Featured in Wall Street Journal · New York Times  ·  ABC News · BBC News ·  CNN · Newsweek · USA Today 


Domain Sales

Latest News


Dear Domey



YTD Sales Charts

The Lowdown

Legal Matters

Letters to Editor

Classified Ads

About Us






Rick Schwartz Takes Off the Gloves: Says Domainers Getting the Shaft While "Partners" Roll in The Dough - More to Come at T.R.A.F.F.I.C. Miami

Howard Neu (left) and Rick Schwartz
T.R.A.F.F.I.C. Co-Founders 

By Ron Jackson 

It has been awhile since I have talked at length about the current state of affairs in the domain industry with T.R.A.F.F.I.C. Co-Founders Rick Schwartz and Howard Neu. The last time was back in January when they were in a group of 16 industry experts that I interviewed for our annual State of the Industry article

With the T.R.A.F.F.I.C. Miami conference coming up October 17-20 at the Loew's Hotel on South Beach - the only T.R.A.F.F.I.C. show that Rick and Howard are staging this year - it was time for another in depth discussion. It started off to be primarily a show preview - and an important one since this is the first event the conference pioneers have put on since T.R.A.F.F.I.C. New York in October 2009 (the four T.R.A.F.F.I.C. 

events that have been staged this year were all produced by Rick Latona under a partnership agreement with Schwartz and Neu). However, the conversation quickly morphed into one covering much broader ground once we started talking about recent changes in the industry and how the current business environment will be addressed at T.R.A.F.F.I.C. Miami.  

Rick Schwartz has always been known for speaking his mind (and frequently ruffling feathers in the process) but compared to past commentary, his demeanor this time around is like comparing John L. Sullivan (the last bare knuckles boxing champion) to Mr. Rogers. The gloves (if they ever were on) are most definitely off now, as you will see in the second half of this article (if you want to fast forward to where the the fireworks start click here and read Rick's responses through the balance of the article). In the exclusive interview below you will see what he and Howard had to say about the upcoming show, their conference competition and the crossroads domain owners currently find themselves at.

DN Journal: When you open the doors for T.R.A.F.F.I.C Miami 2010 on October 17, it will have been a year since the two of you staged your last conference in New York City last fall. It is 
the first time you have had any significant time away from the show business since you started it all six years ago in Delray Beach, Florida. Before we dive into what will be happening on South Beach, tell us why you stepped away and what you’ve been doing in that year off the circuit?

Howard Neu: Well, it has certainly given me a lot of time to spend with Barbara and sip pina coladas on my pool deck. Of course, I still DO practice law and have been pretty successful in representing clients before NAF and WIPO.  But I can’t wait to get “back in the saddle” at T.R.A.F.F.I.C. South Beach and interact with the smartest businessmen in the domain business. Rick and I are really excited about going to Miami Beach for the first time. The art-deco ambience is beautiful and the hotel is world-class.  

Howard Neu & wife Barbara

Rick Schwartz, Rick Latona and Howard Neu
announcing T.R.A.F.F.I.C. parternship in 2009

Rick Schwartz: Truth be told if we were running a business we would have sold out in 2007 or just walked away and got off at the top. But there was a problem. The work that we started was far from complete. Spreading the word of domain names was still something we had not achieved. Folks get burned out. Whether it is from shows or from our high profile M.O., sometimes you can have too much of a good thing and a break is good.

Rick Latona came to us with his idea and we thought that would be a good way to take a 

break, bridge a gap during a tough year, reach out to new folks and keep T.R.A.F.F.I.C.’s position cutting edge by going worldwide. Since that day, DomainSponsor and Sedo have both followed our leads. Now they will have to deal with the pitfalls that we have already been through. Financially, it is not a profit center. So unless you have something to sell, like the companies named above, it will cost a lot of money to put on.

Howard and I take a huge risk with each and every show. When we decide to no longer take that risk, then the industry is at the mercy of infomercial tradeshows as opposed to a domainer-operated show. You may not see the difference now, but you will see it when nobody steps up to say what I am about to say in this interview. But I feel that my mission is bigger than the current landscape. In five years the entire audience will change. The domain investors will remain constant.  But what will change will be our partners, our revenue streams, our earning power, and lastly, our place in the world eco system. Domains, something few knew about 15 years ago, will become THE “It” and “Hip” thing; the greatest ego stroke in the history of mankind besides the actual power that can be unleashed.

