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Rick
Schwartz,
Co-Founder, T.R.A.F.F.I.C.
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Rick Schwartz, AKA "The
Domain King" may be best known these days as the
Co-Founder (along with Howard
Neu) of the popular T.R.A.F.F.I.C. domain
conference but the colorful and often controversial South
Florida based entrepreneur was enjoying major success in
domains long before T.R.A.F.F.I.C. staged the first major
domain conference back in 2004. The industry pioneer has
made several landmark seven-figure sales and is a master
negotiator who has also managed to retain an equity interest
in several of the businesses that have been built on names
he sold. Outspoken as always, here is Rick's take on 2011
and the year to come.
Rick Schwartz:
I think by far the biggest thing to happen in 2011 for many
domainers was Frank
Schilling opening up his own parking company, InternetTraffic.com
and operating as a quasi co-operative in the way they work
and taking the “Cream of the Crop” domains and their
traffic away from the more established companies. In a way
that disrupted things and we are still seeing the
fallout. From my own experience and those I have talked to,
payouts more than doubled overnight. Draw your own
conclusions. For me it validated what I have been saying for
years about how are “Partners” were taking the LIONS
SHARE of OUR earnings.
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Rick
Schwartz |
I am hoping that Google is learning a
significant amount of new things based on a higher quality
of domains and the traffic they actually produce. The days
of spamming search engines trying to get more traffic to a
domain name are over. The “Trickery” phase
of domain “Traffic” is done and that allows
payouts to keep rising as the economy improves.
| The next thing would be the Overstock.com
and O.co debacle which they seem to be repeating in
2012 with the same mistake. Let me be 100% clear. It’s not
that you can’t use or brand |
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Image: digitalart
/ FreeDigitalPhotos.net |
another extension. You can do
that. BUT…….You MUST own the .com
counterpart. It’s just that simple.
One without the other is a costly mistake. I don’t
care if is is .co, .net,
.xxx. Whether
intended or not. The more success, the more costly that
MISTAKE will be and continue to be.
It’s just about learning from “Other People’s
Mistakes” and not paying the same price to learn what they
did. They can
either “Overpay” now….or they can wait and overpay 100x
or more. THEY control that. They will just kick themselves
every morning or they can remain ignorant. Doing it as this
point, is malpractice in my book. Inexcusable.
If they ever knew how much business they were pissing
away, they would certainly understand my comment. But
ignorance can be a wonderful thing. I guess.
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As for 2012, there is a glut of
domains on the market. That drives prices down and when the
mortgage is due, you don’t worry about that. You just
liquidate what you can and what you must if you are in that
position. Often times that will take your best domains away
as they are the ones in demand. But that is what makes a
market and that is why I think 2012 will be a pretty decent
year overall. Lots of deals will be made. Just as they were
in 2011. Things
are heating up.
I think no matter what you do or what
profession you are in and maybe even no matter where you
are, the U.S. Presidential Race will be driving a lot of
things. Election years as a rule are usually very good years
financially. Lots of business being done and 2012 should be
no exception.
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With the new gTLD’s in the news it is
driving domain names right smack into the mainstream
in a very big way. I see it as a bullet train coming
through. The
dotcom counterparts are going to go through the roof.
But gTLD’s are getting some heavy scrutiny and who
knows if they will even see the light of day. It
may be a very rocky road. If any true independent
organization looked at it, they would see it is nothing but
a big money grab by mostly ICANN folks past and
present that have their fingerprints all over it.
They have the responsibility for looking out for the
interests of the public and sadly they have only looked at
their own interests for the most part. I
have lost count on how many “Second comings” of dot com
have hit the market in the past 25 years.
The list is long and maybe will just get much longer.
If .TV, which would be a natural, is still breaking out
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| so many years, I
think that indicates the uphill climb for .whatever.
So from a “Domain Investment” standpoint I don’t see
much. From a registrar point of view, they just get to print
more money so there won’t be any opponents from that
quarter.
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We are going from a well defined type
of “Interstate Superhighway” to a basically unregulated
and not well thought out road system with no stop signs,
intersections or exits. It may fail.
And if it succeeds, it will fail because of all the
unforeseen pitfalls let alone the pitfalls that have been
identified and yet to be addressed. That is why the word
“Clusterf*ck” comes to mind.
Is it a good thing? I want to be on
record with “No.“ It
is set up to benefit insiders and registrars at the expense
of everyone else and frankly, it is shameful and will only
bring confusion and needless expense on many levels plus all
those pitfalls and unintended consequences.
They are about to unleash a mess.
