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Domain Names Forum

This 68 message thread spans 3 pages: < < 68 ( 1 [2] 3 > >     
An Analysis of Factors Driving Domain Name Value
Print Media Advertising Buys/Costs, PPC Costs and Domain Traffic & Marketing
gopc




msg:3137825
 6:47 am on Oct 28, 2006 (gmt 0)

<Moderator's Note: I've made the following post by GoPC, originally inserted in the Domain Auction Thread [webmasterworld.com], a standalone thread with its own title. The message presents an interesting analysis - one that required a bit of effort - and deserves closer reading and consideration.>

"Has anyone actually seen any studies that demonstrate these domains are actually worth this much?"

Good Question but it's really a matter of ecconomics. I sell advertising space in over 600 Publishers worldwide... Magazines like Better Homes & Gardens, Road & Track, and Cigar Afficionado... let me tell you, Domains offer a much easier breakdown of value.

Better Homes & Gardens charges $365,000 USD for a single, full page ad, first 1/3 of the book... EVERY MONTH. If you've never glanced at a BH&G magazine, pick it up sometime and start counting how many full pages you have to flip through to get to the FIRST PAGE of content! Then do the math... MILLIONS of dollars every month in advertsing.

And I ask you, for what? Exactly how much traffic does your product, good or service actually get for the $365,000 Bucks? Moreover, WHO are you sharing that magazine with? How many 1000s of other ads are in that book?

In the business, we measure things in Cost Per Impression. The higher the cirulation, the more money you can charge for the ad (size, placement, etc) because the "odds" are better for a actionable reader to convert to a sale. BG&G has huge readership so they can demand those kinds of numbers.

Boil that down to a DOMAIN and you have quite a different oppotunity.

1st, most companies are buying PPC ads, Pay Per Click advertising that they only have to pay for when/if a viewer physically visits their website through an ad. This is good because the ads tend to be contextual so the traffic the advertiser sees is VERY focused on their product. It's also good because while many more people see the ad than actually click through to the webpage, you only pay for visits... so impressions are FREE.

2nd, These cpmpanies BID on those ads... The focus their ad budget on "key words" which is how the ads are contextually focused. The better your keyw word marketing, the more qualified, actionable traffic your website gets and the better the odds of a purchase.

Stay with me, I'm getting to the answer.... ;)

Now, these AdWords COST... per click. Parking sites (that pay the domain owners that host the ads) get their ad feeds from companies like google that sell the adwords. The Domain owner, after Google and the Parking Site get's their cut, will get as little as .03 cents per click, but may also see as much as $15 per click. What you get is dependant on alot of factors which I wont go into now, but suffice it to say, when the domain owner gets a $1 click, the advertiser probably paid nearly $3 for it.

So... $3 per click, 5,000 clicks per month, that advertiser is paying $15,000 per month for EACH KEYWORD he is advertising. That's a SMALL advertiser... Think bigger... like:

Cannon, Kodak, Olympus... Camera Manufacturers. These guys buy MULTIPLE keywords that charge perhaps $5 or more per click on sites that get potentiall MILLIONS of visitor and tens of thousands of clicks per month.

Another quick scenario might put Kanon's ad budget for PPC somewhere around $600K - $750K per year... or MORE?

If Kodak were to BUY the domain, Cameras.com for $1.5 Million Dollars, they would break even on the ad budget in only 2 years... but something more important happens... this is where we break away from the Magazine Ads and Googles Adwords and TV and Radio and print...

Once they own the domain, they get 100% of the traffic... ZERO competition for the sales conversion of literally Millions of new customers that come in year after year after year.

How much is a Standard or Digital Camera? Say it's $500 bucks. Say it only $100 bucks... Is it conceivable that with those millions of new, exclusive, highly targeted customers they now have, that they might... just might... sell 15,000 Cameras in say, the same 2 years?