DN Journal: This industry is always changing and the conference business is no exception. Just a few days ago, Rick Latona announced cancellation of T.R.A.F.F.I.C. Hong Kong in November - the last of the five shows he planned to do under your 2010 partnership arrangement. In making that announcement he commented on how much the conference landscape has changed in just the past year. What is your take on those changes and how are you dealing with the more challenging environment in preparing for South Beach?  

Howard Neu: Since Rick and I got together with Rick Latona to take T.R.A.F.F.I.C. international, it seems that everybody and his brother is having a conference almost every day of the year. At the time that I am writing this answer, there is a conference in Spain going on, to be followed by one in Tuscany, one in Prague and a Carnival Cruise, all before T.R.A.F.F.I.C. South Beach in 3 weeks. Yet, before we announced doing 6 shows this year, there was nothing on the boards scheduled by anyone else. That tells us that as T.R.A.F.F.I.C. leads, as it has ever since our first show in October 2004, everyone else follows and copies our formula. But no one has been able to duplicate it because T.R.A.F.F.I.C. is the only conference that has nothing to sell except the furthering of domain business and giving every attendee an opportunity to increase their income.

Rick Schwartz: Once again T.R.A.F.F.I.C. is the standard that everyone emulates and copies. Just tick off the list. That is because we follow the future, we follow destiny and opportunity no matter where it leads. Nobody else has that freedom and when the next big thing breaks, it will be presented at T.R.A.F.F.I.C. first. It always has!

Additionally, there was a reason we named it “T.R.A.F.F.I.C.” to begin with. Gas is what fuels a car, traffic is what fuels the Internet. We figured if we ever hurdled the gap we have been facing, then we would be able to attract folks 

The conference calendar has gotten 
very crowded over the past year. 

wanting to buy traffic; learn about traffic; get bargains on traffic. To me, traffic is the #1 commodity of the future. Targeted traffic. WE as a group all know that. But the 6 billion others on the planet do not and when they do, I see a different opportunity. I see retailers coming to T.R.A.F.F.I.C. I see T.R.A.F.F.I.C. as the “Alternative to Google and Yahoo”, going direct to domainers as opposed to the current system.

Many of us have private traffic or lease deal with end users. That will become more common, not less. We are in a position to tap into that when that time happens and Howard and I spend much of our time trying to figure out how to bring those two worlds together.

Domaining is a cottage industry. Folks in the industry need to know what that means. We have an opportunity to break out of that status. I think it is already happening. But it is quiet and invisible. There are several hundred professional and full time domainers. That’s it. Some part-timers will eventually make the transition. Most won’t.

The next domainers will be the mega corporations. They are starting to figure it out, small mom and pop operations as well. What happens the day they figure out that maybe they are paying too much for the traffic they buy and the quality they get? When the focus turns away from 

millions of visitors, to one customer at a time. That will be the point that our world changes. When the question becomes “why is it that the $5.00 click that they pay is the same click that you just got 5 cents from?” When these two groups meet, the domainer will be happy to sell that customer direct for $5.00. Even though the domainer can only provide 300 clicks a month. That still comes to $1,500. They are presently giving others like Google and Yahoo that $1,500 or $15,000 and will end up with only 10% of the results because they will be distracted with the NOISE of the others that they paid those same $5.00 for.

Renegades, entrepreneurs and trailblazers versus the corporate suits: no wonder there is so much tension in this industry. It is a natural rivalry. They both need each other, but one side always takes most of the pie.

DN Journal:  One last question on the 2010 partnership with Rick Latona that took T.R.A.F.F.I.C. to new markets in Canada, Italy and Ireland. What were the pluses and minuses of the arrangement in your view? Also, not to jump the gun with T.R.A.F.F.I.C. Miami dead ahead, but now that Mr. Latona is bowing out of the game what kind of plans do the two of you have for T.R.A.F.F.I.C. beyond the upcoming show? (Editor's Note: After this interview, Schwartz and Neu announced a T.R.A.F.F.I.C. ICANN Retreat Conference will be held in San Francisco March 11-12, 2011, right before an ICANN International meeting begins there March 13). 

