The Rick Schwartz Domain Name and Traffic Blog: RicksBlog.com – Home of The Domain King®

Morning Folks!!

This was supposed to be my Friday post but with all the happenings, I had to delay it.

If you had a choice and could hook up with 3 men of history
who would you choose? For me the answer is crystal clear. While I can name a
dozen more, the 3 I would choose would be Ben Franklin, Mark Twain and Albert
Einstein. Those 3 are already my guiding light. I look to them for answers all
the time. Ben Franklin probably the most.
Why these 3? I think for obvious reasons. But together they make a very well
rounded group of advisors. The inventor, the plain spoken and the genius. Add
more? Sure. Let’s put Thomas Edison in there. Henry Ford. Andrew Carnegie and
Hemingway to keep things fun and interesting.

Of today? Let’s start with Tony Robins. Who was the one that
started me on this journey back in
1993. Donald Trump who may be a
lot of things, but he gets it right nearly every time. Steve Forbes who understands the
economy possibly better than anyone.

So a tip of the hat to all these men of history and those to
be!
Who are your people of history? Some may be the same. Many
will be different. As soon as I post this I will think of many more that belong
here. But there are the first that come to mind and these are the ones I look
to the most for answers to complex questions.

Morning Folks!!

Okay, this is a barn burner of a post. As usual, I will say things others won't. Others can't. That is why they are so much smarter than me. Grab a cup of coffee and have a seat. The events of this week has and will affect your futures. Each time I go to post this, new news breaks.

The Sad Day in the Domain Industry continues. I think it takes time for all the ramifications to settle in. The entire industry needs to be paying attention and listening to the tales of woe. I see and hear anger growing not subsiding while the company tries to paint a happy face on this breech of trust.

First I got aphone call about the scandal. I knew it was big and had huge ramifications the moment I heard about it. One sentence was all it took. I knew it would takes hours and days to figure out. Next I receive an email in which the Snapnames Exec messed up andposted something not meant to be posted:

'Below the double line is the customer communication for use in proactive disclosure on industry message boards. A statement needs to be published on each of the boards copied in the attached e-mail from this morning. Disclosure time is 9:30 a.m. PT, concurrent with all other disclosures.

Please monitor the boards going forward and let me know what the feedback is like. If you need help on this, Corinne is available.
My understanding is you will primarily speak for the company in these forums. To that end, let’s coordinate closely on what’s being said and how to reply.
Let me know if you have questions from here. Thanks.'

Larry Fischerwrote some of his thoughts. 'I commend Oversee for dealing with the issue, however their reputation is tarnished.' I can’t imagine
what it must be like to know you may have overpaid by tens of thousands or hundreds of thousands, even millions. He could have put his kid through college a dozen times on his losses alone. Now multiply that. Franky,Kevin, iReit, just go right down the line. Each with losses that affected their businesses and lives. They could afford it you say? Ok, but how about the ones that can't? Much more of them and they are pretty pissed. Besides when you get scammed, it does not matter how much you have or don't have.

The entire sales history of the industry
has been skewered and voided because of how many times this happened. 50,000 is
an incredible number and until everything is transparent, we would have to
assume it is much more. The calls for publishing those back auctions has a lot
of merit and I think that is a must as a first step. The fact that it even ever came off screams the wrong message and we all know it! Update: According to 'Rob' with Oversee support, the info is coming back online)

This scandal affected the entire futures of domainers that
participated. Their destiny changed forever because maybe they did not have the
$$$ to buy that next domain. That is the unknown and invisible damage that
trumps all others.

This is just one of those things that as you read more and
more blogs and comments on those blogs, that this is laced with unintended
consequences far beyond the first look.
Lawsuits, class actions suits, and arrests. Yes, I think there will
eventually be arrests. And to that end, maybe even give Nelson immunity so we can hear the entire unedited saga and how far reaching this is. I don't know that anyone wants to see him in jail, however I can't speak for those that might and either way,I am sure everyone wants the full details. Full and unvarnished. Problem with that? They can't. The liability of the truth and all the details would be devastating imo. Nelson the fall guy? Could be. We have yet to hear any comments from him. Was a deal made to protect others to keep from being charged with a criminal act? Fact is, I don't know. What I do know is it is the #1 question folks are asking.

In an unrelatedpost a couple weeks back, I talk about how
much business a company can lose before it collapses.

Morning folks!!

This is for businesses 3-5
years or older.

During a recession if you
can manage to “Flat line” no growth……You are doing GREAT!

