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July 02, 2007

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I just came across this great blog post by the "domain king" Rick Schwartz He compares compares land owners and domain name owners in a great way, and has many very good examples of similarities in ... [Read More]

Comments

Peter Best

Great article Rick! Read the bio of Steve Wynn some time. He started by purchasing a small lot on the corner where Ceasars Palace was adjacent. He told them he was going to build a hotel there after he bought it. Well, long story short they bought his little domain so they would have a bigger footprint. And, the rest is history. Wynn went on the other side of town and built the Golden Nugget then the Mirage, Treasure Island, Bellagio, and Wynn Las Vegas to name a few. You got to start (intelligently) some where, right?

Robert Haastrup-Timmi

I have to agree with you Rick! Let me kindly elaborate further, just to help out a bit.

What most people don't seem to understand is the Domain business is a very complex game with several layers of complexity. I have observed that a lot of people in and out of this business only see what looks obvious to them, the cliched mentality in general is build! build! build! but that can loose you a lot of money very quickly if you get it wrong.

Let's take a couple of juxstapositions to help some of the naive thinkers here. I urge anyone reading this piece to go take a look at commercial real estate in their neighbourhoods or downtown areas and they will probably find at least 30 percent of commercial real estate has been empty for the last 5, 10 or 15 years! I remember this being the case in downtown Oakland, California as an example in the mid 90's and today a lot of those empty properties have only appreciated further from just being there!! Infact here in the UK, our government gets very frustrated because we have tons of empty real estate accommodation above shops, never mind several empty shops on our high streets. Why are there so many empty commercial real estate premises? its simple math really! they hardly ever loose because of what I call symantic annual yield appreciation, compounded over several years.

Most people fail to realise it actually makes more sense atimes to leave these premises empty than refurbish or lease unless it makes business sense, hence these property owners look for massive returns over several years from capital appreciation!! oh by the way, indeed they would have factored in boom and bust cycles, however if you have a long time horizon, you come out tops!!

My uncle for instance bought a piece of real estate back in 1962 I'm told for £2000 and without doing very much over 40 years, the property, just one of many is now worth at least £400,000 today and all he probably had to do was pay a tiny mortgage, similar to what we pay in reg fees for domains today. Another example for readers here is Stocks and Shares, well I used to be an investment banker and most financial advisors will tell you to 1. Have a diversified portfolio 2. Have at least a 10 year horizon and 3. Invest with what you can afford to loose!

The Domain investing principle works pretty much the same way, the fact is in my opinion, even if you do absolutely nothing with your domains and simply hold on to them for the next 5, 10 to 20 years, it's fairly obvious what is more likely than not to happen...up! up! up! and that factoring in any bust cycles that we are very likely to experience along the way.

The lesson here is pure and simple, take a look at ever asset class known to humankind, Art, Stocks, Wines and Property, they all appreciate over time. I'm pretty sure Van Gogh if he were alive today would not believe the astronomical prices fetched on every single painting sold in the last 100 years after his death right?

Mankind has a natural quest for wealth acquisition and people need to wake up and realise domains are simply the next asset class for the next 100 years whether you acquire your domains to develop or acquire them to hold for long term appreciation...it makes absolutely no difference as long as you make a handsome ROI over the short to long term. The reason you are more likely to realize a very healthy return is, because everything we do over the next several decades will be driven by an online environment once we reach what I term "SINGULARITY" on the internet. Not to be confused with singularity interms of artificial intelligence, which by the way will add another catalyst whenever that happens.

I'll leave you folks with one last clue! go take a look at Google's Street View on google maps, pull up your street in pictures, zoom in on all your local convenience stores, cafes, restaurants etc.. and I promise everyone here, that sooner or later not only will you view your neigbourhood or any neighbourhood in the world with pictures, you will actually click through seamlessly and start doing business with whatever comes up on google's Street View..virtually!

Can you see where the value of your Domains are going just because you got in very early? and by the way it is still quite early for all kinds of reasons. I can see the tremendous value...it's a no brainer! I own StreetWideWeb.com...and with any luck, I'll probably have to do nothing...go figure!

Cheers!
RHT

Chris

Thanks for that message Rick. I own about163 domains. About 65% of them will be developed into e-commerce sites. The others will just stay cashparked or sold for a profit. These corporations are frustrated because they are hiring all these Ivy-league, college educated people who didn't have a chapter on domain investing in their textbooks! Now the high school drop out can lease their cyberland to these jerks.

No I'm not bashing education, I have a college degree. I'm just bashing the arrogance of corporations thinking that a 4-6 year business degree actually means something when it comes to domains. It doesn't mean a hill of beans!

Harvey

Thank you so much Rick for saying what need to be said.

