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August 27, 2012

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Backstage at Domain Holdings: How They Are Turning Tier 1 Generic  Domains Like Mortgage.org Into Fully Developed Businesses

By Ron Jackson 

When Advertising.com co-founder John Ferber (who was featured on an episode of ABC-TV's Secret Millionaire series March 27, 2011) and domain industry pioneer Chad Folkening teamed up with Erik Simons to found Domain Holdings Group, LLC last year, big things were expected from the new domain development, SEO and monetization company. Ferber already has one massive success under his belt with the sale of Advertising.com (a company that he and his brother Scott founded) to AOL in 2004 for $435 million in cash and his new partners also have a long history of internet success. 

As expected, that new union, aided by an executive team headed up by CEO Jason Boshoff, is already bearing fruit. The acquisition and development of Mortgage.org on behalf of a major corporate client is a perfect example of the multiple skill sets that Domain Holdings Group, LLC can apply to projects they take on. The Mortgage.org story also offers an interesting case study in the process of turning a premium domain name into a full-blown business that stretches across traditional geographic boundaries.

To find out how it was done, we called on Sean Sullivan, the Director of Tier 1 Development for Domain Holdings Group, LLC, who gave us all of the juicy details in the interview below.


John Ferber, Co-Founder
Domain Holdings Group, LLC

DN Journal: Sean, I understand that acquiring Mortgage.org for your client was an adventure in itself for Domain Holdings Group. Tell us the story behind that.

Sean Sullivan
Director, Tier 1 Development
Domain Holdings Group, LLC


Sean Sullivan: Our client is a mortgage lender in 26 states and until now theyíve relied mostly on more traditional forms of advertising. They approached us with the goal of creating a presence online that would be above any of their peers. That in itself was a great challenge. So it required Domain Holdings to naturally find the best possible domain. Mortgage.com is owned by Citibank and was obviously not going to be an option. In this particular case I believe the .Org extension to be preferable to the .Net so that was our number one choice.

The gentlemen who previously owned the domain is very successful and not a motivated seller to say the least. So the usual amount of time it might take me to close a deal which is typically a couple weeks for a Tier 1 domain took a little more than two months, possibly longer. It was without a doubt the most difficult transaction of my career to date, truthfully though I really enjoy the hunt. So I had a great time taking this one down.

The previous domain owner is west coast based and Domain Holdings is east coast, so it required a lot 

of after hours calls at as late as 1:00AM my time. The most notable part was that in order to close the deal and take possession of the domain it meant that I had to fly to the sellerís location. So I boarded a flight at 6:00AM and landed at his location a few hours later. We met in the lobby of a financial services company and then did the deal with cashiers checks and pushing the domain from his account to mine. Everything went smoothly and afterwards we had lunch and then I caught the first flight back to south Florida. I canít disclose the exact sales price but it is safe to say that it is one of the highest amounts paid for a .Org domain ever.  

It was highly unusual and I did a lot of research into the individual ahead of time. I understand people sometimes not wanting to use electronic escrow services. There have been a few rare examples where one party ends up getting burned. But this ultimately had more to do with him wanting to meet the person he was selling it to and receiving payment in a more tangible manner.

The seller is a great and very honest guy and we would like to do more business with him in the future. Be it another acquisition or a development project.

DN Journal: I understand you will be launching the Mortgage.org site by the time this article comes out. What can you tell us about the company that now owns it and how they will use the new site you developed for them to further their business? 

Sean Sullivan: Our client's goal is to move aggressively into online marketing. They are actually going to rebrand the company under the name Mortgage.org. So it is a very unique situation that you see a company not only put so much in terms of resources (financially) into a domain and website but the fact that theyíre re-branding their entire company under this name, in short it is just tremendous.

Domain Holdings is building a web presence that should have no rival in the mortgage industry. It might sound like hyperbole but in reality I can say with 100% confidence that 

everything from logo design, color scheme to every graphic element on the page has been carefully analyzed. We use data that we have internally to determine what kind of design elements should be put in place to increase conversion ratios. We are able to take a lot of the guess work out of it and it becomes almost a mathematical equation.

