Domain Articles

In depth articles on domains, the domain industry and how investors can get the most from their assets.

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Buying and Selling a Traffic Portfolio - Part 4

So you’ve done your due diligence on the domain portfolio that you wish to acquire and everything looks like it’s good. All you have to do is part with your hard earned cash and wait for the authorisation codes so that you can transfer the domains into your registrar. So what’s the problem? A lot!

What happens if you send off your money and the seller decides not to transfer the domains. They now have your cash and the domains. What happens if you send your money and the domain statistics have been fabricated? What happens if you transfer your dollars and discover that the stats have been pumped up with purchased traffic? These are all good questions and I’ve heard story after story of people who have been burned by unscrupulous sellers…..so my advice is BEWARE!

Some buyers try and solve this problem with a contract. Personally I find that they are almost worthless. If you have a person that is prepared to steal your money then reneging on a signed contract is probably nothing big for them. So what’s the solution?

In a nutshell I would recommend using an escrow service. With a good quality escrow service both parties (ie. the buyer and seller) can agree to specific terms and a middle-man handles the actual transaction.

For example, you transfer your money to the escrow service and the funds are not sent onto the domain owner until the domains are under your control. This at least stops people from running off with your money and the domains. You can actually specify a variety of conditions that are agreed by both the buyer and the seller that the escrow company can verify before the seller can get their hands on your cash.

Seller financing has become very popular. The escrow company holds the domain in their account while the financial obligations are met. Say $12000 being paid in 12 monthly instalments of $1000. My only caution is can you imagine the headaches involved if the escrow company ceases to operate or becomes insolvent during a transaction of this kind. This wouldn’t be pretty!

There are a number of Escrow companies that domain owners use with Escrow.com being by far the most popular and the longest established. Over the years, they’ve spent a huge sum to ensure that they are in compliance with the various governmental authorities that manage the escrow industry and ensure that it’s clean.

Tagged in: escrow escrow.com
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Buying and Selling Traffic Portfolios - Part 3

In the previous two articles we looked at managing legal risk and also the different types of traffic that often flow through to domains. In this article I will be examining the other influencers on the returns from a traffic portfolio.

The first thing to look at is where the traffic is coming from. For example, is it mainly USA or is it from China? Chinese traffic tends to be paid much less than traffic from the USA.

A number of years ago I did an analysis on the penetration of credit cards in a specific geographic region and how this influenced earnings per click (EPC). Cash based economies like China tended to have a much lower EPC. The reason being that marketers have a much more difficult time tracking spending money online to ultimate sale of the goods if the transaction is constantly being pulled off-line.

I personally believe that over the years ahead many of these burgeoning economies will adopt credit cards and the online cycle will be complete for marketers. So watch this space!

When you buy a traffic portfolio you are always looking for any “free” upside. An example of this would be if you were getting paid 90% from a monetisation provider but the person selling the portfolio is only getting paid 80%.

We’ve had ParkLogic clients purchase portfolios that have been held at a single parking company and then placed on our system. From experience, typically no parking providers wins more than 20% of the traffic on our platform which means that the acquisition would receive more revenue 80% of the time if move to other platforms. This typically provides a 30% uplift in revenue via our algorithms and processes and this dramatically reduces the payback period for the investment.

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Posted by on in Domain Industry
TRAFFIC - Happy 10th Anniversary

I would like to wish the team at TRAFFIC all the best for their 10th anniversary. It's been quite a journey for Rick and Howard and their families for the past 10 years. Sadly, due to my daughters 16th birthday I won't be able to make this one....the first TRAFFIC that I've missed since the very first conference run all those years ago.

If you haven't registered then make sure that you go to targetedtraffic.com.

Please enjoy the video below...

 

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Recent Comments - Show all comments
  • Michael Gilmour
    Michael Gilmour says #
    The only reason why I didn't travel this time was due to my daughters 16th birthday....otherwise I would have been there. This is
  • Michael Gilmour
    Michael Gilmour says #
    Thank you for your kind words.....I must admit that when you travel across the Pacific the number of times that I have it does hav
Buying and Selling Traffic Portfolios – Part 2

This is the second part in a series on buying traffic domain names.

Once you’re comfortable that the legal side of the portfolio has been addressed then you really need to dive into the traffic numbers and do some research into where the traffic comes from.

