Saturday, August 25, 2007

Luck, Timing, and... Oh Yes, It's Too Late For You

How Frank Schilling got rich buying domain names.

It's interesting to hear somebody contend that the ".com" domains will dominate for the foreseeable future (his lifetime and then some), given the relative novelty of the Internet. Granted, he has 320,000 reasons to want that to happen (he owns that many domain names), but the fact that he isn't selling (and a lot of other domainers aren't selling) will play a role in the future of the TLD ("top level domain" - ".com", ".net", ".org", etc.). Just as someone might once have argued, "There's no obvious alternative to typing in IP numbers to connect to other computers", the fact that we haven't thought of it yet doesn't mean it's not going to happen. I agree with Schilling that a phenomenal amount of money has been poured into making ".com" the default TLD for the Internet, but just as he and his fellow domainers purchase URL's on other TLD's, money will surely pour into a viable alternative (and probably quite a few that aren't viable, but appear promising) that will eventually emerge.

Schilling is good natured in his commentary on Google, but he obviously doesn't appreciate that Google doesn't believe parked domains are worthy of being indexed. I don't either - and I'm grateful that Google has largely purged them. Were they included, the massive profits domainers make (Schilling joked at one point that he makes $100 in about the time it takes him to exhale - and that's probably not far from the truth) would probably increase by a factor of ten or more. But, other than PPC ads, I haven't seen that many domainers instruct people, "Can't see what you want here - try searching on Google." Google is in a sense their competitor, as it profits handsomely from contextual ads which appear alongside search results, but even considering that the primary issue for me is user experience. I think it is a grave disservice to the user of any search engine to direct users to a website composed of nothing but ads. If Google's search results reverted to the days before it cleaned park domains out of its index, I would switch to one of its competitors.

Schilling's advice to somebody who asked how to break into the business of domaining with $5,000 - $10,000 was telling. He suggested buying a good URL with existing traffic and developing it. He sees the industry as having reached a plateau and, while he's still resistant to content creation for his own domain portfolio, he seems to recognize that if a newcomer wants to make money with domain names they're likely going to need to develop real content. Domaining was nice when it was available, but it's mostly over.

I heard another domainer asserting that you can still make money off of domains on other TLD's, purchasing keyword strings with localities in the URL. (e.g., I am sure he is correct that with a good enough plan you can probably make enough to cover the registration and renewal fees, and hope that in the future a blue widget dealer in Seattle will fork over a handsome price for a descriptive domain name. While the big dogs fight over the meat, you can still grab some table scraps.

I suspect that "the thing that transforms domain names" will emerge from the university crowd, or perhaps even high school, where kids looking for cheap ways to get their ideas online can be expected to balk at spending $5,000 or more for a mediocre domain name. If you can think of a cheap alternative, easy to use, viral, and sufficiently democratic that the domainers can't buy everybody else out of the game, you're doing better than me. And you have the potential to become very wealthy.

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