I don’t believe I’ve ever had a friend come back who hasn’t told me the thousands they made in Las Vegas.  With numbers like that, it’s a miracle that the poor city can stay in business!  It’s not a charity folks!  Do your part and give back!

Well, contrary to popular belief, not everybody wins when they go to Las Vegas. 

The same can be said for domains.  I’m always hearing about the big sales and great deals and it seems like nobody ever loses with domains!  Well, not quite.  I just kind of lost and won at the same time.

I recently had a domain that I bought on the aftermarket for $600 expire.  I never transferred it out of the no-name registrar it was registered at and for whatever reason, it didn’t auto renew.  Point is, I lost it.  It wasn’t about the money, it was more about me losing a domain I clearly had desired enough to buy.

Well, I just got it back.  For $8.  Nobody wanted it and it passed through the expired domain vultures (of which I am one on occasion) and went back to open registration where I picked it up again.

So, I’m not quite sure how I should feel.  I guess I’ll just be happy that I got it back.  I even saved $17 by letting it expire and picking it up at my preferred registrar! 

Many domainers have been trying out AEIOU.com‘s micro-site development as a way to rapidly develop some of their domains and get away from parking.  As I’ve mentioned in the past, a developed site will still get the same amount of direct navigation traffic and now you’re hopefully going to be attracting some organic search traffic, as well.  The cost of an AEIOU micro-site is $250 and the primary monetization option is AdSense.

I figured I’d give them a shot since I’m in the process of developing my portfolio and wanted to see if it was worth the money.  We used my site about South American Vacations for the project.  Check it out and let me know what you think.

**EDIT** – I’ve received several comments and emails all pretty much agreeing with my opinion that the AEIOU site just really isn’t that good.  The only traffic that site has received has been either type-in or referrals from this post.  So, I’m going to begin making gradual changes to improve the content, design and search traffic.  The site you see is no longer the original AEIOU version.

As many of you know, my work is focused on gathering and monetizing traffic. At its root, that’s pretty much what EVERYBODY who does business on the web does whether they describe it that way or not. There are so many ways to accomplish this and I’ve addressed a few of the ways here.

One person I’ve had lengthy conversations with about traffic generation possibilities is Chris Brooks. He’s written some very insightful comments on this blog.

Recently, he told me a competition he’s having as a means to learn more ways to monetize his domain portfolio. We’ve talked about parking and direct navigation, development for search engine rankings, domain sales…. Is there any other way to make money from domains? That’s what his competition is about and he’s going to give 5 of his generic .com domains to anyone that has alternative ideas.

Personally, I think he’s already come up with a fourth way…

1. Park
2. Develop
3. Sell
4. Barter/Giveaway – if parked, these domains might clear their annual registration fee but even if they do, it won’t be by much. There are so many ways to invest that $8 to achieve a better ROI than pure parking. Development is an option but if you don’t know anything about the subject you’ll have to invest time and possibly money to make it pop. You could sell, but I think the market is so flooded with domain sales forums and auctions that unless you’ve got a strong network or know someone to whom this domain would make sense, you’re probably going to have a hard time.

But who would turn down a FREE domain? In exchange, you stand to get some new nuggets of information that can help you with the monetization of the rest of your portfolio as well as possibly giving you new ideas for your business and that information may be worth MUCH more than you’d get from parking or sales.

Check out his domain competition.

Good luck to all.

I was searching today for one of my recently launched mini-sites to see if it had been indexed yet and came across an interesting (at least to me) find. I found a Marchex domain ranking #1 in Google!

As many domainers know, Marchex is a big domain portfolio owner. Back in 2004, they bought Yun Ye (ultsearch ring any bells?) portfolio of more than 100,000 domains for around $155 million in cash and $9 million in stock. For a long time, they just continued to park those domains along with others they already owned or picked up along the way and earned their money monetizing off of direct navigation traffic or traffic from old links to a now-defunct site.

Marchex decided that they could make more money by providing some level of development as opposed to their old parking model. To do that, they acquired Open List in May 2006 for $13 million. The acquisition helped with content aggregation and allowed them to develop more robust sites on a large scale. The only reason I can imagine they would care to do that would be to get traffic from organic search.