All of that critical analysis carries over into the planning and execution in the site build and SEO planning. One thing that isnít provided by internal tools or metrics is the team here at Domain Holdings. A huge asset for me and one thing that is so great about DH is the core team of founders and their experience. John Ferber and his experience and wisdom with regard to what was accomplished at Advertising.com comes into play on a daily basis. Many people donít grasp that John and his brother essentially developed the tools that made display advertising profitable for all parties, not just the publisher.

Chad Folkening, Co-Founder
Domain Holdings Group, LLC

Jason Boshoff, our CEO, has been involved with creating some of the most successful commercial websites launched within the last five years. Thatís invaluable insight and experience. And Chad Folkening, having him as a sounding board is amazing. Chad is someone who is so in tune with consumer behavior it is uncanny. But I think thatís reflected in his incredible portfolio of domain names. I think a lot of people donít know about the names that heís sold off and that have been turned into monster websites.

So my job directing the development on project like these is much more manageable having the three people mentioned above on my team as well. Then the rest of the team at DH are all leaders and experienced individuals who each play a major part in bringing this project from concept to completion.

DN Journal: Iím sure this domain receives steady traffic, though the .com version would obviously get more. Some would worry about bleeding traffic from a developed site to the .com counterpart, but do you see some branding and service possibilities with the .org version that could balance those scales?

Sean Sullivan: It isnít something we didnít take into serious consideration. But we have put a plan in place and some measures have been taken with regard to design and branding. Mortgage.com is a developed site owned by a major bank, in fact a competitor to our client. That being said, just because Citibank owns the .Com, I donít think that means everyone else essentially should pack it in and let them dominate. Our goal is to build Mortgage.org in a way that completely separates it from any other lender in the marketplace. Weíre doing exactly that. This is not going to be some run of the mill mortgage lead gen site.

Additionally our client (and this is quite fortunate for DH because it makes our job easier) is not your average mortgage lender. They are involved in a lot of charitable causes and education programs. In short they are an advocate for American property owners and prospective property owners, many of whom are struggling. It is a very important thing for them and something that is a major part of their corporate culture. Theyíre taking on some new initiatives with the goal of helping consumers avoid falling victim to a lot of the bad advice and information that is out there. Our client is a for profit business, but because of their initiatives they are presently involved with and the new ones theyíre taking on I think that the domain Mortgage.org is going to work out perfectly for them.

From an SEO standpoint there is no issue there at all. In fact we are very confident that this domain is going to do incredibly well in all search engines. We truthfully feel that we should have no issue with being able to rank above Mortgage.com in time. 

DN Journal: I understand the development of the site will be an ongoing project that will continue months after the launch date. What can you tell us about those plans? 

Sean Sullivan: If you are a major lender re-branding to a new name is not an easy as updating your records with SunBiz. There are a lot of regulations and red tape. So weíre launching the site and continuing on with the development and SEO. In late June our client should be ready to make the official announcement of the corporate rebrand under the name Mortgage.org. Until then it is business as usual and the SEO and development moves forward.

Specifically with regard to the continued development, our plan is to do everything in our ability and our clients budget to make Mortgage.org an incredible success. Our goals for this site are quite aggressive. That being said, we feel that in 12 to 18 months Mortgage.org will be a site that is ranking within the top 10 of all major search engines for most if not all of the terms associated within this industry.

DN Journal: This is an interesting point in time for your client to be investing in this name and 

Development will be an ongoing process.

category. Home sales remain stagnant and mortgages are hard to come by. Did they have any reservations about pouring resources into this category given the current state of the market?

Sean Sullivan: Our client recognized that a generic keyword match domain name is an asset with a quantifiable value. A value that with effort will increase moving forward. A business owner canít go and resell his or her yellow page advertising from two years ago. A website built off of a domain name like this, you could sell very quickly even in a down economy. 