Howard Neu: Rick Latona is a sharp businessman, and we were fortunate that he was willing to bring the T.R.A.F.F.I.C. brand around the world. Under adverse conditions of the changing global economy and the ever increasing number of domain conferences which could not be foreseen, he has done an admirable job of which we are proud.  He put together a terrific staff, had great speakers, fun parties and, though attendance was not what we would have hoped, put on quality conferences. We are not giving up on the international scene, but believe that 2011 requires a certain amount of consolidation and return to just U.S. shows. 

Rick Schwartz: Howard and I just care about doing it first class and doing it right no matter what. That isn’t the smartest business decision because we never know if we will make money or take money out of our pocket. I just believe that if you do each step right the end result will be right.

Rick Latona welcoming attendees to 
T.R.A.F.F.I.C. Vancouver - June 2010

Rick Latona took a more business-like approach. He had budgets and looked to keep expenses low. This resulted in a no frills T.R.A.F.F.I.C. People have come to expect more from a T.R.A.F.F.I.C. show.  That was not a bad thing. It just illustrated the difference between the two methods of operation and first class won because now folks appreciate how Howard and I approach things. 

But don’t underestimate the contribution Rick and his crew made to domaining. It takes a lot of people pushing the envelope. THAT is the power and secret of T.R.A.F.F.I.C. and Howard and I facilitate it. We steer it in the direction that we believe to be good for domainers, and not necessarily sponsors that may have narrow views of the future.  If T.R.A.F.F.I.C. is important to the industry and the future, then folks will come and support it. If they don’t, they will just remember what it was and what it did. I am ready to accept the decision either way because I can just as easily start focusing on my own business. My work is not done, but I am certainly not a lone voice any longer.

DN Journal: All right, now let’s talk about what looks to be an event that is going to be something special – T.R.A.F.F.I.C.’s return to South Florida, just a few miles down the coast from where is all started in 2004. I’m hearing a lot of buzz about the people coming, the South Beach venue and the historical significance of T.R.A.F.F.I.C.’s 6th anniversary show. Does it feel like the the stars are lining up for you on this one?

Rick Schwartz: The show has already started on our Facebook page. As I write this, nearly 90 folks have publicly said they will be at T.R.A.F.F.I.C.. I am stunned by how many are plugged in via Facebook. And there are many more who are coming that have not said so publicly. Of course our speakers will give a hint. The buzz, the electricity and the list of who is coming is the best since 2004.

There are some similar reasons for this. There was a lot of frustration and anger in 2004. There is a lot of that as we end 2010. Domainers are not happy with the trends. They feel like they are getting the shaft while our so-called “partners” are rolling in the $$$ we are making for them. That is the foundation of part of the anger. 

They are also mad at Google and Yahoo for buying what I call PIGEON SHIT! They could put an end to garbitrage and Trademark infringing traffic RIGHT NOW if they wanted to. But I believe they are doing the same thing to their customers that Impression Based Advertising did. So I think when they clean this up, then REAL traffic will have REAL value. However, as long as their standards remain this low, they encourage all levels of abuse and don’t do a damn thing for the end user, retailers or anyone else down the food chain. 

I have been hearing for years that they would clean this up. That’s just a pipedream and they know it and should start to address this in a meaningful way. There is a group of domainers who are going to jump start this discussion. This “Dirty Business” starts at the very top. Hard to save the planet and at the same time abuse your own clients. Definitely nothing to be proud of.

Domainers are looked down upon as scum because the two giants have thrown the legitimate guys under the bus in lieu of targeted traffic. The end user pays $5.00 for a click, but 

Rick Schwartz

we get 5 cents and we are supposed to believe that is an 80% cut? I think every domainer knows this is garbage and that it has to change. I believe that T.R.A.F.F.I.C. is going to start a conversation that Yahoo and Google cannot ignore. I have listened to their empty lip service for six years and now it is time for show and tell. What other show would do that?? They can’t!