During a recession if you can manage to just lose
10% year over year.....You are doing GREAT!

During a recession if you can manage to just lose
15% year over year.....You are doing Pretty Good!

During a recession if you can manage to just lose
20% year over year.....You are doing about average!

During a recession if you lose 25% year over
year.....You are under great stress!

During a recession if you lose 30% year over
year.....You are under great stress and scrambling to stay alive and pay the
bills.

During a recession if you lose 35%-40% year over
year.....You are GREAT TROUBLE!

During a recession if you lose 50% year over
year.....You are probably out of business!

It is all
about numbers. So a poll was done yesterday onDNW

If I plug in the results of that poll and if I use my table
as a baseline, you can readily see the peril.

At the time of this writing with over 227 votes, 34% say
they will not do business with them again. 17% say that they just don’t know. So I take 50% of the latter number to
give me another 8.5%. Total 42.5% of customers lost on this one episode.

You would also have to factor in 2009 business. So if
business were good, it would offset that number. If business took a hit in 2009
during the recession, you can add that to the above number.

That does not count any other fallout that may or may not
happen throughout their empire. They may recover, it may get worse depending on the news to come and if we see missteps where they take data offline that was there before to try and further cover up things. Cover up? Well yes. They did take their time in going public. Yes, they are making folks sign a waiver for a “Credit”. Yes they did remove the historical data. Yes we are watching damage contol of something that is not controllable.

My numbers do not factor in the size of the domainers
they lose. So when you just deal with the numbers and the lawsuits that are sure to come, I don't see them surviving. That is what the numbers say without knowing squat. Without knowing who. But their competitors should not be too gleeful, they too will pay a price. They too will be suspected. They too will have to answer some tough questions and do more investigating.

One question I notice popping up is whether domains are safe at
Moniker? I believe they are. I still have my domains there. I have no plans to
move them. Larry Fischer also addressed this.

It has really taken me a few days to get my head around this
and I am still far from figuring out all the ramifications as I am sure many of you are. I don’t quite understand why
Nelson is not be charged with this criminally unless there would be a lot more
to come out. That is why I believe Nelson would be “Deep Throat” should that
come to be and I expect this will be beyond the control of Oversee once
domainers figure out the full impact of what was done to them, their businesses
and their futures. I say that because we live in a business where we are
dealing with “Unique opportunities in time”. So you also add into that equation
a limited pocketbook. So for guys
spending small dollars or big dollars, it affected their NEXT purchase. So if
you had $10,000 less or $100,000 less to work with, all those domains you could
have bought, were not. No biggie? Are you kidding?? Multiply by your lifetime earnings and how
much bigger your income could be today. Somebody will make that case. Many may
make that case. SnapNames won’t survive that. I expect they have no better than a 1 in 3 chance to survive collapse and/or bankruptcy. When I started this post I figured just a 1 in 4 chance of them going under at all. 48 hours later, the bleeding is getting worse. After hearing about the class action I discuss below, I think it just went much lower. I think now the question becomes how much damage does it do to Oversee? I think Snapnames will fold. It is to the point that I don't know how they survive. The damages exceed the value of the company.

Now please, these are my personal opinions based on all the
pitfalls and perils I see. I started working on this post on Thursday night. I let it sit and edit all day Friday and all morning today. This is a snake pit of problems and it will affect
more than just SnapNames. There is major fallout coming here. For example, all
reported sales involving “Halvarez” auctions need to be recalculated and we should get a REAL number of the total fraud that was committed. I feel and see anger building. No company can control the anger. They may be able to control some, but not all. How does anyone defend the indefensible without just painting a happy face?

Well that Happy Face just got 1000x harder to put on. The latest is the Class Action Website reported on by Adam Strong who had the funniest comment so far. 'Too bad Edelson doesn’t have an affiliate program'. This is game changer. There is blood in the water and everyone knows it. Do they go after just Snapnames who may or may not be in business in the days ahead or do they go right for Oversee?

Ever pick up a large rock that is melded into the dirt and
when you don’t expect it, you dislodge it and thousands of ants come out and other things with lots of legs? That
is what I see here. A weaker company would have already collapsed.

Shill bidding is one of the single oldest and worst problems in this
industry. From the days of the infestation of the old Afternic to nearly a
decade later. Only difference is the size, scope, magnitude and organized
manner. Isolated? I doubt it. Will
it end? Probably not but this will stem the tide. Will more come to light? Not a doubt in my mind. Do other
companies do it? If discovered will they collapse instantly? Should they collapse? Sure. Why not. Somebody will always come to pick up the pieces. What makes this such a big story other than all the obvious things is that we are talking about an officer of the company. An executive. Not some low level schmuck.