If so (and you so know it is) that company just DOUBLED it's investment in buying that domain for $1.5 Million USDollars.

They've MADE MONEY by purchasing that crazy, overpriced digital roadsign to the virtual super highway.

And it's worth EVERY PENNY.

I wish that selling print ads were this easy.

GoPC

[edited by: Webwork at 3:13 pm (utc) on Oct. 28, 2006]

 

swa66




msg:3157947
 11:24 pm on Nov 15, 2006 (gmt 0)

when the domain owner gets a $1 click, the advertiser probably paid nearly $3 for it.

The general concensus is that e.g. Google's Adwords vs. Adsense payout lets 70% of the revenue go to the publisher.
Feel free to research the Google revenue and cost streams, it's in their financial reports AFAIK.

So the advertiser will only pay $1.42 for that $1 click seen by the publisher.

Edwin




msg:3157985
 12:10 am on Nov 16, 2006 (gmt 0)

The largest recent domain portfolio sales have all been in the region of 7x-8x earnings or more.

There are regular and frequent posts (from many parties) on the domain forums willing to take generic domains with traffic off your hands for anywhere between 4-6x earnings, so the bar has been moved much further than the 1-2x earnings mentioned above.

Perhaps that's a mixup with fully developed sites, where the traffic is coming from search engines and similar? The prices being asked and paid for many of those seem to fall into the 1-2 year range because unlike a generic domain with 100% typein traffic, the traffic really could "die" overnight if e.g. Google suddenly dropped the site completely.

sonny




msg:3158123
 2:52 am on Nov 16, 2006 (gmt 0)

Type-in traffic gets the gold
typo-traffic gets the silver
search-engine traffic gets the bronze

gregbo




msg:3158214
 6:52 am on Nov 16, 2006 (gmt 0)

I am cynical, but haven't we had this discussion before? Right before the dotcom bust, domain names were selling for upwards of US $1 million. Perhaps a difference now is that some of these domains are making a fair amount of money from AdSense, but one must still wonder how willing advertisers will be to advertise on domains that don't meet their ROI expectations.

La_Valette




msg:3158234
 7:35 am on Nov 16, 2006 (gmt 0)

Domain name valuation should be no different than that of real estate, businesses, etc. It's based on cash flow.

For businesses you'd use a formula like 7x or 10x annual cash flow, as somebody already hinted at earlier in this thread. Similarly for real estate. Cash flow = your profit after deducting all expenses associated with running the domain.

There of course remains the question of valuing new domains which haven't got any cash flow yet. Likewise, established domains which you believe you can monetize better than the current owner is doing, so that you are not in effect bound by the existing history of the domain. In such cases valuation can only be done based on guesswork, but that guesswork will be more accurate if your experience in the field is longer and you have seen similar situations before, i.e. if you can accurately predict what the cash flow will be.

Import Export




msg:3158293
 8:54 am on Nov 16, 2006 (gmt 0)


About 2 years ago there was an amazing thread on this topic. I forget who and how, but someone broke down these items into great detail.

vincevincevince




msg:3158450
 12:26 pm on Nov 16, 2006 (gmt 0)

that they might... just might... sell 15,000 Cameras in say, the same 2 years?

Unfortunately 14,950 of those visitors would have bought that brand anyway...

ccDan




msg:3158590
 3:00 pm on Nov 16, 2006 (gmt 0)

Unfortunately 14,950 of those visitors would have bought that brand anyway...

Excellent point. Someone searching for "Kodak digital cameras" is clearly looking to buy (or at least seriously consider) a Kodak digital camera. Doesn't matter what the domain name is.