Howard Neu: Everything about T.R.A.F.F.I.C. South Beach will be fresh and new. We have always been a leader and not a follower and will be putting in new things that have never been seen before in the domain industry. Our keynote speaker is an alumnus of Disney World and Rick and I have heard him before and can assure everyone that his message is profound and lasting. We have a new form of speed networking and attendees will be able to pick the type of persons that they wish to meet on a one on one basis. We have rented all of the pool-side cabanas at the hotel starting Friday, October 15th through Tuesday the 19th, and they will be for the exclusive use of registered T.R.A.F.F.I.C. attendees.  

.CO is putting together the best party South Beach has seen and there may even be a few celebrities added to the mix.  We have hired Model Studio models to service the folks in the cabanas and act as security and badge checkers for the conference sessions. We are adding, as a bonus, Rob Monster’s Swap Fest which was so successful at the EPIK Developers Conference.  The panel for T.R.A.F.F.I.C. Test Track sponsored by .CO will be the best we have had and Rick Latona is going to have some great domains, including .CO domains in the auction.  

Schwartz wonders how much money
companies have lost by trying to get 
away with paying domain owners 5 cents
 for a click that led to a $50,000 sale.

DN Journal: You have always tried to keep your programming topical and I have read some of the comments on your blogs about how you are going to accomplish that in a time when the business is being roiled, yet again, by dramatic change. Tell us what you see as the key issues facing the industry today and how you are going to address them with respects to the speakers and topics on the agenda at T.R.A.F.F.I.C. Miami?

Rick Schwartz: We are going to be getting some straight talk and we are going to call it like it is, and when it is on the table, everyone will be forced to discuss it. Domainers need to take some pointers from the Tea Party and start to flex some muscles because some other family is getting OUR earnings.

In the early days I would rather piss the traffic into the ocean than give it to somebody where a $50,000 sale earned me 5 cents. Shove it! Is my attitude. I didn’t want the 5 cents and therefore they never saw that $50,000 sale. It cost me a nickel. How much did it cost them???

DN Journal: Whenever domain people meet it’s all about the networking. That is done in events that are part of the program, in the hallways in between and during seminars and in the always entertaining social events. What will be going on in South Beach (which will give you an especially attractive setting to work with) to facilitate networking in all of those areas?

Rick Schwartz: The Atlantic Ocean is a great networking partner. The networking starts the minute you arrive. From our exclusive Poolside Cabanas to two different speed networking events we have never had such a focus on this single part of T.R.A.F.F.I.C..

By the way, those who think that they will come to Miami Beach, not register for T.R.A.F.F.I.C. and do business outside the show, will be sorely disappointed. Most companies play within the rules and when companies come to leach off those who pay to play, the industry needs to know which companies and sponsors would stoop that low. They don’t support the industry, but make hundreds of millions or more from it. Howard and I agreed to get on stage and share this information with all who come to the show. We think domainers have a right to know. That is one of the reasons that we are considering the possibilities of a domainer-only event in 2011. I think what transpires at this show will help determine our direction. I think domainers would be shocked at the size and names of the companies that have to stoop to this level. SHOCKED!!

Howard Neu: The Loews Miami Beach Hotel is not only world-class, but also warm and friendly.  There are great places to network all over the hotel and our two networking sessions will be amazing. 

DN Journal: People have a wide variety of conferences to choose from these days – events of all sizes spread across countries around the globe. No one can do them all anymore so when people try to zero on where there will get the most bang for their buck, what kind of elevator pitch would you give them for T.R.A.F.F.I.C. Miami?

Rick Schwartz: T.R.A.F.F.I.C. started it all. We have set the tone and agenda that all others have copied each and every step of the way.  I always thought the shows would work together in a way that would further the entire industry; do things differently. But that has not always been the case, and it has forced a needless enmity in a young and growing industry. And while I will eat a lot of crow for saying it, the future will prove me right and the future will prove a path that that will no longer take advantage of domainers. It’s easy to go to a free show when it is your own reduced earnings that pay for the free tickets!

In 2011, the book on Domain Auctions will be 

rewritten. T.R.A.F.F.I.C. wrote the first book which was adopted by all others in the business. Next year we will be doing much more than just hosting the auctions. We will begin to organize and direct them. 

