Hart to Hart by Frank Schilling (2011)
I’ve been watching lots of 1970’s TV lately. My kids really dig those easy-to-follow storylines and I love the trip down memory lane. What’s most interesting from a grown-up’s perspective is how the value of money has changed over the passage of time. A million used to be a big number in the days when Jonathan Hart flew his Gulfstream II to play poker with oil sheiks and generals. $25,000 a year was a salary that put you in the top 10%. Mr. Hart had earned his lifestyle by becoming an industrialist and self-made “millionaire”
Yesterday’s million has given way to today’s trillion and a trillion is 1 million times the size of Mr. Hart’s million. I may be an economics dropout, but my street-smarts remind me to trust the words of Abe Lincoln: “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.” Abe’s turn of phrase, reminds me not be lulled into suspension of common sense, as we hear about the next trillion dollar bailout and how it will magically return us to the land of growth and normalcy from whence we came just 7-years ago.
I was living in Lyford-Cay in the Bahamas 7 years ago, in the wake of Hurricane Ivan. It’s a stepford, gate guarded compound of homes and club-buildings on the western tip of New-Providence, filled with old money, country club, trust-fund types. Nice place to visit but I wouldn’t want to live there. One beautiful night my friend, the CEO of a major bank, who had helped arranged my temporary stay, called me to go running. He waved his arm across the twinkling star filled horizon toward a group of luxury villas: “All these people are broke Frank .. They are not productive and their wealth is slipping away without them knowing it”.
What’s more apparent today than at the time of that prescient comment 7 years ago, is that in inflation adjusted terms, most of us are working harder for less. Forget the number on your PPC stats page or the price you just garnered for that 5 figure name-sale, those dollars, euro, yen and francs you’re bringing home are buying less of what they would have bought 7 years ago. My friend had started his banking career in Countries outside the modern financial system. Brazil, Argentina and Africa taught him how fragile the global financial system could be and what it was like when the coveted “system” fails. He felt chastened by the sudden increase in the price of commodities and particularly, gold (the world’s universal currency) which had risen from the $300’s an ounce to the high $400’s in a very short time.
My friend turned his conversation from our neighbors who’s collective millions were quietly losing value, to my domain names – “How much are all your domain names worth if you have to break up the portfolio and sell each, one at a time?”. Hmmm… If I sold 10% of my portfolio and slashed prices 70%, burning the furniture to get the job done, I could probably raise about $250,000,000. He laughed at the number as it seemed implausibly large in 2004. “How long will it take you at this pace to sell them all?” Some quick fingertip math revealed that I’d get around to clearing my last great .com sale around the time I blew out the candles on my 190th birthday. Time my friends, is still the most valuable commodity. The last 7 years of money printing may have staved off an economic collapse and served to make the implausible “dollar” value of our collective portfolios seem fair, but no amount of printing can bring back the most precious commodity, the 7 years we all lost.
What we really need in the domain name business is a “productivity miracle”. A quote attributed to Alan Greenspan, I first grasped the concept of the productivity miracle during an afternoon in Cayman when a group of visitors, lay on the beach in front of the Ritz. This vacation scene unfolded out the window of my office where I had an incredibly good day domaining. Without my scripts, servers, and skills I would have needed 50 of those vacationers (and then some) to accomplish what I did that day. I added permanent value to my business, while those strangers lapped up Vitamin D and umbrella drinks. You have all experienced similar days. I “was” the productivity miracle that day. Without the productivity miracle of computers, software and programming it may have taken me a month to accomplish what I did – and I’d have missed tomorrow’s opportunities because I would never have had tomorrow free.
I continue to witness the productivity miracle in the office here in Cayman when John runs our monthly renewal list in 20 minutes, or when he gets the unlocks and authcodes for names and I run the bulk transfer script to move names over to our registrar. I see it when Ryan tweaks the traffic program and Roy and Ying roll out sales-site enhancements. I see it at InternetTraffic.com when each of you post your daily add-lists which come in like a never-ending river of opportunity for each of you. It’s heartbreakingly beautiful to watch the collective productivity of all our people and partners. All that mental horsepower (which is already focused), getting re-focused via our system. It would take all the people walking on the beach today to properly handle the hundreds of sales inquiries that the automated domainnamesales.com platform handled last night.