I mean, if I don't find what I'm looking for at kodakdigitalcameras.dom, it's unlikely that I'm going to give up on buying a Kodak digital camera. C'mon, someone that easily discouraged may be a problematic customer to begin with. "Did you try putting batteries in, sir?" "Don't give me excuses! This thing is defective. Gimme my money back, you crook!" ;-)

gopc




msg:3158654
 3:53 pm on Nov 16, 2006 (gmt 0)

The Quote referring to the 15,000 cameras was from the original post... the argument for the generic Cameras.com... NOT for focused, targeted branding domains such as KodakDigitalCameras.com

Don't confuse that. It's NOT likely that Kodak would have sold 14,950 Digital Cameras anyway from the domain, Cameras.com

People going to Cameras.com are not specifically looking for Kodak product. In fact, they may not be looking for Digital Cameras at all. They may not be looking for 35mm. They may not even be looking for a camera... but rather FILM. Or a Tripod. Or a Camera Bag.

GoPC

Pico_Train




msg:3158807
 5:47 pm on Nov 16, 2006 (gmt 0)

Sorry to be on a tangent here but I'm looking to sell a pretty good domain...

Can someone send me a PM with a reputable site that does domain auctions please?

Thank you very much and good luck to those with marketable domains!

ccDan




msg:3158860
 6:26 pm on Nov 16, 2006 (gmt 0)

So, bottom line then, which is the more valuable domain name, cameras.dom or digitalcameras.dom?

If it's the latter, than Hotels.com should be breathing a sigh of relief right about now. Because, if the registries ever get their way and implement tiered/variable pricing, then discounthotels.com, cheaphotels.com, [city]hotels.com, etc. would be paying more for their domains than Hotels.com, assuming, of course, that the long-tail domains are valuated as more valuable than the non-targeted domain name. ;-)

But,.putting aside the disagreements over valuation, how do we profit by it? Do we buy up these long-tail domain names, put AS or affiliate ads on them and hope we can earn more than $9/year from type-in traffic? Do we buy a bunch of these domains, in the hopes of making even more money?

Or, do we convince someone else that, yes, our domain name is really valuable, gimme money please and you can build it up and make yourself a fortune, but don't take my words as any guarantee that you will make an income, because I cannot guarantee your performance, but you believe in yourself, right, so just make out the check, okay? Er, how about cash? No, sorry, I don't take e-gold.

Or, do we build up a web site, then sell the domain name plus web site?

Because, right now, I don't see many people offering more than registration fees for domain names. On the auction site I'm on, for example, still no takers on any of the domains I have up. And, domains I do see bids on, are usually for less than the registration costs.

Granted, a lot of the names are junk, not likely to get any type-in traffic, but even the few good ones don't seem to fetch very much.

Now, it could be the case on some of the auctions, as in auctions where several domains are being sold as a lot, the bidders could be looking at just one name in particular, and planning on unloading the rest once they get the one they want.

For example, one domain I have up for bid gets about 100 visitors a month from what I assume is type-in traffic, because I don't promote the thing at all, as it has been an under construction site for a year. In this niche, a conversion is worth $30-$40. Even if 1/4 of a percent of visitors converted, that would be $90-$105 per year. But, I would suspect the conversion rate would be higher, since people going there are specifically looking for that product. A little promotion, improved search engine positioning, and you could really make something of it (which is what I originally intended to do).

But, no bids at all.

Maybe I ought to just nix the auction and spend a weekend building a site.

It would be interesting to see where the most profit is in domain names, aside from being a registrar. ;-) Is it in selling domains, profitting off type-in traffic or building a web site and selling products or ads?

I am thinking that the most value and profit is still going to be from having a web site. While you may hear about some domain names being sold for big bucks, there are hundreds or thousands of others that can't even fetch the registration fees.

Content is still king when it comes to the search engines, right? I mean, just because I couldn't register [focus-word][product].dom, doesn't mean that my content is less valuable than the person's who did register that name?

