10 Things About Domaining I Believe Are True You May Disagree With

Feb 10 2010

Everyone has their opinions and I’m never afraid to share them.  At the same time, I’m also not afraid to change them if at some point I think I am wrong (unless I’m arguing with my wife and then I fight it out and make up all kinds of fake data to support my claim).  After 6 months of getting to know the domain industry (I’ve been in for over 10 but didn’t make much effort to meet anyone)  and the people within, here are 10 opinions I’ve gathered.

1.  Generic keywords domains are tough to build a company around.  They work well to drive traffic to a home site or as a stand alone site of the company, but on their own they are very tough to brand.  This isn’t to say it can’t be done.  The best chance is if you are completely web oriented company.     If you look at the top 500 companies in the US and none (or very few) have a generic name, they all have brand names.  On the flip side, many of them own the generic in their category that leads to their products.

2. There are too many Domain Conferences.   Something is going to have to give.  Having three (four if you count affiliate) in 5 weeks is probably too much for the average domainer to attend.  It also is very costly.  Over the course of the year, if you attend all the conferences you could easily spend 10-15K after you pay for rooms and travel.  People are going to start choosing particular events so the event coordinators are going to have to do a good job of reaching out and pricing correctly to make sure the numbers stay high.

3. ICANN is not looking out for your best interest.  They are in it to make money and to make sure they protect their own money making entity, not you.  It’s ironic that domainers keep ICANN’s pockets full by aimlessly registering each and every new tld that comes out and yet they are the same group that complains about the new tlds that come out.  I asked ICANN a simple question at TRAFFIC, “are there any price limits that a new tld can charge” .  I was furious I had to spend $500 to keep someone from squatting on my trademark with the .cm,  an obvious release on their part to catch typos .  Tina Damm was gracious but replied “I can’t answer that at this time”.   To think that they haven’t come up with limits tells me that they really don’t care.

4. Like the rest of the world, 90% of the domainers are incredibly nice people and the rest of the 10% are pompous.  The latter know who they are. I’m a very outgoing person and get along with pretty much everyone,  but for every 9 great people I met at TRAFFIC there was always that person that gave me the “who the hell are you” look and brush off.  Those people are probably OK people but down the road I will always remember the first impression.

5. I don’t get the hiding your identity that goes on with a few of the people or companies in domaining.  If you have to hide your name or what you do, then you are probably doing something wrong.  You only need privacy if you are famous or controversial.  If you are going to lose you job, your family, or your friends if you reveal your identity then you are probably doing something you shouldn’t.  Hiding your identity doesn’t make you a douchebag but it might make you a little shady.

6. 90% of domainers have no idea how to make money doing this.  They sit on a ton of names, most of which are junk, and hold on them to them for a long time.  Most domainer’s portfolios should be under 50 names. Flipping or building each one.  They should be generating cash flow, each and every month through revenue or flipping.  If you are not,  you’ve just found a very expensive hobby.

7.  Dot biz is undervalued.  I don’t even own a single dot biz but I still know that they are undervalued.  It is a tld that absolutely works and companies are starting to register more and more of them.  I think it is much more valuable than .ws or .cc. (let the .biz spamming begin)

8.  As a seed investor in your company I would rather you buy an easy to remember domain name on the cheap and save the money for building infrastructure.  Save the 200K on the category killer domain and put that money work elsewhere.  If the company makes it or makes it big you can buy a great name later.  You may find that you don’t need it.  If you have tons of cash you can skip this one but then again you don’t need my seed money do you?

9. Most people in this industry spread themselves too thin.  Many of the investors are undercapitalized and don’t have the resources or management abilities to hire on additional staff to help them with their projects.  Domainers that used to buy and park are now forced to become webmasters, designers, and salesman. Hiring these people costs money and so they try and do it themselves.  There are some fantastic names that could bring in tens of thousands of dollars in revenue but the owners don’t have the resources to do it and won’t allow investors.  That’s why I think #6 is so important.  Work with a few names at a time…..focus.

10.  Domain Ad sales is hot.  All the salespeople from traditional media are out of work and a lot of websites need salespeople.  A domain owner spends a lot of money having a great site built and then what?  He needs a sales staff. People are using middlemen to fill ad space but 40% (the middleman’s cut) of 100K in ads is a big chunk to give out.  Put a bunch of like sites together that you own and it’s the way to go.  Big business is starting to understand the internet and if you can put together a creative package with lots of eyeballs you can certainly go direct right now and keep all the money for yourself.

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Outsmarting the Dumb, Outworking the Smart

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5 comments

  1. Sunny

    Shane,
    I agree with 9 out 10.
    #5 Privacy has other reasons also.

    1. Lets say you have 10 live sites and you are doing white hat linking. You don’t want search engines to know that they are all one person’s websites. There is nothing wrong about a little bit of linking between your sites but sometimes, it can still go against you.

    2. If you have valuable domain, privacy hides the email address associated with the account making it a bit safer if some one thinks of stealing it.

  2. Tia Wood

    1) “but on their own they are very tough to brand”
    Generic domains are excellent for branding and driving traffic. However, business ideas are what is indeed “tough to brand”, not the domain itself.

    2) “There are too many Domain Conferences.” Maybe yes, maybe no. Each conference has their own components to offer. Multiple conferences can also be seen as a convenience.

    3 – 4) Agreed

    5) “I don’t get the hiding your identity”. Things are not that black and white. Some people just want to be left alone. Some have competitors outside the domain industry and want to make it harder to track. There can be many reasons.

    6) Agreed

    7) Disagree but to each his own.

    8) “As a seed investor in your company I would rather you buy an easy to remember domain name on the cheap and save the money for building infrastructure.”

    Excellent, excellent point. Sometimes buying an expensive one word generic is NOT the best for a starting company, project or idea. The bottom line is not about the domain at all but in fact the business plan BEHIND the company or project itself.

    9) Oh! You don’t know how correct this is.

  3. Troy

    I think this is the best post that I have read concerning domaining in a long time. The industry is full of problem elements and so few “domainers” have the ability to open their eyes and see it. It seems like you are attacked as being a “dark cloud” if you mention anything negative about domains or domaining. The main players want the business to stay the way that it has been for the past decade but that is not going to happen, the business is changing and only those who can adapt will be left.

    Domains have value but they are NOT the most importiant thing in a business inspite of what the big whigs are saying. Having a sharp business mind is much more importiant, having an understanding of branding is much more importiant, there are so many things that are going to change in the next 5 yeas or so and a lot of people are going to be hurt becase they did not see it coming because they were too busy reading the blogs of all the people telling them that domains are all that matters.

    In the future we are going to have to be value creating business people, not domianers. Domianers will blow away with the winds of change, business men and women will stay.

  4. Kedaar

    Wow, This is absolutely true. But I still don’t agree on 2nd and 5th point. Domain conferences are more geographically concentrated in USA. IMO it should be held across world. Considering the rise in ccTLDs sale I would see more DN Conferences across locations in future.

    One point you miss is the comparison of full timers and part timers.

    Rest is 100% accurate.

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