Facing The Absurd

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DOMAINSPONSOR® EXPANDS DOMAINFEST® TO EUROPE
--Early October event in Prague will focus on networking, building European business interest in online real estate--

LOS ANGELES, Calif. and FRANKFURT, Germany. DomainSponsor®, the domain monetization business unit of Oversee.net® and organizer of the DOMAINfest® series of conferences, said today that it will expand the highly regarded franchise into Europe with a conference in Prague, Czech Republic.

The two-day event will be held Wednesday and Thursday, October 6 and 7, 2010 at the landmark Hotel Intercontinental located in the heart of one of Europe’s most beautiful cities. Building on the success of last month’s event in Santa Monica, California, the October meeting will continue DOMAINfest’s focus on increasing the value of Internet real estate and will offer a rich setting for extensive networking involving topics relevant not only to domain investors from Europe, but also from around the world.  

Subject-matter experts will be invited to facilitate the networking sessions on Wednesday, October 6th.  The first day will also include a Moniker® Premium Domain Name Auction powered by SnapNames LiveTM technology.  Day 2 will be focused on social activities in and around Prague designed to provide the kind of shared experiences that can contribute to the building of long-term relationships between DOMAINfest Europe attendees.  Conference details, including the agenda and speakers, will be released in June, 2010.  

“DOMAINfest Europe is an excellent opportunity for European publishers, online marketers, and domain-related service providers to meet and discuss ways to increase the value of domain names, which we like to refer to as Internet real estate, “ said Peter Celeste, Senior Vice President of Oversee.net and General Manger, Monetization Services. “The DomainSponsor team looks forward to becoming more engaged with the European domain investor community, and this forum is the perfect venue to exchange ideas and build relationships.  As with all DOMAINfest events, we will be offering affordable registration rates to encourage maximum participation from a wide range of talented professionals from both inside and outside our industry.”

In January, 2010, DomainSponsor hosted a highly successful DOMAINfest Global® conference in Santa Monica, California that attracted more than 600 professionals from a variety of internet-related industries.  The conference included a variety of sessions over a three day period, including a keynote fireside chat with Tony Hsieh, CEO of Zappos.com. This recent DOMAINfest conference also featured a first-ever PITCHfest contest, structured networking sessions, and moderated general sessions with experts from the world of investment, advertising, and marketing. Videos of each session, including the keynote fireside chat, can be viewed at http://www.domainfest.com.  

In November 2009, DomainSponsor announced the establishment of its European head office in Frankfurt, Germany with Joerg Schnermann as General Manager. 

Moniker® Auction
Moniker will host a live premium domain name auction on Wednesday, October 6 followed by an extended online-only auction from October 7 to October 14.  Specific start and end times for each auction event will be announced June 1, 2010.  The live auction offers real-time online viewing and bidding from anywhere in the world via a free software download.  Details on how to bid in-person or remotely in any Moniker live auction can be found at http://domainauctions.moniker.com
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Registration and Sponsorship Opportunities
Registration for DOMAINfest Europe will be open June 1, 2010. The early bird registration rate will be US$395 until July 1st.  A discounted rate of US$495 will then be available until September 1st, at which point the price increases to US$595. Companies interested in sponsorship opportunities can contact sales@domainfest.com
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About DOMAINfest®
Founded and hosted by DomainSponsor®, the domain monetization division of Oversee.net, the DOMAINfest® conference brings domain industry and Internet professionals together to learn, network, and do business. Attendees include online advertising experts, domain publishers, domain monetization experts, SEO and SEM specialists, website developers, online marketers, ad or affiliate network suppliers, search advertising providers, venture capitalists, bankers and trademark/legal advisors. Visit http://www.domainfest.com for more information.

About Oversee.net
Oversee.net® is the leader in Internet real estate, specializing in monetizing, registering, selling and developing domain names. The company provides an array of managed services to domain investors, corporations, and individuals across more than ten million web sites. Oversee owns one of the largest portfolios of domain names in the world. The company’s unique optimized technology connects consumers and advertisers with highly relevant advertisements. Headquartered in Los Angeles, the company’s core brands include DomainSponsor®, SnapNames®, Moniker® and LowFares.comTM. To learn more, please visit www.oversee.net.

My lead generation business happens to be the fastest growing department in the company, with 350% year over year growth. Over the course of a year, the lead generation business grew from 1 person to 9 employees and by the end of the year I would like to have at least 20 in lead gen. So far we are only active in the Czech Republic where we are getting the proof of concept right before we expand abroad in the next few months.

At this point we are very close to doing $100k in revenue (we should pass that level next month) a month from lead gen with a 35% gross margin. It still contributes very little profit in comparison to my domain portfolio, but it is a huge growth business that in 2 years time could be a substantial contributor to our EBITDA. Our revenue target for 2010 is $1.8 million, which should be very attainable.

In the past year we’ve done a lot of tweaking of the model, implementing new marketing channels etc and I am pretty sure we’re getting the model right now. I’d like to share our model with with you guys. Maybe it could bring some inspiration to you or you could in exchange share some of your ideas how we can further improve.