Like others, it is still sinking in. Great damage has been
done to more than just a company. An entire industry painted by a broad brush and that makes me angry. As you have read inTechCrunch, this has been hoisted and blamed on ALL domainers and the entire industry. Domainers getting blamed for what domainers had no control over. That is where I fall off the deep end. That is where my anger grows. A great trust has been broken. It is a sad event. I think what the
question is becoming: Should it and could it have been prevented? What was the
largest deal that Halvarez bid in? Total dollars involved? The questions are
just starting and the answers will tell the future. This industry is based on
one word. TRUST! We have seen TRUST broken on a small level. We have NEVER seen
it broken to this magnitide before we even find out the entire story and entire history. Thousands of domainers
each with their own story and own anger to deal with. Sorry, but this is bigger than just a company inside an industry even if it is the biggest in the space. Bigger because it is the biggest company in the space. This is akin to theBlack Socks scandal in baseball. It affected the entire game. Unfortunate as it is, this affects the entire industry in ways you would probably rather me not articulate. Some will excuse and some will minimize but make no mistake of thefallout that has yet to happen. Like nothing we have seen to date. Already thesecond TechCrunch article has been released in just 3 days and expect more to come from even bigger media.

What we have seen so far is the part of the story that would be allowed out in an effort to cover everyone's ass. So you can either worry about helping to cover their asses or start to start covering your own. Each company and each domainer has a responsibility to be good stewards of the industry. How we handle this may determine our destiny. Lord, I hope this is just a bad dream.

Rick Schwartz

UPDATE: For further Play by Play updates,TheDomains.com has been on top of this and also one of the largest victims to come forward so far with actual numbers of over 12,000 auctions that may have been affected. Plus a poll is there that suggests the bleeding is much worse than what I indicated above in an earlier poll I used. So anger is still growing and I don't think anybody knows where this train will end up. I feel bad for so many folks that are affected due to no fault of their own. Lawsuits are already flying and more are coming. This is a mess beyond anything that any one of us could have imagined just a few days ago.

Morning Folks!!

I feel the worst for those
that were friends ofNelson and were betrayed. I knew many that had his back
for many years. In the early days Nelson basically ran his entire business off
my first domain board. He was popular and had a lot of friends. I can’t imagine
how they feel.Adam Strong gave a taste of what that must be like. Betrayal
is a bad place.

The story broke yesterday afternoon. I doubt the depth of this has been totally revealed. Damage
Control for 10 days and it has been public only for hours. Nobody gets to
“Control” where this may go. I would hope there would be an independent
investigation as this obviously is something that cost many millions. Likely more
than that with damages. It affected folks around the globe and their businesses
and the cash they had to run those businesses.

I was not a common bidder at Snap so yesterday was the very first time I heard of “Halveraz”
the 'Ghost'. But also looks like there was plenty of smoke before the fire broke
out from what I am reading. Some suggest that Nelson is just the “Fall guy.” Who knows, but it will
all come out. This is a volcano. An unfortunate volcano. Now the question, who
else, where else???? Will Nelson become “Deep Throat'? Today, THAT is the
question. What does Nelson have to say if anything? Are there any other 'Suspected Ghosts' at other venues? One thing is for sure, companies throughout the industry better clean up their act. A scandal can bring down the biggest.

I feel bad for Monte and the crew as another piece of bad luck has hit. I can't even imagine what they are going through at this point. Like I said in the title, this one is rocking the industry to the core. Like nothing any of us have seen to date.

Rick Schwartz

Morning Folks!!

If my numbers are too low, just lmk. I just needed a
starting basis. Want more, I’ll plug it in. Think I should have it a little
less, I can do that as well. It’s numbers. Numbers. The rest is all bullshit.
If I can’t get 60 minutes in front of Microsoft, not a problem. I have ETERNITY
and the WORLD right here, right now! I no longer have to be there, I can be here and make a pitch. And so I have and so I will. It's also to the industry as well. I have watched billions pissed in black holes and blue sky's and they laugh at this. Huh? It is crazy to believe something based on numbers when you can do business with clowns and magicians that can make money disappear.

