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April 03, 2015

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The Eric Rice Story: How A Displaced Domain Executive Survived (and Thrived) Despite Domain Industry Consolidation
Page 2

Rice played a key role in turning BulkRegister into a registrar that attracted many professional domain investors (and in turn attracted the attention of new owner Demand Media). “BulkRegister cares more about the customer and the customer’s ability to manage domains and the security of the domains than anything else. That is what made us exceptional. We introduced 25 new management tools and features in the two years before the acquisition, most of which were directly based on feedback from BulkRegister members.  People could really see that what they told us they needed they received, " Rice said.

“It’s interesting that when I wanted to start charging a $99 annual membership fee I was told that nobody would pay it. The reality was that nobody had a problem with it because of the great value they had with the BulkRegister system and support. People managing domains worth thousands and millions of dollars will pay for features. It’s a real opportunity for registrars right now."

Eric Rice
February 2007

"Many registrars seem to think about their client's domains as a $7 commodity while their clients think about the domains they own as assets worth millions of dollars.  In many cases it isn’t even the value of the domain but the business built on that domain that has value.  Who would keep valuable domains at a registrar that has poor tools, poor support and poor security?  Many registrars need to wake up and understand just what it is they are handling and the value they can provide to their clients,” Rice said.  

BulkRegister’s development of a sophisticated domain aftermarket was undoubtedly a key factor in eNom and Demand Media’s desire to buy the company. “Helping to orchestrate BulkRegister’s foray into the domain aftermarket was extremely rewarding and one of the most interesting things I have done in my life," Rice said. "The registrars sit in an incredible position.  It was amazing how a small tweak to a process could improve revenue dramatically across our portfolios.”  

“Some registrars just don’t seem to get this aftermarket they own or how to capitalize on it. The right strategies could make them worth 5-10 times what they are worth today, maybe more in the long run. There is a preoccupation with registrars to discount the ideas of others and just work in their own little world. In the domain aftermarket space it just seems to get even worse.  It is hard for some of them to grasp that each of them has a media and advertising company that can be woven right into the model.”  

Due to contractual requirements, Rice is not at liberty to say much about the sale of BulkRegister but he did say, “We set out to sell BulkRegister when the valuation came to where we wanted it, so it was no surprise.  It did happen faster than we expected but so did our aftermarket.  Demand Media purchased a good business and I’m pleased that the BulkRegister brand will continue to exist.  It’s a good situation and everyone’s hard work has been rewarded."   

"I am still working with BulkRegister founder Tom Cunningham and we plan on investing right back into the domain and internet space as the right opportunities come alone," Rice said. "Tom and I and our team developed a franchise model in the web development and marketing space several years ago called Truepresence. That business unit has a new management team and is growing rapidly.  Tom also has several other businesses that he continues to operate including his new data center at Baltimore Technology Park." 

"The BulkRegister sale allowed me to take my stock equity in BulkRegister and move it into domains and domain related businesses. I am really enjoying developing new ideas that are already bringing in lots of revenue for myself and my clients," Rice said. "It was probably a good time for me to get out on my own as the opportunities are considerable. Advising hosting companies, registrars and domainers on how to add even more value in the domain aftermarket is the crux of my new consulting practice, Domains For Media LLC, so I look forward to remaining intensely involved in this area and I hope that registrars and hosting companies start thinking and improving.  We bring them ideas they may have never thought of.”  


Rice (at right) chatting with two friends who also have Maryland connections, Howard 
(left) and fellow Baltimore resident and registrar owner Richard Meyer (center)

"I don’t think some registrars are maximizing the revenue they can make in the aftermarket. I know from my work with several of them that a registrar or hosting company can make $2.50-$4.00 per year in pure profit for each domain name they manage as a registrar or reseller. That means a registrar with 1,000,000 domain names under management (not to be confused with names they own) should be adding at least $3 million per year to the bottom line," Rice said. "These are astounding numbers but easily attainable.  People sometimes look at me cross-eyed when I talk about numbers like that but it is a reality for registrars and even hosting companies. It’s exciting to apply my knowledge to these companies and see immediate results when they follow a proven process.”    

Given his recent success it would seem unlikely that Rice would return to another company’s executive suite, but he doesn’t rule it out completely. “Most likely I will be on my own although you can never tell in this industry," Rice said. "That’s the beauty of the whole domain industry – you don’t have to work for someone or be a huge company to create value and do extremely well financially.  One good idea can set your sails on fire – quickly.  Just look around.  I love the innovation.  Whether it’s a new parking company doing innovative things or someone building tools for domainers, something new seems to pop up weekly…and many times it actually adds value overnight.”  

"It seems to me that the later you got into domains the more innovative you are or have to be," Rice added. "I find some of the most interesting conversations at shows like T.R.A.F.F.I.C. with people who are just a year or so into it and who are making big money.  There are just so many avenues including selling services to the domain owners themselves to make your mark in this industry.”  

While domains have enjoyed a huge surge over the past couple of years, Rice believes the bull market will still be running long after you and I are gone. “I think in 80 years the chart for domain performance will really look like the housing market for the last 80 years.  You will see some little blips from changes in technology, economic recessions and other things but over all you will see steady increases in the value of good domains,” Rice said.   

“Let’s take Cameras.com (purchased for $1.5 million in 2006) as an example. Some might say it was a lot to pay for a domain.  I say, “who cares - it will be a cheap price in ten years!”  Cameras have been cameras for the last 100 years and will be cameras for the next 100 years.  You might not monetize cameras.com the exact same way in 10 years that you do now but you still own cameras.com and it costs you $7 to keep it up every year.  Your initial investment might have been the only expense you had to start a very lucrative business," Rice said. 

"Now look 30 years down the road when that domain has been paid for long ago and you won’t see much problem with the $1.5 million price.  In fact everyone will be talking about the old days when generic domains were “cheap.”  It is not much different than real estate I bought in 1995. Today’s market prices are the future prices everyone would kill for. In 20 years we will all wish we had bought cameras.com for $1.5 million in 2006!”    

Sig Solares
bought Cameras.com for 
$1.5 million in October 2006

"Of course, that doesn't mean bad domains are worth anything. Some people seem to think that any domain they register is worth something. Many are not. It’s really important, whether you’re starting out or established, to have strategies to get to domains with consistent long term traffic," Rice noted. "Where someone starting out, or even someone with thousands of names already, will find success is in ascertaining which domains they can acquire that have great generic traffic in categories where the traffic will remain valuable for a very long time."

"Another thing for someone to understand is the simple fact that the market is expanding, and so are opportunities and the potential for creativity to result in payoffs.  It used to be there were a thousand or so domainers.  Now you’ve got people coming at it from all kinds of directions and they are finding new and unique ways to make money.  The point is that there are many paths to profitability in the domain space so nobody needs to feel like they have to follow exactly in the footsteps of someone else," Rice said. 

“In the last 12 months I have taught 4 friends to buy revenue domain names. In each case they have built portfolios that are producing revenue of $2,500-$4,000 per month.  They were all new to domains. That itself is a testament to what is possible.  Where else could someone build a revenue stream so fast?” Rice asked.   

Next Page:

  • Why Rice Headed for New Orleans Immediately After Hurricane Katrina Hit When Everyone Else Was Desperate to Get Out

  • How Rice Used One of His Domains to Help Save Thousands of Dogs Abandoned in the Disaster Area

Continue to Page 3 of this story

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