GoPC is right that there is two sides to this. On the one hand, you have what you think a domain name should be worth. On the other hand, you have what someone is actually willing to pay for it. In the end, the only thing that matters is the latter. You might think your domain name is worth $25,000, but it's really only worth $10 if that's all you can get someone to pay you for it. Value on paper doesn't mean as much as cash in hand.

vite_rts




msg:3158880
 6:41 pm on Nov 16, 2006 (gmt 0)

@ ccDan

Just my gut instinct, speaking as low level webbie dreaming of great things

The sites you're offering would make either $100 or perhaps $2000 in on case per year, with the bigger money requiring/involving some development as well,

The people who expect to make that kinda money are unlikely to invest in such sites, why, cos they ca do the same for free by registering a similar alternative to your names or do much better by building up their own sites

On the other hand, cameras.com or hotels.com, we talking about making a significant sums of money, with a fantastic ratio of operating costs/income, i.e. possibly millions

Both individuals an corporates would enjoy adding a free miilion dollar profits to their bottom line

Of course, if the type in traffic, or the SE traffic doesn't then convert, then the you know what would hit the fan :-)

Just a thought

sauron0512




msg:3158931
 7:23 pm on Nov 16, 2006 (gmt 0)

As far as i am concerned , if i want to visit a website 'widgets.com' or 'widgets.net' or what ever, i just type in 'widgets' in the Google Search and hit the "I'm Feeling Lucky" button. No need to bookmark a site or subscribe for an RSS feed..
Just click it.....

gopc




msg:3158966
 7:48 pm on Nov 16, 2006 (gmt 0)

I think it is healthy for us to break down through all the hype and recognize what is really the value, what is really the hype, what is really the DRIVE behind traffic from the perspective of Domaineers versus corporate mareketers.

Because the perspective IS very differnet.

That being true, the issue of "auctions" and sales presentation to these corporate mosters MUST be considered.

While "KodakDigitalCameras" might seem very easy for Kodak to get in bed with, does it really EXPAND their market? Or, does it focus and therefore funnel the active buyers in their direction sooner. more directly so that they are NOT swayed by other brands they may stumble across while looking for Kodak?

That depends on the marketing exacutive you speak with at Kodak. Are they loosing market share? Why? Is it product recognition? Is it a more agressive branding and features campaign by a competitor? In all their aggressive analysis and the shedloads of cash they will spend to find out what their customers are thinking, will they even ONCE think about the "generic" market?

Remember, it is a matter of perspective and focus... these guys think about protecting their market share FIRST and expanding their market share second. The million dollar ad campaigns you see on Television and Print are as much as clawing and fighting to hold their market position as they are about selling new products.

From a Domaineers perspective, what inherantly makes Cameras.com or Hotels.com valuable and the huge money makers that they are is that we embrace ALL competitiors equally. We throw out a BIG net to catch ALL the interest in the ENTIRE product line knowing that by avoiding focus we increase our odds of success.

What other entity shares that mentality? RETAIL.

Walmart, Target, Best Buy, Good Guys... THESE guys are the ones that would benefit the MOST from a domain like Cameras.com simply because they cover ALL the elements, all the products, all the possibilities that consumers may be seeking when they arrive at a generic website like Cameras.com

Honestly, they are the best of both worlds. As close to a "bridge" as we are going to find in today's world. They are not going to earn Millions via click through adds.. that would be a WASTE of money.

They will sell product. Units at $100s if not $1000s of dollars each, of which they will return some amount of profit that will far outweigh any PPC ads.

So perhaps the answer to generics is Retail... looking that the cost for advertising, the volume of traffic and the average cost per unit sold and ROI... the math sure seems to add up.

What do you think? If Generic is retail and Retail tends to be generic... then generic domains are UNREALIZED retail sales for the domaineer?

Q: Why take a few pennies or even a couple of bucks for an ad when you could knock down $30 to $50 per sale?

Think about that for a moment.

Possible Answer: Because not everyone will BUY.

Great answer... this is the same reason that we have trouble selling domains to Businesses.

Possible answer: Because we are not able to (or want to) be retailers, stock inventory and sell products direct.