When we register a domain name, we essentialy have established certain rights to the name and whether or not it is "developed" should be inconsequential.

A parking page IS development.

It is a mini search engine geared to provide results
far more relevant than most natural search engine listings.

Running a business with "parked pages" in no different than owning an advertising business.

Is this not a legitimate business? If not, why?

Now if someone holds a registered trademark prior to the registration of a domain of that mark, and that domain owner is promoting the goods and services described in the mark, there is certainly a problem.

However, the vast majority of us do not hold or promote these types of names.

Like you said, if companies want to own a certain name, they need to realize that we live in a free market and must play by the rules and not bully their way to steal a name.

Do the right thing, make an offer to partner or purchase it outright.

Please don't lump all of us hard working domain owners into one category, it's just not fair.


Chris

Hey Rick,

do you mind me asking what the name of the company you use when I have to put in the code before posting the blog? I believe you said it was for deterring autobots? That is a good idea and would go well with my two blogging sites being developed.

Thanks,

Chris

Robert Haastrup-Timmi

That's a perfect comment you make Harvey. I've always maintained that parked domains are like niche search engines focusing on their genre or target market.

Infact if I were google, I would understand that this area is likely to evolve explosively and very very soon! I would want to offer more customisation of my broader google search engine to parked domains and the ability to flight dynamic banner campaigns seamlessly and video streams. Google own Double Click right, so this would be easy.

In a few months or years, parked pages will get more and more sophisticated and attract direct advertising...it's common sence! the only reason it is slow is because the advertising agencies are years behind with all their ivy league guys that don't get it either until someone comes along and completely radicalizes the entire market by creating a ubiquitous advertising solution that creates a new paradigm!

For Google, this will probably become a nightmare! ask yourself, where would you rather search for a specific keyword say "law" on google that just churns up millions of irrelevant law sites, or "law.com" as a parked page through natural search and fully customised with law sites and law related sub-categories, relevant law banners and law advertising video streams.

The answer for everyone is obvious once 8 out of 10 web users know how to perform better searches by simply using their browsers.

I'll leave a tip on what could happen quite easily: let's suppose all enterprising domainers ganged up to contribute $1000.00 each to start an ad agency and to drive a consistent advertising campaign through TV, Print and Radio Media, that say's.. "The best way to search for anything, is by typing a keyword or phrase through your browser...not a search engine...get a better result through your browser because that is what it is there for!" and lets suppose this subliminal message becomes universally viral and common sense over a one year advertising campaign period.

Well, I challenge anyone to tell me why there will not be a massive paradigm shift in the way people search! this is behaviour psychology, and all that will then have to happen is, the domain ad agency brings lucrative banner and video ad campaings to parked pages, google and yahoo still get to make money, but domainers can afford to be choosy on attracting higher bid for placement text ads, and web users who now understand how to perform better searches naturally from his browser no longer gets one million irrelevant results! plus advertisers get a higher ROI simply because of the psychological intent from the user search! all common sense really.

Everyone wins!! ..it's only a question of time..but just bear in mind the search engines have no benefit whatsoever in doing this sort of thing for obvious reasons, except Google who may eventually realise this potential trend and capitalise on it very early. Let's wait and see what happens!

Cheers
RHT

Kevin

You can look at the US Government for the greatest case of undeveloped land ownership.

The US Government owns:

672 Million Acres of Land in the USA, which is 30% of all the real estate in our country.

The Fed Govt owns 92% of Nevada, 67% of Utah, 67% of Alaska, 66% of Idaho, 51% of Wyoming, 50% of Oregon, 47% of California, 50% of Arizona, 35% of Colorado, 34% of New Mexico, 31% of Montana, and 31% of Washington, too give a perspective. Nearly all of it is raw and undeveloped and not even "monetized" well LOL.

On the developed side of their holdings, they own 433,000 buildings with over 3 Billion sq. ft. of space.

As for private individuals, the largest individual owner of undeveloped real estate in the US is Ted Turner with over 2 Million acres in his holdings now.

David V

Fantastic article Rick!
It's about time someone with a little more "voice" than the average person lays it out cold the way it really is. It's very aggravating to listen to the crap coming from the whiney babies. These types of people are found in every industry. They are clueless piggybacking backseaters who do not know how to mind their own business. There are way too many nosy "Bullies" out there who should be minding their "own backyard" and stay the hell out of mine! You don't blog often Rick, but I find that when you do it's usually pretty profound. Very well said!