So let’s get back to basics. You’re about to purchase a traffic portfolio. The first question that you should ask is, “Where does traffic come from?”

Traffic typically comes from the following sources:

1.    Direct type-in

Generic or short domain (eg. Beds.com, gx.com.au)

2.    Typos

Typo of a generic domain (eg. Fruit spelt fruit)

Typo of a weak trademark domain (eg. Joespizashop.com instead of Joespizzashop.com)

Typo of a brand (eg. Verison instead of Verizon)

3.    Link based traffic

4.    Purchased

5.    Hijacked traffic such as tool-bars and NXD traffic.

In the above list of places where traffic comes from I’m making no attempt to try and pontificate on whether they are appropriate traffic sources. I’m only indicating that they are sources of traffic. So please do not get upset at the mention of typo, trademark, purchased traffic etc.

Many years ago I purchased my second domain name and it failed miserably to provide any sort of return. Each and every year I faithfully registered the domain to remind myself to ALWAYS ask the question, “Where does the traffic come from?” In my case, the domain had a lot of Russian bot traffic that didn’t monetise at all. There’s nothing like a $10 annual learning course to remind you of an important lesson.

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Posted by on in Domain Industry
ICANN Los Angeles Wrap Up

At long last I’ve finally returned from attending ICANN Los Angeles. So was the jetlag, long hours and sitting in a flying tin can for a day and half worth it?

I found that the main attraction for me was that there were a lot of domain owners at ICANN that were looking for a solution that ParkLogic provides. This was great news and we ended up doing a lot of business.

I spent the majority of my time either in meetings or hanging out in the lobby waiting for my next meeting. I think that we had about 30 scheduled meetings and many more that were impromptu while passing someone.

As always, I enjoyed catching up with the many, many friends that I’ve made over the years as well as making a bunch of new ones. Both Joe (from ParkLogic) and I have been working with many of the people that we met for years and putting a face to a skype voice was fantastic!

A real highlight for me was when a group of us hung around a fire pit at the Intercontinental hotel until about 2:30am. It was a chance to really get to know the .green team and hear about their passion for the extension. Dirk from .club was also there and it was great to hear his story and journey over the last few years. We sometimes forget that with all of these new gTLDs that there are real people with real lives behind them that have often put everything on the line to see the extension come alive.

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  • Michael Gilmour
    Michael Gilmour says #
    No I didn't meet anyone specifically from China....although there was a lot of people there. I think that it could be worth going

Posted by on in Personal Musings
Flying Across the Pond.....Again

Once again I find myself sitting in the Melbourne airport Qantas club. After a restless night’s sleep that was punctuated by dreams of perpetually trying to catch my flight, I finally groaned awake at about 5:54am.

When I say “groan” I really do mean the word in all its splendid definitions. I really did groan. Some people that are religiously minded say each morning, “Good morning Lord!” When my eyelids finally dragged themselves open I was more of a “Good Lord, its morning.”

So after packing the last of my things I then checked that I hadn’t unpacked anything by mistake. I’m always amazed at the number of times that I find my toothbrush wrested right next to my wife’s when it should be tucked away in my bag. Do you do this sort of thing as well?

In the end I find that I just give up and stop checking everything other than my credit card, passport and phone. If I have those then I’m all set.

Roselyn (my wife) drove me the forty minutes to the airport and for this I’m eternally grateful. Nothing against cabs but when you jump in one and ask the driver to take you to the airport and they respond with “Where’s that?” you know you’ve got a problem. Thankfully, Roselyn has done this journey many times and it wasn’t long before we’d said our good-byes and I find myself in the Qantas club.

...
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Posted by on in Domain Industry
What was the ICA thinking?

The Internet Commerce Association (ICA) has just altered its membership structure and the way that board members can be elected. I must admit that I applaud the efforts of the incumbent board in trying to juggle the various stakeholders but let’s try and unpack what they’ve actually changed.

There are four classes of membership:
Platinum - $25K/year and an automatic board seat.
Gold - $10 to 24,999/year
Silver - $5,000 to $9,999/year
Bronze - $1,000 to $4,999/year

What’s interesting is the way in which new board seats are awarded. For every $25,000 in revenue a new board seat is created and the gold silver and bronze class members can nominate a member or non-member to the position. There is an election where Gold members have 5 votes, silver members 3 votes and bronze members 1 vote.