Another great answer... what about Affiliate Sales? What about leasing the traffic directly to the company that will most likely realize the retail return on the traffic?

Possible answer: Because it's easier to just earn the PPC revenue and not really have to do anything for the money we make.

Ah.... that's the REAL point, isn't it? It's EASY money.

As I said, it's healthy for us to break down what it is we are doing here... what is the value, the hype, the drive?

Most, if not all, domaineers are drawn by the idea that domains offer us an opportunity to make significant amounts of money without doing much of anything at all. Easy Money. Get Rich Quick.

We find throngs of threads, like this one, which in essense ask why one guy makes a mint while another guy makes squat. What is the secret? How do I do that? The very LAST thing we tend to want to hear is that we have to WORK for it. :)

ALL of these suggestions are right... and NONE of them are right.

As we've discovered, there are MANY ways to look at a domain value. There are many ways to asign a price point. But in the end, it's in the mind of the person or people that will ultimately write the check.

Our challenge is to understand WHY they are writing the check, not from our perspective but from theirs... and provide the appropriate information to support THEIR point of view to garner the best wage possible for the sale of our asset.

I've been practicing what I preach and will be sitting down with a major International Manufacturer tomorrow AM to negotiate the sale of my name's sake domain which is a "generic" in terms of it's market appeal but "branded" in terms of its catagorical appeal.

I pitched and sold the idea based on the gathering of generic traffic in an attempt to sell them on one offering in the very large market segment. The struggle is finding the figure on which they will place the value. We already know it's mid to high six figures... but where exactly is it? Read the opening post to this thread and you will see from where my proposal begins.

Am I underselling a half million dollars? Probably, considering the target product range averages about $1200

1000 units at $1200 per year is $1.2 Million in annual sales... even at %20 margins they will realize some $240,000 in profits for each 1000 units they sell. Two years at 1000 units per year and they've paid off their $500K investment clean.

The company sold nearly 9 Million Units per year in 2003/04

So what should I do?

Nothing... I've given them the facts, the margins, the potential. It's up to them to define it's worth.

I just need to determine whether or not I agree. ;)

GoPC

ccDan




msg:3158980
 8:01 pm on Nov 16, 2006 (gmt 0)

I've been practicing what I preach and will be sitting down with a major International Manufacturer tomorrow AM to negotiate the sale of my name's sake domain which is a "generic" in terms of it's market appeal but "branded" in terms of its catagorical appeal.

Good for you! After you sell your half-million-dollar-domain, I have some domains I'll sell to you for a tiny portion of that. ;-)

gopc




msg:3159013
 8:30 pm on Nov 16, 2006 (gmt 0)

No guarentees. It may not sell. The deal is for more than just a domain sale too. If it does go well tomorrow, I'm sure that it will be some time before I see any ching from the deal.

I'll certainly be looking for more domains though, regardless of the sale.

Just wish me luck and we'll go from there.

The point is, domains CAN be sold on marketing potential, traffic to sales potential and measured cost-for-traffic analysis.

GoPC

panini




msg:3159095
 9:33 pm on Nov 16, 2006 (gmt 0)

Surely guys it's a simple equation - if a domain isn't part of a brand (kodak.com) which should arguably always be win-able at wipo or some other board (i know this isn't always the case) then....

...any generic domain is only worth the value of the type-in traffic.

Sure it might be seo-able and sure it might be possible to build a great site on a great name, but a great name is no guarantee of any more than type-in traffic and the revenue that can generate. You have to build a business and a web one is no different at all. Buying a name doesn't give you a great business, it gives you type in traffic, and that's it.

Give me a 3 year old discount-widgets.com site thats doing good business rather than an untouched widgets.com site any day.

