies and amazing people in our
industry, each with unique strengths and
offerings and I foresee another year of
working, together with our partners, to bring
several mutually beneficial opportunities to
fruition. The DomainAdvisors approach is based
on the trusted relationship of our brokers and
their clients with our strategy being to
maximize the combined experience, contacts and
expertise of everyone on our team to help them
realize their goals. I wish everyone the best
of luck in realizing your own goals in
2013!," Tessa said in closing.
|
Coming
up on Page 3:
|
|
You
will hear from a well-known domain
industry entrepreneur, a developer of
top tier generic domains, a leader in
alternative monetization, a noted
domain attorney and an industry
pioneer who has founded multiple
domain business services. Continue for
exclusive commentary from:
-
Morgan
Linton
Linton
Investments
-
Andrew
Miller
Digital
Entrepreneur
-
Braden
Pollock
Legal
Brand Marketing
-
Howard
Neu
T.R.A.F.F.I.C.
& NeuLaw.com
-
Paul
Goldstone
DomainIt.com
& Others
|
On
deck - Morgan Linton
|
|
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*****
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