Two years from now I believe that our client is going to be in a very unique position. They will own a domain and website that accomplishes two significant things for them. Number one, the site will generate leads on a daily basis that will help increase their revenue for their core business as a mortgage lenders. And two they are going to have an asset that is going to generate revenue from the lead flow that comes in from the states that they are not a lender in. My prediction is that this site becomes a major target for acquisition in two or three years by any number of financial institutions or lead generation companies. 

DN Journal: When it comes to developing a domain owned by a partner, like Mortgage.org,  how  are costs, revenues & equity divided up?

Sean Sullivan: Well in the case of Mortgage.org, our role is solely as the developer. Our client retained us in order to find the best possible domain and then implement the best development strategy to meet their specific goals. So thatís been our role, to acquire and then develop this domain. This is certainly a property we would like to have a piece of, but that's not always an option as is the case here with Mortgage.org. But we respectfully recognize and accept that. Regardless if we have equity in a project or not our efforts are always 100% and equal. 

John Ferber

John Ferber who has obviously had great success in past businesses and truthfully has no financial need to start another company always tells us the following: "Our reputation as a company and as individuals within it, that is more important than anything else. That is why we do everything within our abilities to deliver on the goals and expectations set by our clients." 

That is a corporate mantra that is carried and followed through on daily by every single team member at DH. I know this can sound a little like an advertisement, but it is not. We all love our roles and this is the first company that I have ever worked at where I've seen such passion, energy and general enthusiasm on daily basis. 

With respect to partnership arrangements it varies. We have many domain owners who come to us seeking to develop their assets beyond what our Rapid Domain Builder platform can offer. In some cases we will take an equity position and the terms of ownership it can vary greatly. I can tell you that we are extremely fair and we want to structure any deal so that the domain owner benefits more than anyone else. Weíre going to be around for a long time, and 

weíre more interested in taking on a large number of great projects and having a smaller piece in them then trying to get a huge piece of just a few deals. I think that we wouldnít have the respect and repeat business of some of the most successful individuals in the business if we were too aggressive in our joint venture relationships.

Sometimes we will take a position where we do all of the development (and defer all costs) in exchange for equity. In some cases we take a very small percentage in exchange for remaining on as the entity that will continue to manage the domain asset. However the deal is structured thereís always transparency, deal terms are straight forward and Domain Holdings is incentivized to make the domain/website more successful.

DN Journal: Do you have any other development projects of this magnitude in the works?  

Sean Sullivan: We do in fact. Weíre taking on a number of high profile sites as a joint venture, straight development or simply as for an SEO campaign. Not all of them I can talk about just yet. One I can discuss is that weíre in a partnership with Domain Capital on Podcast.com. Iíve personally been working extremely hard on that one. Weíre going to re-launch the site with an entirely new monetization model and some major design changes as well. I can tell you that we havenít even officially announced the product offering publicly and weíre already on pace to increase revenue by 50%. 60 days from now the site and the amount of traffic and revenue will see explosive growth. 

On the smaller end of things, LLC.Net has recently contracted with DH to run the life cycle management of that asset. The vertical presents a lot of challenges because of the complexity, but DH was able to deliver a site that is unlike any other. To my knowledge it is the only example within this space that is a white label solution for LLC and incorporation services. Certain verticals don't give you much ability to create a turn key 

solution. We had to do a lot of business development and research to make this one work, but we accomplished the goal and our client is very happy. Itís a project that looks extremely promising and I can confidentially say that the site will be one of the top providers of LLC incorporation services in the US very soon. Itís also another example of something other than a .Com being a great success.

Thereís another one that I canít get into just yet but itís going to be huge. This is 100% about the life cycle management of an asset. In this instance a huge corporation approached and said we own ďXĒ domain. ďYĒ and ďZĒ represent the current earnings and the approximate intrinsic value. Take two weeks, all our data and figure out how we can do better. Because in some cases it isnít about immediate monetization or how you flip a switch and earn 10% or whatever amount more. It is about doing a ton of research and finding a path, one that will increase revenue, increase overall value and ensure longevity of that revenue and the asset's value. That is the 30-second pitch of domain life cycle management. Thatís becoming a big part of our business and focus. 


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