From what I see of this structure is that it rewards those with the cash. If you have money then you can effectively buy a board seat at the platinum level. This works well for a commercial organisation that has profit as the motivation but I do not believe that it is healthy for a non-profit association.

...
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Recent Comments - Show all comments
  • Donna Mahony
    Donna Mahony says #
    Not even worth paying attention to any more. The ICA Facebook page is just kudos to those who gave money, this new announcement is
  • Michael Gilmour
    Michael Gilmour says #
    Completely understand your position Donna.....don't blame you really
  • Melissa Dafni
    Melissa Dafni says #
    Ouch. Is it any wonder that it is so difficult to get those in the industry involved?
Buy and Selling Traffic Portfolios - Part 1

I was reading a forum recently and another domain investor was asking about how to price and how to buy traffic domain portfolios. It was a really interesting question that caused me to think about how I price my own portfolios and what I look for when seeking to buy.

It should be stated right up front that everyone has a different risk/return appetite. Some people love to live on the edge and push the limits while others prefer to have a more sedate, stable investment profile. Whatever your risk/return ratio I’m sure that you will appreciate the following pointers.

Traffic domains are typically sold on multiples of months of revenue. So if a domain was earning $10 per month from being “parked” (ie. advertising revenue) then you may pay 24 months revenue for this domain. This would make the purchase price $240. Note that this equation inherently takes into consideration the registration cost of the domain for the two years.

The number of months that you pay for a traffic domain is greatly influenced by a number of factors that I will go through in this series. How much you are willing to pay will ultimately depend upon your risk profile. As a benchmark a domain traffic portfolio typically sells for 24 months revenue but like I said this can be dramatically influenced by your risk profile.

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Personal Musings - My SciFi Novel Sample

As many of you know I've been writing my very first science fiction novel. Writing the book as been one of the most enjoyable, rewarding and stretching things that I've ever done in my life. Over the years I've written a lot on my blog, technical manuals and for a number of different magazines but nothing prepared me for my first book.

It's been quite a journey for me and the characters in the story over the past 18 months. At times, I've found myself typing furiously on my laptop just to find out what was going to happen next. It almost seemed like the story was unfolding before my eyes but I couldn't see the next part until the words were on the page.

The first draft was finished about twelve months ago and then I began the many rewrites. My father is a great science fiction buff and he spent a lot of time reading the book and a lot of his suggestions are embedded in the pages. My wife has read the first hundred pages and added her unique insights in how the story could be improved. So knows nothing about science fiction so it was great getting her thoughts.

When our son Timothy was home recently I shoved a few pages under his nose to read. His comments and suggestions were all about the characters and how they could grow and gain greater depth. That added another 3 months of rewriting....sigh.

So after all the work I'm now relatively happy with the setting, plot and characters. I plan on doing a final clean-up of a few minor issues in my last rewrite before finally publishing.

...
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  • Michael Gilmour
    Michael Gilmour says #
    You raised some really good points.....I've now updated the story to not show that Ray thinks that his mother is dead. I debated

Posted by on in Asset Management
Revenue Leakage

Two words that you really don’t like to see in the same sentence is “Revenue” and “Leakage”. This is a polite way of saying money that you should have been earning that you really aren’t. I have conversations with people day in and day out that revolves around how to stop the leakage and make more money….so what I have learned over the years.

Revenue leakage comes in many, many forms. It could be that the domains aren’t installed correctly at a parking company or they’ve been moved out of your account at a parking company (this happens a lot). The nameservers aren’t set correctly or cNames aren’t up to date if you are using a rotation service.

The most obvious revenue leakage is forgetting to add your W8/W9 tax form or even your bank details to your parking account. I don’t know how many times I’ve received an email from a person accusing me of taking their money and not paying them. I check their account and they’ve forgotten to provide bank details. Their tone usually changes dramatically at that point.

Escrow.com

Another form of revenue leakage is not actually knowing what you own. The problem with domains is that they’re just so easy to forget about, drop and then lose. We had a client that had their domains littered across about fifty registrars and they had no idea what was going on. They asked for our help and over the next year we aggregated the domains into a single registrar, locked them down and saved them a fortune.

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