Monopoly?? I don’t think so. Just would own the most prime
category killing domain name business in the universe. That is a foundation
that does not get washed back to sea each day. It stands strong regardless.

So here is how I see the pie split. Add your name and dollar amount. Minimum is $10 Million inTOTAL Valueand included must be at least one domain with a high 6 or 7 figure value.

Note to Stephen Douglas. The seller is the ultimate appraiser as he is the only one that can pullthe trigger to do a deal. It is his decision. Nobody can force him. Circumstance might, but even then, some go down with the ship. Stephen, that should answer the question you posed months ago. I have thought about it. But today the answer appeared and for me, this is it. You can't force the seller to sell. But a bargain price can force a buyer to buy. Make sense?

Again, If my numbers are too low, just lmk. I just needed a
starting basis. I am not here to tell you what your number is or should be. Giveme the one you would walk away and into the sunset. These are simply my guesses bases on assumptions I devised in my mind. Some are way off high or low. I just pulled the first names that came to mind so this is far from a complete list. Don't shoot me if I omitted you. I omitted almost everyone. lol

Kevin Ham $350,000,000
Franky $500,000,000
Scott Day $450,000,000
Lawrence Ng $350,000,000
National A1 $300,000,000
Larry and Ari $200,000,000
Rick Schwartz $150,000,000
Mike Berkens $150,000,000
Xedoc $150,000,000
Roland $200,000,000
Lonnie $100,000,000
Castello Brothers $150,000,000

BuyDomains.com
Marchex
NameMedia
Demand Media
Parked.com (Domain Inventory)

The joke will be when the domains are worth $80 Billion and that schmuck Schwartz was trying to sell us out for a paltry $8 Billion.

Have a GREAT Day!
Rick Schwartz

Morning Folks!

You may laugh, but this is no joke. I am serious. This is an idea that I have carried with me for well over 3 years. Ask around and see.

In 2006 we were in Silicon Valley when I
first had this idea. I shared it the last night of the show with folks like Larry and Ari
and Marc and others like Franky and Kevin and all that would listen. I
explained it is easier to make a $5 billion sale than it is a $5 Million
sale at this level because it is
more meaningful. More impactful because of the instant marketshare. Who wants
to negotiate 100,000 separate contracts? But bring the big group of domain
investors to the table and that becomes a much easier job. A much easier sale. A much more attractive package.

Hey Microsoft, wanna buy the whole Domain Industry for $8 Billion?

Microsoft, Give me one hour of
your time and I will show you mathematically how to grab the biggest piece of
market share you can buy for the bucks and at the same time take the best most
potent traffic away from the competition and secure the future. Why rent when you can own? Why pay out
billions year after year after year leasing the traffic when you can own the
asset and those mineral rights?

How much is 1% more of the market worth?? How much do you think you will spend to get that 1%? Then on to 2%, 3% etc. How many YEARS or DECADES will that take?

So Microsoft, let me sell you the
domain Industry for $8 billion. Let me sell you the most prized collection of
keywords on the planet. Let me organize the biggest domain sale in history. Let's change the dynamics.

Call me. Email me. Not one other
thing that you can do to take so much of the market away overnight. Nothing. If there was, you would have done it. Not even 1.5% or you would have done it. Keep trying or secure that
market forever. Bing is great but
it needs a booster rocket and the domains can do that in such a way that boosts
yourselves and hurts the competition with one stoke of the pen. It will take
years and decades to do what you want to do. Maybe. Nothing to write home about so far and as my past posts suggest, I am a big fan. But with this deal, I can
show you with numbers how you can turn the tide…..NOW….TODAY……GAME CHANGER.

It took a lot of years to get
Microsoft to TRAFFIC. I sure am glad some of them ended in the limo withMike.
Your only risk is a great success beyond anything those meetings will be
producing. Give me a few minutes and a spreadsheet. Business is tough, why not focus on the obvious? Numbers don’t lie. Even in a depressed market the numbers work.

Have a GREAT Day
Rick Schwartz

Morning Folks!!

Every so often we hit a 'Crossroads in life'. A point where we make major changes and major decisions. For some change and decision are 2 of the hardest things. Those things do not come easy. Do not come without a lot of thought.

In January I will attend a domain show for the first time as
an attendee. The first time I can go to TRAFFIC with my wife and have no other
responsibility other than to make money and make deals. Something I seldom can
do when running a show.

So for the first time I will come to TRAFFIC in Las Vegas
and I look forward to a week of fun and enjoyment. I am excited to see what
Rick Latona and his team will present.
Younger, hipper and in tune with the needs of 30 something’s.