Mac M

Rick,
The scary thing is that even our land can be taken from us. If the government ever starts earning significant taxes from domains, then watch out. Imminent Domain will spell the loss of your parked domain. Supreme Court Justice Souter may get a dose of his own medicine. See the attached:
www.freestarmedia.com/hotellostliberty2.html

Syed

An incisive post, Rick. But I would like to introduce another term with your permission: “Domainer Cyberbully”. That is a domainer who try to take away valuable domains from a “fellow” domainer when he thinks he might be vulnerable. Don’t you think such a domainer can easily pose as corporate cyberbully with his now massive resources? Honestly, I am more concerned about the threats from within the industry than outside the industry. So much so, I have almost quit the domaining game altogether except holding on to what I already have and keeping up with the news. There is simply too much scamming in the industry now. I recall with pleasure my early days in mid 2004 when I entered the industry with hopes and dreams. Back then I did believe with all sincerity that if one spotted an opportunity ahead of others and forecasted accurately one could strike gold, but now I feel differently. Now I feel even if a guy has managed to create something valuable then other domainers will get jealous of him and try to grab what he has through devious means. And they will resort to all sorts of tricks and games, including posing as a cubebully to usurp what he has. This industry is now only for the most powerful and fit. I wish I had your personality, natural leadership, and the incredible ability to create a industry out of thin air. Are you aware of any insurance companies who offer cover for legal costs in case I have to deal with one of those domainers pretending to be someone else? Any advice will be much appreciated. And of course not all domainers are bad…goes without saying.

Phil M

Good post Rick.

Al Vin

Hi Rick!

Great learnings for me once again! Kudos to you but you REALLY have to change the fonts in your blog. Its too small! :)

Peace, Al.

Nathan

lol. Nice one Rick! I was still playing with my Magic Cards in 96. Yes, there is definitely a time and place for everything. There's no reason why someone should get bent out of shape because you have something THEY want.

Just remember, THEY also have the right to be upset as well as take action.

We live in a free country.

Rob Chandler

Excellent post Rick!

This is all too reminiscent of the music industrey's fear of downloadable music and how they went so far as to try and instill fear into everyone (including children!) that were using new technology to download music online.

This country was built upon entrepreneurship and innovation and it is the only thing that will keep this country at the top!

I hope the U.S. Government realizes this and doesn't allow "dinosaur" monopoly bullies hold back or deter entrepreneurs and innovators.

It is only natural for processes to evolve with the times, and we have to realize that there will always be deep pocket late comers whinning and lobbying to try to unfairly get their way.

Patricia Kaehler

Enjoyable read Rick...

I get cyberbully letters all the time... and the thought that runs through my head is: "Yeah right..." and then "Bite Me..." not very ladylike ... but... LOL

I'm glad you started a BLOG Rick...

~DomainBELL (Patricia)

Gramma - Nancy

Well said - and so very true. I still have an email from a cyberbully from back in 99 AND I still have the domain he was trying to intimidate me out of.
Thanks for advice in the distant past (98 - 99) on buying domains - I read your posts avidly and thankfully took some of your advice.

JOHN

nice blog!
I hope we can get the ownership certificate for every domain and we can pay 100+ years reg fees and we can transfer our cyber real estate into our family trust!

cheers!

John

SeanIM

Great post man, I've had this discussion with quite a few people myself. It's amazing how some have a hard time translating "like concepts" across various industries.

Christian

Hi Rick, I could not agree more with you. I am definatley envious of your success but hey you deserve it. You took the chance on domains before online advertising was huge and you staked claim to many a wonderful domain before many others new what hit them.

The whole electronic real estate analogy is bang on. I could not agree more or express it more eloqently.

Thanks for sharing your insights into this industry that is mainly shrouded in secrecey. Your words have influenced my decisions regarding domains.

Thanks,
Christian

Bob Decker

Hi Rick,
I own over 70 domains with a branding to the finest i.e. AlaskasFinest.com, GermanysFinest.com, KonasFinest.com and so on.
A few years ago a guy tried to tell me he had the trademark to "Idaho's Finest" and demanded me to turn over my domain IdahosFinest.com the next day for which he would pay me $50 for my troubles, Ha!
I checked the TM site to find his claim of being "Idaho's Finest" had expired! The company he worked for is HUGE and on the stock mkt ..possibly the worlds largest potato producer! Dumb ass spud duds if you ask me. Oh ya ..as regards real land I'm selling 20 acres seen at: BobsRanch.com providing the environmentalist allow me to. Let's hope no yellow toed frogs are found!

Scott Alliy

Bully for you for laying it on the line.

Us early domainers that committed time effort and energy to our craft deserve to be able to utliize and or monetize the properties we hold in whichever manner and at the time we choose to.

The best way to combat the whiners is for all domainers to grab as much media share as they get and use the limilight to educate the public about the value of owning and developing useful websites.

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