What that means for Domainers is no more wasted time on pigeon shit domains with high reserves. Domains that are intended to sell to other domainers need to be priced accordingly. You will see more great names, and they will only have high reserves if the OWNER brings in at least 3 end users! Everyone needs to have some skin in the game. There are no more free rides and we each need to do our share. You want end users?? Well THIS is the way to make that finally happen. We won’t allow, “Showboat bidding” or “Off the wall bids”. We are going to clean up how the auctions are done. And if a domain does not sell, we will at least establish a value by starting low and letting the market find the top. And I'm willing to bet that others will follow our lead. They will have no choice. T.R.A.F.F.I.C. will once again set the standard. 

Our guiding light will be to auction off great domains at great prices. Nothing more and nothing less. No more boring auctions! I would rather have an event with 20 domains that are truly up for grabs than 200 and look silly and put everyone to sleep. For the Miami Beach show, Rick Latona already knows where we are going and I think he is up to the challenge! I believe that you will see a lean and mean auction where 75% or more of everything will sell. I think the industry is about to witness a huge comeback!

Howard Neu: I don’t believe that we will be seeing nearly as many domain conferences in 2011 as we had this year.  We would hope that those that ARE scheduled will be successful, each in their own way. We believe that 2011 is the year that conferences will start working together for the benefit of domainers and possibly even consolidate their shows. We stand ready to work 

any conference that is willing to with work with us to make it easier for everyone to obtain the benefits that are derived from attending a domain conference. But Rick and I are committed to keeping up the quality of our shows and maintaining T.R.A.F.F.I.C. as the Gold Standard of Domain Conferences.

DN Journal: Gentlemen, thank you for you time. Is there anything you would like to add before we say goodbye until we meet again in Miami?

Rick Schwartz: T.R.A.F.F.I.C. will continue to go where no other corporate entity would dare go. When we have a decision to make, we don’t ask bean counters and a board and our legal department and some committee. It does not take weeks. It does not get shoved under the rug. We go to sales and marketing and make the best decision we can. Not one based on budgets and politics and other extraneous garbage that prevents you from making the best decision possible that helps everyone involved in domaining.

Then, of course, if you had to do all that and then make sure it matched your business plan, that would just add another layer of confusion. It’s just another way to skew the decision, delay a decision or just not even make it at all.

The industry needs innovators. We have had a lot of innovation until recently. I am CERTAIN, that anyone reading this understands the last couple of years have not been good for domainers. In many cases, it has been much better for our partners. The crime is that they have all done so well with OUR gold; with OUR oil; with OUR traffic. But it is their refinery; their rules; their rates. We have been passive way too long.

Look, I see things that nobody else does. Do I speak up? I usually do. But this becomes sensitive and I fear retribution. But don’t anyone dare think this is a clean industry of top-shelf folks. While I am the #1 advocate for domains, I am not that happy with many of the values that this industry has adopted and would rather someone else take the lead. Let someone else be the face of the industry. I am content with just focusing on domain names.

And therein lies my biggest struggle. The work in accelerating domain names into the mainstream consciousness of everyone is far from over. So we may be doing just one show in 2011, and possibly a small meeting of only domainers that will help set the course for the next five years. This could be the most important five years for the industry because of the demand for good and memorable domain names.

Let’s just put T.R.A.F.F.I.C. South Beach this way. Consider the “Graduating Class of 2004”.  It’s all grown up and many of us are being pulled away in different directions as destiny swoops in. So this just may be the last best chance to see all of our old buds before the next stage. And you can bet, we are entering the next stage. 

The evolution of T.R.A.F.F.I.C. and the evolution of the industry have been synonymous. The future will look nothing like the past and as business people we all need to get up to speed quickly. You can sell an asset for $40 or $40 million. But you need to know the difference between dealing with minnows and whales. Those who don’t perfect this technique will give away millions. T.R.A.F.F.I.C.’s admission is a small price to pay to insure your future and stay on the cutting edge by networking and breaking bread with the biggest and the best.  T.R.A.F.F.I.C. can make a whale out of you! We have worked hard all year so that we can focus on this bash!


 Home  Domain Sales  YTD Sales Charts   Latest News  The Lowdown  Articles  
Legal Matters
  Dear Domey  Letters to Editor  Resources  Classified Ads  Archive  About Us

Hit Counter

Latest news of the domain name industry

Copyright 2010 DNJournal.com - an Internet Edge, Inc. company. 
No material may be copied from this site without expressed written consent.