Frager Factor

Thursday, April 19, 2012

Guest Post: Where The Real Money is Made in Domaining

"Nobody (outside of a small handful of people) will ever get RICH (I mean private jet, own an island, hang out with the President rich) by just doing domains and churning out crappy pages."



Guest Post by *Charles*


Could Charles be referring to Seth Goldin's Platform versus the Eyeballs argument- you know NYT "at Apple the Platform is the engine of growth," or Frank Schilling's wedMD or Colin Pape's ShopCity.com  versus the insanity we know as domaining leading to the dot com DEAD pool



If our money is not safe in banks, then where do we put it?

One possible answer is, again, domain names.

For several reasons: Domains are a global commodity Domain names are not based in debt.

Unlike Lehman Brothers or Mac and Mae, the Internet is not going anywhere but up – especially with the next item as consideration. Energy issues/prices and depleted discretionary income will drive more usage of the Internet as entertainment, news source, global connective.

The normal ‘hedge’ in these times is ‘gold’ but at nearly $900 per ounce, it is a prohibitive investment vehicle. And note, during the Great Depression, the government seized precious metals from its citizenry. That is not to say that drops in domain value will not continue for awhile – it is a natural devaluation based on economic conditions outside the industry.

No, it is to say that once and if this all shakes out, people will notice how well the Internet and domains weathered the storm and the idea of domains as an investment hedge, a place to put your money for tough times, may grow. You can make a living not developing.

Nobody (outside of a small handful of people) will ever get RICH (I mean private jet, own an island, hang out with the President rich) by just doing domains and churning out crappy pages. 

Real money is made by building a business, and a real business is not built around the domain, the domain is a marketing tool, a path to the product, perhaps even a portal or a wealth of information that people return to, perhaps the domain is even the brand itself.

 I see so many people say "I own this domain, should I build a business around it?"... this is just light hearted wishful thinking, if you're basing the entire business model around the fact that you own a domain in the market, you are probably not going to succeed.

 My personal way of using domains has been to come up with an idea, develop the plan, evaluate the viability of the plan, and if it is worth while then buy domains relating to the product, and develop the product around the best domain in the portfolio.

 I'm not trying to discourage anybody, but there are only a few people with domains like property.com... the rest of us can't just sit around waiting for somebody to scoop up our portfolio for a billion. As I've posted in the past, the bigger problem with most domainers is that they went after domains with *ZERO* regard for the theme of each domain.

 In other word there is *ZERO* intrinsic synergy across their porfolio. In my case I purely went after domains within a common theme and so there is no "site", there is a network of related sites. Scott Alley mentioned something similar in a recent post, I beleive in the area of seminars.

But when all your domains are totally unrelated there is no synergy and the work to develope increases by orders of magnitude. Years ago I suggested that domainer need to get together and pool their *COMMON THEME DOMAINS*, this is in effect what PPC and SE's do athough it's no obvious. If domainers pooled their domains *OR* traded each other their domains that relate to the others major themes, total development decreases and the potential value of the *NETWORK* increases == Win Win

....... And just try to get domainers to work together in this way

.... But maybe things are changing and this can happen one day.

 PS. The theme of my domains is in engineering, for which I have degrees and experiance. Thus I know what needs to be on the sites, so the "research" for me is not "culture shock" into a category for which I have little background - Another issue with most domainers stochastic portfolio holdings, amassed purely due to "traffic" but at the expense of monitization by those "in the know" within each domains theme/industry (read: the registrant *CAN'T* easily monitize the domains, otherwise they would have done so long ago).




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