What this industry needs is a similar productivity miracle in name-sales marketing. So many buyers out there have no idea how to go about buying a better name. They don’t understand the value proposition, or they want a better brand but don’t understand the clerical process of getting to the point where they can put their new, shiny, better name on their business card. I am working for changes in the way we market our names. I can imagine a day in the not too distant future when domains entered into the front door algorythmic search-box at Google, Yahoo, Bing return a one-box result offering to help buy the name in exchange for a percentage of namesales revenue to the search engine that closes the deal.
Google would clearly have a massive tactical advantage with an established one-box product and their search footprint. Name-sales are a multibillion dollar annual business, and there are hundreds of millions of dollars in annual sales commissions for helping users facilitate the purchase of names – and billions more waiting for the party that helps those users create hosting relationships, signing certificates, email, etc. In a perverse way it may be New TLDs which spearhead the marketing push in premium domain names. As more people take up the opportunity to buy new names at registration price, the more those people will be able to identify the good names from the bad ones – and the more they will covet those better ones.
Well, a million may not be what it used to, but the million-plus names on our platform and millions of daily unique visitors they deliver are certainly appreciated here folks. So much so, that this month we intend to pass along our next rev-share tier payout to our partners. It’s the reason your wires will be just a smidge larger than the report number in your stats this month.
As our monetization platform has grown we’ve seen a large number of naked arbitrage operators try to join us. These are predominantly small accounts, with terrible names, which miraculously get 10,000 uniques a day. We’ve kept those folks at-bay. Arbitrage isn’t a dirty word. We’re all in the arbitrage business in one way or another. When you buy a domain for 10$ per year and sell 13$ per year of traffic, that is an arbitrage play. The type of Arbitrage which troubles us is the kind that changes the characteristics of traffic.
When you buy a piece of traffic from one ad network and sell it to another network for more money you are unknowingly changing the nature of the traffic you bought. Our upstreams have told us that InternetTraffic.com has far fewer traffic quality adjustments than other platforms. We are certain that has much to do with our collective vision regarding arbitrage. Visit an arb-page and click on PPC link after PPC link to get to an advertiser and you’ll see it is a frenetic, “lean back” process which bounces you around quickly, without much effort. When a user types a domain name into their address bar, they assume a much more focused, “lean forward” stance in their chair. The effort that goes into typing a URL and immediately getting your result without changing sites, creates the impression of authority and a more sincere user. It’s a subtlety that translates into greater sale conversions (traffic quality). Time and performance have born these facts out.
When you have type-in domains you are venting light sweet crude from the ground. When you run arbitrage, you are pumping saltwater into the ground to bring the heavy oil up – or worse, fracking, to get your oil. I would encourage any of you toying with arbitrage on this platform to please move that business to another partner. We have no place for it here. Arbitrage is always there for us. We can always get arbitrage back if we drive it away. Type-in traffic operators are more elusive. They have the pure traffic and we want to continue to provide a platform where it is appreciated.
Speaking of platforms – our DomainNameSales.com platform is chugging along and doing a terrific job brokering and handling sales inquiries for our clients, without charge. I continue to generate more revenue from that machine than I do from all my traffic sales. I strongly encourage each of you to embrace it, as I have. The version I use is no different than yours. I expect within less than a year, the time you spend investing in this platform will result in you turning more deals – and at greater prices than in your previous years.
InternetTraffic.com’s parking program will continue to pay more than other PPC shops, but it is our goal to unlock the latent value of domain name portfolios by closing more sales, at higher dollar volumes, more consistently, than other sales platforms. I am so impressed by our site’s utility that I think, in 12 months, it will likely be the main reason that clients beat a path to our door.
Creating a great sales machine, unlocking the value of names and traffic, opening that platform for free to the masses – this may all sound very altruistic and too good to be true. But the cold truth is that I am doing this for me. If Jonathan Hart and my friend Pascal have taught me anything, it’s that I’m not getting any younger. I have a great deal of name inventory and it is my goal to unlock the value of those assets before Haley’s Comet graces the night sky above Lyford Cay again. If delivering a great product ultimately helps you to do the same for yourself, then all the better.