The Hard Rock is a great venue.
Younger, hipper and in tune with the needs of 30 something’s. lol But seriously, I look forward to seeing
TRAFFIC from the other side. Another side.

Many things will be different, but
many things will remain the same. Either way, it will add a new dimension, a
new signature. Something fresh and
different. And I am excited to see their vision as I know many of you are. You will have new faces that greet you
when you register and a new experience based on a solid formula.

So with this post, I ride into the
sunset for the first time since 2004. I am going to enjoy the year off. No schedules to put together, no panels
to assemble, no thinking all day and all night how we are going to make the
next show the best show.

Lots goes on to put on a show. Do you think it is easy to
pay $96/gallon for HOT WATER in New York?? It kills me, but we have little choice.
Coffee is even more! The opening night cocktail party costs over $200 per
person. Yup, you heard me right. $200 a pop. One person. Then add Breakfasts,
lunches, brunches, open bars, snacks,
food at registration. It is astronomical. So we went to the Big Apple.
We did what we needed to do 3 times. We paid the piper and have a series of
accomplishments.

On to South Beach next October. Costs are huge there too but
only $79/gallon for that hot water. Oh the save the day. So we are going to
restructure the pricing for South Beach TRAFFIC. Everyone benefits, everyone has to pay. That has always been
the premise behind TRAFFIC. That’s why I am such a prick about it. You expect
us to feed you and expect us to help your business move to the next level and we
are supposed to pay your way to get in the door? I don’t think so. Howard and I take great personal and
financial risks to put on these shows.
Our risk is much higher as we have nothing to sell and we do everything
First Class. At TRAFFIC, you gotta pay to play. Those that think TRAFFIC costs too much will never know how
much they lost by not coming and not investing in themselves. Not taking the
risk to move up to the next level. And to be blunt, it is not our job to reach
down and pull you up. We try, but the ultimate decision is yours.

So as I explained on stage at TRAFFIC in New York, we don’t
look to attract domainers that make $1000 a month. Sorry, these folks are
“Extras” from central casting. They don’t make you money, they COST you money
by wasting YOUR time with folks that can’t do a damn thing for you. Now I don’t
mean to insult or put down those that are on the ladder and make that
$1000/month. Keep going. I just believe it is not up to us to lower prices so
you can attend. Quite the contrary. I believe you need to raise your game and
take the risk. Step up to the plate. With our tiered pricing, everyone can
afford to come to TRAFFIC, you just need to take advantage of the early bird
specials we offer and plan ahead. That is the secret formula..

So as the Latona crew takes us to Las Vegas in January and
then around the world for the rest of 2010, I am hopeful that we are on the doorstep
of a great year with great things. Challenging as it may be, I think 2010 will
be the “Year of the Deal maker” As I stated early in 2009, make just ONE great
deal that you can look back to. In 2010, you need to make DOZENS of deals because the deals will be out there.

So I am coming to Las Vegas TRAFFIC with an agenda! An
agenda of deal making because for the first time ever, I won’t have the
responsibility to make sure the train runs and runs smooth and on time. My
“Conductors hat” gets passed to the Latona guys.

The bottom line, after 5 years…….we accomplished a lot. We
brought an industry together. We had too many “Firsts” to list. We made a
difference in the lives of a lot of people. That is a satisfying feeling. That
is something I will be proud of until the day I die. Our “Baby” is all grown up
and going out to see the world. Truth be told, that was a dream of mine a
decade ago.

I wish Latona and the crew all the best. Take good care
of our “Baby”. I can’t tell you the amount of hours we put in over the years.
But it was a labor of love 24/7 and I did it with my best pal Howard and that
made all the difference in the world.

A big thanks to Howard and Barbara and Ray and of course
my wife Alina for always going the extra mile to make sure that TRAFFIC was
more than a trade show. It was and is and will remain a “Family show” No rules.
No corporate BS. No meetings to figure out the obvious. Just a motto that if
you do it right, it will come out right. Take no short cuts. Do everything
first class. Never be cheap. The best ingredients = the best result. Pretty simple stuff when your focus of life
is not about losing your job. When
the focus is actually accomplishing something and not afraid to fail. Fail in
front of everyone in the industry. Fail and then rise to achieve.

So thanks for a great 5 years! I sincerely hope that we have
made a difference for you and your family. That is how we measure success.

Have a GREAT Day!
Rick Schwartz