Unless of course there's some crazy cash rich vc company so caught up in the next bubble that doesn't get it and is happy to part with their hard earned $ of course :)

vite_rts




msg:3159181
 10:52 pm on Nov 16, 2006 (gmt 0)

Hi Gopc,

where do you stand on the issue off holding all the tlds

i.e.

example.com/net/biz/org/info etc

Edwin




msg:3159188
 11:00 pm on Nov 16, 2006 (gmt 0)

The other part of the equation is that the top 1% (or .1%, or .01%) of domains in terms of quality and built-in typein traffic are worth disproportionately more because they can be pitched to a whole new audience that run-of-the-mill generics won't interest.

Going back to the Cameras.com example, there simply isn't a better domain for the camera industry, so suddenly all the camera companies are at least potentially going to be interested in it. All the major camera firms have marketing budgets in the $10s or $100s of millions of dollars a year.

But let's now compare CheapDigitalCameras.com.

Let's say arbitrarily - just so that I can expand on my initial point - that Cameras.com gets 100,000 typeins a month and CheapDigitalCameras.com gets 1,000 typeins i.e. 1% of Cameras.com.

You'd think, all other things being equal, that CheapDigitalCameras.com should be worth around 1% of Cameras.com. But suddenly you're down to a level of specificity that means none of the big companies will be interested, so you're left with domain investors, and small companies who want to build an actual site on the name.

There's a "win" that with a bit of effort can be explained to deep-pocketed firms when it comes to the best generics. Tell Kodak "there's only 1 Cameras.com and if you buy it Canon, Ricoh, Nikon and Sony can't have it." and that is compelling in itself.

Say exactly the same thing about CheapDigitalCameras.com and they'll just shrug with complete indifference.

Why? Because one domain DEFINES an entire industry, and the other is just one of hundreds or thousands of "ok-ish" names relating to that industry.

That's why, if you had e.g. $50,000 to invest in domains, it's probably going to be better to try and pick up a handful of really good names (the "Cameras.com" of much smaller niches) than a hundred middle-of-the-road names which won't set anyone's pulse racing.

[edited by: Edwin at 11:02 pm (utc) on Nov. 16, 2006]

gopc




msg:3159288
 12:30 am on Nov 17, 2006 (gmt 0)

"Hi Gopc,

where do you stand on the issue off holding all the tlds

i.e.

example.com/net/biz/org/info etc"

-----

From the standpoint of a Domaineer... if the extension doesn't get any traffic, don't worry about it.

From the standpoint of a Business... I'd buy them to protect your trade name and usage.

For example... the new .mobi ext. Verizon says they HATE it and it isn't worth the electrons it takes to register it. BUT, they have in order to protect their name from others that would capitalize on it.

There are other reasons as well in thier case (hedging their bets for instance) but that pretty much sums up the issue.

Buying up the other tlds is building a fortress around your asset affording you protection and added value.

Again, Domaineers don't buy for that reason though. They buy for TRAFFIC and traffic only. If you happen to have a high traffic domain like cameras.com, the odds that the other tlds are making traffic as well is pretty good so naturally, you might want them as well... but for TRAFFIC, not protection.

So there are some similarities and some differences. There are only perhaps two or three tlds I do not own for the afore mentioned domain I am working with tomorrow. In my case, that is a STRENGTH and a good thing I bought them up. The "package" deal brings more value to the resale.

I bought them not for resale some 10 years ago, I bought them to protect my asset, the dot com. Which I bought for then, my business use. Had I bought the domain for traffic, I wouldn't have bothered.

Another word about focused traffic versus generic and the last post before my response here...

Focusing down doesn't always mean lower revenues or lower value. In fact, typical LLLL dot coms have an asserted value simply because they are four letters. Even more if they are four "premium" letters. Even more still if they form a word or acronym. But even at the highest valuation from a domaineers point of view, it is pennies compared to what the domain physically brought into the business month after month. Up until I sold the business, the product line associated with the domain brought in 6 figure monthly sales... for over 8 years.

FAR more than any domaineer would valuate the domain on the domain alone.