90% of our lead generation business is finance – personal loans, payday loans, mortgages, credit cards, car insurance, life insurance etc. We are trying to expand the model into other areas now such as telco and utilities, but that’s still going to take time.

We work with clients only directly. Our selling point is pretty much this – Let us handle your performance marketing, instead of clicks we will provide you with more targeted leads (where you can exactly measure the performance) and we can generate volume. And lastly, we put our money where our mouth is – we invest in all the media buying on our own account and hope we will make the money back on leads. Compare this to various SEO/SEM consultants that offer ambiguous advice.

Once we have secured the client we build a professional landing page (we now have a lot of experience with this) that will convert well. Then the integral part is the marketing mix. The marketing is really just a form of arbitrage where you want the money that you spend on advertising to make you more on leads. This involves a lot of testing, measuring conversions etc. Currently our marketing mix that we find to work looks like this:

• Killer domain – we own some of the best generics in the finance sector in the .cz namespace such as the equivalent of “loans.cz” – pujcky.cz (example of our lead gen site).
• PPC – we buy quite a lot of clicks via Seznam.cz (largest Czech portal) and Google and arbitrage that against the leads
• SEO – we work hard to get organic rankings and happen to be pretty good at that
• Affiliates – we created our own affiliate network which now has more than 360 affiliates and is on of the top5 affiliate networks in .cz
• Display advertisig – since we need to create volume, we are also a pretty big spender on display advertising. Downside is that leads from display convert worse for advertisers than say, from ppc. But you need it for the volume.
• Email – we still haven’t realized the full potential of email marketing, although we have collected an opt-in database of over 110,000 email addresses. Still a lot of potential there.
• Mobile marketing – since we usually have the mobile numbers of people, we are starting to experiment with this as well. So far we mainly use mobile marketing as a way to improve to quality of leads for our clients – for example by certifying that the customers mobile phone number is real. We could use mobile marketing more aggressively though.

So this is pretty much how our model works and I am sure we are getting it pretty right.

So how do we plan to grow our lead generation business this year? Mainly through 3 opportunities:

• Focus on more sectors – As I said, we want to diversify more into telco, utilities, travel etc.
• Take a jump up the value chain – We want to be able to offer clients not just a lead, but also the closing of the sale and hence take a bigger cut of the action. We are starting to build our own callcenter for this.
• Expand abroad – This is probably where the biggest potential is. Our marketing mix may be a little bit different though. I see a lot of potential in especially arbitraging my domain traffic to leads. I currently get about 700k uniques a day so that’s a decent supply of traffic.

I was just looking through Bido at the recent sales page. Since Bido get’s so much PR and buzz, I was really surprised about the miniscule amount of volume in dollar terms. Looks like on a typical day maybe $1,000-$1,500 of sales go through. That’s $100-150 of margin for Bido a day. And a hell of a lot of effort is put into that from Sahar’s team with no doubt to even get that result. I don’t really want to show off or anything, but just to put that number in context, I make that kind of money in less than 10 minutes, 24 hours a day, just from parking.

What the example of Bido clearly shows us is how difficult it really is to create a new viable aftermarket platform and especially get the model right. I think Sahar&co will really have to fundamentally change Bido’s model and I sincerely wish them a lot of luck, because any efforts like this help increase liquidity, which is always positive for all of us.

Overall, if you look  at the various aftermarket platform models, I think only some work very well, some moderately and some don’t at all.

Somebody who I think got the aftermarket model working really well is Namemedia with BuyDomains etc. Why it is so nicely profitable is that to a large degree, Namemedia is what I call in the business of proprietary domain trading. They own the inventory (or most of it) that they sell, hence their margins are really thick. Whereas others just rely on their 10% cut, Namemedia takes almost 100%. That’s why they can market their names proactively. Dark Blue Sea has been trying to do something similar to that with it’s Domain Distribution Network, but they are clearly not even close to as good as NameMedia is on this.

Another aftermarket model that I think makes a lot of sense is the dropcatching-to-auction model of Namejet, Snapnames and Pool. If you create liquidity in the marketplace, you can snap up domains for $7 and sell them for $79 or even thousands of dollars. Obviously most of the inventory comes from preferred registrar partnerships so the margins are not that high (as they have to give a big chunk to the registrars), but these dropcatching services definitely take a bigger cut than 10% that for example Bido or Sedo rely on.

Rick Latona gets it right as well through his whole aftermarket package (newsletter, auctions, active brokering). He also engages in what I call a lot of proprietary trading, a lot of the inventory he sells is his.

To a lesser degree I don’t think the whole marketplace model of Sedo (on a standalone basis) is that awesome and profitable. On a typical month, Sedo sells something like $6 million in inventory, with a 10% margin of $600k roughly. However Sedo has a HUGE overhead to keep this operation running, spends significant amounts on marketing etc. There’s probably very little left of the $600k a month after all the costs. However why this model seems to work is the marketplace’s impact on Sedo’s parking business. Because of the marketplace, Sedo gets a lot of parking business, where it can make thicker margins. Pretty much all the small guys making $50 a month on parking park with Sedo now, but they probably have thousands or maybe even tens of thousands of them so it adds up. The impact of the marketplace on the parking side of the business is exactly why Namedrive went into this business with its NDX Market. Overall clearly, on a standalone basis, the marketplace model is nothing very profitable.