A costly one on
may levels and that is why you see so much pushback. There
is absolutely no shortage of viable domain names. An
infinite supply of .coms alone. What there is a shortage of
is cash and ethics in the guys that dreamt this all up. You
have heard of the bridge to nowhere. This is the bridge to
everywhere but goes nowhere unless there is meaningful and
needed content and even then, they are going to have
significant blowback. Not from me. From their own customers
and those unforeseen or ignored pitfalls. Confusion
on steroids.
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That all said, I will never fight
progress because even if the progress they TRY to create
goes in the wrong direction, the public and business will
reject it. I will take financial advantage of whatever
eventually happens. I’ll
deal with the reality on the ground whichever way it goes. Opportunity
comes in many forms. Some are very short term and most
are not visible to the naked eye. Edsels have more
value today than they did in 1959.
.Com defines the net like 800 defines a
toll free phone number. You can come out with 100 Toll Free
extensions, but it will take 1 or 2 generations or more
before the 800 number moniker even starts to go away.
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Image: Salvatore
Vuono / FreeDigitalPhotos.net |
Lastly, I think Lead Gen will
basically replace the minisite and is a much better more
useful, much more viable model when adding qualified
traffic. Selling customers is what the net is all about.
Transporting those customers to the right place. Then
getting paid an APPROPRIATE and scalable
amount for that lead.
Some leads may be worth a penny. Some leads may be
worth hundreds
or thousands. It depends what you are selling and it was my
original premise when getting into the domain business in
1995-1996. I say so right on eRealestate.com:
“The
value of a visitor is directly proportionate to the product
or service you are selling.”
So FINALLY the net has figured it out.
What was obvious in 1995-1996 finally becomes a reality in
2011-2012. All those WASTED sales!
Bottom line, I think 2012-2013 is
going to be a fantastic time for domainers and those
positioned well that don’t wake up having to have a fire
sale everyday. This
is the start of domaining, the beginning point. It
took a recession and the survival to unleash the future we
are about to see.
The
Castello Brothers,
CCIN.com
Brothers
Michael
Castello and David Castello of Castello
Cities Internet Network, are giants in the
geodomain space (owners of Nashville.com, PalmSprings.com,
Acapulco.com and many others) and also hold many
premium .com generic domains including Whisky.com, Bullion.com
and Daycare.com). Development has always separated
Michael and David from the pack. Most of their marquee
domains have been developed into profitable business
websites. With their warm personalities and willingness to
share the keys to their success many consider them to be the
best ambassadors the industry could have. Here is how what
they felt were the key trends in 2011 and what they expect
in 2012.
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Michael
Castello |
Michael
Castello: In
2011 we witnessed ICANN’s final push to launch the new
gTLDs. It has taken quite a while from its inception in
2006. There has been so much push-back for a lot of reasons,
especially trademark holders and those who believe it could
seriously weaken the DNS root. While I believe ICANN will
find a new revenue stream, it raises the question of why we
need thousands of new gTLDs when those that have been
approved in the past had only marginal success.
In
my opinion, ICANN is trying to manage a marketing
quagmire with the new gTLDs. They've bet the house
trying to prove that they can be independent, and vested
their credibility in approving and releasing them. They will
eventually accomplish it, but at what cost? They and
so many others will be struggling to provide stability. They
will have no room to do much else over the next few years.
Domain names are concept driven, and the majority of the
public understands .com as “the Internet”, just
as 1-800 means “toll-free”. That is simple, and drives
impulse traffic directly from the consumer to you.
Of
course, it being 2012, I can’t help but comment on the
supposed end of the world! What the Maya may
have foreseen is the
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| move
from the industrial revolution
into the virtual revolution. I deal with a lot of
small businesses and families, in small-town America and
around the world. It amazes me how they are beginning to
understand the importance of “owning” their identity
in a world that is becoming vastly redundant and over
saturated. |
It
is one thing to use YouTube, Facebook, or iCloud to make
life easier, but in the end you don’t own your virtual
identity – they do! An understanding is evolving,
that a domain name or email brand can give you independence
from ever-growing monopolies. Today, you can forward your
domain name to your Facebook page, or point your email brand
to your Google Mail account. We could all be using IP
addresses instead, but a memorable domain name is what
matters in the name game. That is the reason the domain name
system was created. It can be as simple as Nashville.com or
KathysNailSalon.es. In their respective markets, they are
memorable addresses. If you own a memorable name, the
future is yours.
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David
Castello: I
don’t have much to say about 2011 because much of my
perspective was limited from behind a DW drum set! (Editor's
Note: David, a professional drummer, relocated to
Nashville last summer to back a very talented up and coming
new signer/songwriter, Bree,
that I think you will be hearing a lot about in
2012).
I do
have a 2012 prediction I’d like to share though.