By developing the sites, they reduce the number of monetizable actions the visitor can take. People go to sites looking for answers, either for specific question or general curiosities. Parked sites themselves do not provide any answers. They provide two options; forwards or back. If the parked page is properly optimized, the links people see will entice them to click forward to find their answer and that’s how parkers make money. Or the doesn’t think any of the links in front of them will answer their question and they back out and try another option. No money.

A developed site can actually answer the question or satisfy the curiosity without actually making any money. Why would a business want to do that? Well, that’s the trade many make when they want to get those juicy high organic rankings and traffic boosts.

Marchex went that route with their portfolio and it may have hurt their stock price. On May 5, 2006, MCHX was trading around 22 and today it’s 11.5. Other factors contributed to the decline, but there were many that criticized the strategic shift to development.

But today while searching for my site (which isn’t included yet), I came across one of their sites, detroitcontractjobs.com (search link)

So that works. Their traffic volume to their portfolio has to be way up but I wonder if the traffic increase makes up for the loss in revenues. If they can figure out how to monetize better, they’ll be golden.

And maybe they can get their stock back up to the $15 I paid for it long ago.

I just got back from a vacation in Michigan with my wife and son. My wife grew up in East Grand Rapids, so we spent a couple of days there before heading up to Crystal Mountain for some golf, hiking and boating.

While in East Grand Rapids, I was reading the newspaper and saw an article announcing Grand Rapids new official website. http://www.GRCity.us.

Just my opinion here, but that’s pretty bad. Who picked that? And the people that did the design work, they couldn’t convince the city folks that this was perhaps a less than ideal domain?

This sort of decision process is baffling to me. They clearly spent a significant amount of money on the design. Why did they decide to skimp out on the domain? According to the whois, it looks like they might have worked out a deal on the aftermarket with the original registrant which makes it even more strange. A domain like this usually tells me that they looked for what they thought was the best unregistered domain available.

I’ve spoken with the owner of GrandRapids.com before and I know he’s not interested in selling the domain, but there are still MANY better domains out there between GrandRapids.com and GRCity.us.

One of the benefits of working at home is that I get to catch up on a little bit of TV over lunch while I step out of the ‘office’. I’ll usually check out Sports Center or Law & Order. I get all my news and stock info from the web so I don’t check the tv for it.

As we all know, the ad spots on cable during the day are filled with direct marketing spots. Lawyers, Life Alert, dieting, trade schools, etc…

Today I saw an ad for CashCall.com. I’ve seen this ad before, but today I took the time to read the disclaimer. Say what you will about that. It’s your basic “Turned down for a loan? Call us now and get money fast!” deal.

The disclaimer is what completely shocked me. Here’s what you get if you borrow $2,600 from CashCall.com…

99.25% APR
42 payments of $216.55
$75 origination fee.

If you borrow $2,600 you will pay them back $9,095.10! That’s insane! Doesn’t that cross the line of predatory lending somehow? I feel like I could get a better rate if I borrowed from Bruno down the block!

Looks like there was no sale of America.com. Last I saw, and that was with approximately 6 hours remaining in the auction, the bid was at $1,050,000 and had not yet met the reserve price. Whether the bid was by a legit bidder or a friend of the seller trying to drive up the price is unknown, but it did make it into the 7 figures. I wonder what the the reserve was…

Chris read my post from yesterday and sent me this reply:

I think you basically reflected what I said correctly. To take my own domain
portfolio as an example, I have about 350 domains, and in March of this year,
they generated about $67 in parked revenue. Now, one domain generated $31 of
that total, but let’s ignore that for now, and just say that the average annual
revenue for these domains is about $2.30. Just to make some back of the
envelope calculations, let’s say that we can multiply traffic by 20x through
minimal development that just targets the keywords in the domain name. However,
revenue will fall substantially, because CPMs on parked domains are
really high. Let’s be generous, and say that revenue falls to 60% of its
former level. That means that the average domain will now make $2.30 x 20 x .6
= $27.60. Net out the registration fee, and I could average $20 per year per
domain, or about $7,000 per year.