So bottom line is that if you want the marketplace model to work, you really need some kind of upsell to make it work – to parking, a registrar or something like that.

There’s been a lot of buzz around alternative forms of domain monetization, alternatives to domain parking. Here’s my take on it…

I think quite a few of the ideas circulating around at the moment are sort of dead end. One thing that is pretty overhyped overall I think is development (sorry to say). Domainers are not developers, developing is a defocus for them and they don’t know how to do it properly in most cases. What is the point of spending a week building a website about sharks or octopuses that ends up making $2 on ad-sense a month? Don’t get me wrong, I do believe in building out prime generic domains especially in an e-commerce/lead generation/cpa context, doing SEO, arbitraging the site via PPC etc. I just don’t believe in taking 1000 domains and producing mass content, it’s really only about tricking Google for a little while who will eventually kill it because it’s really about just littering his search index. The only fit for domain mass development is for domains that don’t get type-in traffic. Why would you want to own domains without type-in traffic anyway? Rule number 1 – always follow the traffic. If you stick to this mantra, you get the domain game. If you don’t, I guess you’re condemned to flipping domains on dnforum for $20.

Since developing is such a complex issue, let’s focus on ways of alternative monetization for type in traffic. These are the areas I think are the way to go forward and make sense, some of them overlap:

• Zero click – The whole idea of this is not sending a visitor to a parked page but directly to an advertiser for a fixed fee for every redirect, similar to PPC for advertisers
• CPA/Lead Generation – I am very strong believer in this model. I think that about 20% of traffic now going to parked pages can be monetized better via CPA/Lead gen. Could even be 30%. This year I plan to take this route and arbitrage significantly more domain traffic to CPA. I want to build a small department in my company entirely focused on this. Problem with CPA is that it is very time consuming, involves a lot of testing and is difficult to scale. I think I have a solution for this though, I will elaborate more in coming weeks.
• CPM Ads – I think this could be a very decent ad on to parking. Why not put banners or more aggressive display formats on parked pages for advertisers more focused on selling their brand. There is huge money in display advertising and this area has really been ignored by the domain industry. Say you have a domain making $10 rpm. Why not put a banner on top of the parked page making another $5 rpm on top?
• Email/list building – Another area still completely ignored by the domain industry. Say you have a domain like PersonalLoans.com (still paying my debts to Frank). Why not put on it a email submission box entitling subscribers to get hot loan deals once in a while. This could be an interesting avenue for creating another continuous source of revenue from your domains. Email marketing is seriously a huge business.

Just my few cents…

Ladies and gentleman, welcome to my new blog about domaining and other related industries. In many ways this is a coming out for me (I have quite a few gay employees, so I often find myself using their terminology). Since I started in domaining in mid 2007 (started with cctlds, bought my first .com portfolio in December 2007) I have kept a pretty low profile, so most of you probably have not ever heard of me. In the course of the last 2 and a little years I have built one of the top 10 largest domain portfolios in the world. When I was starting, people would tell me that all the good domains have been long gone. Fortunately I didn’t listen…

Anyway, when I look back I’ve had a pretty phenomenal run in last two years since I finished University. Although I’m still just 24, my businenesses now span across domains, lead generation, affiliate marketing, domain monetization, a car insurance broker, search, arbitrage, facebook apps & games, mobile marketing and even a liposuction clinic altogether employing more than 70 people fulltime.

So why have I started blogging. Well there are multiple reasons. One is that the domaining community is simply great and I think it’s time to give back a little. When I was starting I was pretty much addicted to Frank Schilling’s blog (I finally got to meet the guy last month!), it was probably the most valuable resource for me and I would try to reverse engineer many things that Frank would talk about. Now it’s time for me to share some of my tips & tricks! Second reason, connected to the first one slightly, is that there really aren’t many decent domain blogs out there. Pretty much the only ones I find worthwhile of reading are TheDomains.com, DNW.com, DomainNameNews.com and DNJournal.com for the features and sales charts.. All others just seem to have a lack of insight, are limited to publishing recent sales and worst of all, don’t get the game and some are complete attention whores. So I plan on to bring a new interesting resource via my blog, Facing The Absurd. And thirdly, since I am starting quite a few new ventures, I need new channels of promotion, and a blog is a perfect way how to push the message.

I’ll be posting mostly about domains, monetization, acquistion strategies, financing etc. But I will also touch other related businesses such as lead gen, affiliate stuff, online marketing because in many ways these industries will come much closer to domaining in the future.

And lastly I might as well elaborate a little on why this blog is called Facing The Absurd. It’s a reference to my highschool love of absurdist/existentialist thought coming from authors like Camus, Sartre, Dostoevskij, Kafka etc. In many ways I view my life through the absurdist lens and my life is really about facing the absurd state and finding a meaning in a meaningless world.

So, happy reading, I’m off to write a few first meaningful posts…