From 2012 thru 2014 our industry news will be overshadowed
by the forthcoming tsunami of new TLDs. This
will prove to be the most significant era in the domain name
industry since 1998 thru 2000. And in many ways,
we will have gone full circle. Though the vast
majority of new TLDs will be dismal failures,
particularly for speculators, a few may succeed (though none
will touch the popularity of any of the legacy TLDs and most
of the ccTLDs). Regardless, the most important element
here will be the millions of new people, businesses
and investors who will become introduced to our industry.
And in our industry, as in any industry, the more the
merrier.
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David
Castello recording
at the
House of Blues Nashville's Studio D
(January
2012) |
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Look
for 2012 to feature numerous “Death of dotCom?”
stories. Successful veterans in this business will
easily recognize this to be the false echo inside the trough
before the wave, but it will ring loudly – much as it did
in 2001. 2013 will feature the actual releases
followed by countless advertisements, sponsorships and
launch parties for each new TLD (think dotCo and DotXXX
multiplied by five hundred). 2014 will be the year of
registration renewals, the dust will settle, the scales will
fall from the public’s eyes and the largest reality
check in our industry will occur. My
recommendation is to simply stock lots of popcorn and enjoy
the ride. There will never be another like it and
those legacy TLD and premium ccTLD owners who held fast
and ignored the siren’s call will awaken to see the sun
rise brighter on their values than at any time in our
history.
Michael
Mann,
MikeMann.com
You can't pigeon hole Michael
Mann. Yes, he is a domain investor/developer but
so much more than that. He was founder of BuyDomains.com,
an enormously successful aftermarket sales platform that he
sold to NameMedia (he now has a new sales site at DomainMarket.com).
He is a principal in a premier portfolio of developed .com
domains including Phone.com and SEO.com, he
has written a book - Make
Millions & Make Change! - and he has
given millions of dollars to charity through his Grassroots.org.
Here is what he had to say.
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Michael
Mann |
Michael Mann: The
persistent drop in random PPC values plagues the industry,
as well as broke potential domain buyers due to government
induced economic problems for those small businesses and
entrepreneurs. This however places more domains on the
market at lower prices, perpetuating the thin market with
huge spreads, leaving opportunity for today's investors
to capitalize when people realize the truly excellent value
to their companies of contextual keyword .com domains
at ever increasing FMV.
New TLDs and ccTLDs and
another year confirm that .com will keep being king
whenever weird stuff happens like new tlds and ideas, then
real premium .Coms will always be the "flight to
quality" and keep going up in value, good for ecommerce
or investing.
As far as people saying the
phone/mobile/search/other bs will replace the web, yes and
no, its all growing like wildfire, and
irrespective anyone building a great app with a cool name
(tens of thousands) will need the .com
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unless they want to make irrecoverable expensive marketing
mistakes by missing their perfect Internet name and good
investment.
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For
2012 - more building sites and apps and completely
new ideas. Scientific A/B and other testing of each
aspect of the site, domain, marketing, conversion,
advertising, etc will give us better guidance how to
dynamically deliver higher converting landing pages in a
world of low PPC and broke potential domain buyers.
Michael
Berkens,
TheDomains.com,
MostWantedDomains.com
and RightOfTheDot.com
Michael
Berkens is a man of many talents. The
veteran domain investor is an attorney, he writes one of the
industry's most widely read blogs at TheDomains.com,
he runs his own aftermarket sales platform at MostWantedDomains.com
and he co-founded a new gTLD consultancy with another
industry pioneer, Monte Cahn, at RightOfTheDot.com.
Michael and his vivacious wife Judi have been fixtures at
domain conferences around the world for years and you would
be hard pressed to find anyone who knows the ins and outs of
the business better than Michael. Here are his thoughts on the year
we are coming out of and the one ae are heading into.
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Michael
Berkens |
Michael
Berkens: No
doubt, the biggest development is the new gTLD
program which will bring a huge spotlight on the
domain industry in general. You will see hundreds of
brands applying to run their own right of the dot extension
as well hundreds of generic extensions, as entrepreneurs,
companies from inside the domain world, even domainers as
investors in applicants for generic extensions. There
will be a tremendous amount of stories leading up to the
close of the application period (April 12, 2012) which runs
only 90 days and after.
I
think domain sales will continue to grow and the
brick and mortar world continues it march onto the net all
around the world. There are going to be a lot of challenges
to the industry falling under the larger category of
regulation, including SOPA
and other bills that might try to replace it, a move for
more trademark protection in Congress, expansion of a URS
type of system to existing domain extensions like .com.
Also, the Verisign contract is up for renewal in 2012
which may cause a lot of these issues to be on the table.
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