That’s the good news. Now the bad
news. If every domain takes me two hours to “develop”, I need 700 hours in the
first year to launch those domains. That means in the first year, I make $10 /
hour. I still need at least one inbound link to get listed in Google — add
some more time. Now, put on your white hat Google search engineer perspective
– should my 350 sites really rank? Do they genuinely help people? Do they
genuinely solve a problem? I doubt that a site developed in 2 hours (or even 20
hours) is going to be very useful to end users. Essentially you’re exploiting a
rule in the search engine algorithms that says “there’s a good chance that a
site whose domain name exactly matches a query is related to that query”. My
guess is that at some point very lightweight sites whose only strength is that
they take advantage of that algorithm hole will be downgraded in the results.
As more domainers try to figure out how to make money on their portfolio the
search engines will have to respond.

Now, take a different
approach: choose 1 domain out of those 350 that has a high query volume on
highly commercial terms with relatively light competition. Put those same 700
hours into building useful content and functionality, optimizing revenue
(through a combination of contextual ads and affiliate offers), and bringing the
site’s content to the attention of webmasters who have an interest in the site’s
topic. Now you have an excellent chance that you can generate substantially
more than $7k per year from that single site. And you’re also building a site
that the search engines will love, so that it gets more valuable year after
year.

All that said, I think it’s perfectly legitimate to quickly develop
a broad swath of sites. In theory, you should be able to develop / buy tools
that give you leverage across all those sites — user-generated-content tools,
for example. Or perhaps tools that integrate the site with Mechanical Turk so
that you can generate and release relatively high-quality content
inexpensively. By virtue of throwing a whole mess of sites against the wall,
you may find that a handful of them take off. You might be able to argue that
this approach is a more failsafe approach to finding high-volume commercial
niches with relatively low competition.

Thanks for the thought-provoking
post!
-Chris

A couple of weeks ago (I was on vacation last week or would have written about this earlier), I met a friend for coffee to talk about domains and SEO. Yes, I actually schedule coffee get together for the sole purpose of talking about this. And I LIKE it!

Anyway, I met Chris Brooks at the Cambridge SEO MeetUp and he and I had talked briefly about this. I think he was intrigued about my monetization strategy for all of my domains. These are small, niche-specific domains that MIGHT recoup their registration fees by parking alone. In truth, most don’t even make that much. All of these domains have been ‘tasted’ multiple times but set free because they require development to be profitable.

Chris’ take on it (and a very intelligent take, at that) is that it would be very difficult to adequately develop on that scale while my perspective is that these domains would be able to rank highly on search with minimal effort as they are very specific. These domains may not be able to pull their weight by direct navigation, however I view direct navigation traffic as merely a hint at the potential traffic that awaits if you can rank for that term. Direct navigation to unknown or previously unvisited domains (not well-known destinations such as ESPN.com) is so tiny compared to the use of search engines that you can safely assume that it’s 15-20x the volume you might see from parking. Do I have evidence to back that claim? No, but doesn’t it make sense? And that multiple grows the more niche the term or phrase.

Well, I think the answer is a little bit of both. I quickly threw up a bad WordPress template for one of my domains, LasVegasTempAgencies.com, as a test. It ranked #2 for the term “Las Vegas Temp Agencies” (with the quotes) within 4 hours on Google. Granted, it requires the quotes. But it’s got no content! So I think my theory holds true. But so does Chris’ as I still haven’t developed those domains and they’re just sitting and either treading water or slowly drowning waiting for me to get off my butt.

So, what’s the cost? $.03/day for the domain, $.01/day for the hosting (I use a HTTPMe package for hosting). If you’re domain has any pulse at all over a week from parking, you can beat $.04/day. As I pointed out in another post about traffic valuation the average value per unique visitor across Frank Schilling’s network and the average value per unique visitor that helped create Shoemoney’s infamous $132k AdSense check was about $.06.

But Chris’ point is that it take scale to feel the impact with that strategy and he prefers to focus his energy on bigger sites like his septic system site (which I think is great).

I think the big difference is that my strategy relies more on the power of the domain to attain high natural rankings for a specific term while he builds sub-pages to rank for multiple terms. The advantage he has is not carrying the reg fee for 800 domains.

I think as you can guess, there doesn’t seem to be a clear answer here. We didn’t reach one over that cup of coffee. It just goes to show that there are multiple ways to skin the cat. There are other reasons I prefer the multi-domain strategy which I will write about soon. I’ll give you a hint: I don’t worship at the church of Google.