Sedo, Moniker and several independant brokers all concurred the domain to be worth from $250K to $450K based on branding potential and traffic. So what? That was roughly its quaterly earnings selling product.

In short, the traffic alone doesn't represent the value of the domain. The market segment and the product cost/profits can dictate the value of the domain to a savvy buyer. It depends on what that buyer intends to do with it...

A domaineer will never see the retail return on investment so it is not at all hard to understand why they would not see the value in it.

GoPC

vincevincevince




msg:3159551
 7:08 am on Nov 17, 2006 (gmt 0)

A domaineer will never see the retail return on investment so it is not at all hard to understand why they would not see the value in it.

On the other hand, the clever retailer who wishes to purchase the domain wants to be well rewarded for his activities. If the domain name price eats so much profit that it is no-longer lucrative, or if the price impacts cashflow excessively, then you could well miss out on a sale.

gopc




msg:3159607
 8:41 am on Nov 17, 2006 (gmt 0)

and therein lies the quandary.

Fortunately, I have a theory. I wil let you know tomorrow afternoon if it was the right plan ;)

GoPC

davidof




msg:3159613
 8:45 am on Nov 17, 2006 (gmt 0)

> The sites you're offering would make either $100 or perhaps $2000 in on case per year, with the bigger money requiring/involving some development as well,

That's an important point, when I suggested a 7x valuation it was for type-in traffic. I have a personal hobby domain that brings in... what around $25k per year in affliate sales and CTA but it is not worth 7x that because I have a deep knowledge of the area which a buyer wouldn't have and I spend quite a bit of my time dicking around with it. The site is possibly worth 2 maybe 3x the value because if you stopped all development work there is a core of content that would still bring in significant traffic.

The fact that businesses won't pay more than registration fees suggests a couple of things

1. the domain is not provably worth more - I see lots of parked domains that don't get a single type-in per month
2. businesses don't really understand the value domains

The second point is almost certainly true which means there are still some bargains out there to be had. If you think a domain on auction for $10 is really worth $100/yr in type-in traffic you'd be foolish not to buy 100 of them, wouldn't you?

gopc




msg:3160246
 8:40 pm on Nov 17, 2006 (gmt 0)

Okay... just got off the 10AM conference call. 2.5 hours, pretty good. :)

What I've learned in the few minutes I've had to digest what just happened here... GO BIG OR DON'T GO is my knee jerk reaction.

It didn't really seem to matter what I said or how big I thought this particular deal could be... it wasn't big enough.

Thinking Globally is apparenly not a geographic statement, but one of proportion as well.

The short of the conversation is that this OEM now considers my domain and brand a THREAT to their business if it were to go into the public market as a competitive product and the conversation quickly turned to a complete takeover of their existing product lines, repackaging and rebranding.

Not exactly where I was going but okay... the insterest was definately there in a way that I had thought about but was reasonably sure they would not want to pursue.

The nuts and bolts of the time spent was as I had mentioned... they are VERY focused on the branding of the name and the focused market segment they want to claw out for themselves. Still, there was some open thinking regarding the more generic marketing and using the generic presense of domains to net customers outside of their branding campaign.

Not a complete sale but they were certainly open to the idea of spending SOME amount of money to net non-focused transient traffic. I can't get into to much detail but my original pitch (the theory I mentioned) included alot of cross marketing/branding options to enhance the relationship and campaign.

The point is, yeah... there is interest in accepting the CPC value of a generic traffic domain when it is broken down into ways of measurable converstion of that traffic. Impressions alone was not enough.

I'll go over all of my notes and compile a more flowing, formalized posting that covers all of this later. As you can tell, my mind is racing right here, right now.

Gotta run but I wanted to give you my kneww jerk reaction and thoughts before the butterflies left my stomach. Passion is difficult to share after the fact sometimes.

Best,

GoPC

unperturbed




msg:3160473
 1:48 am on Nov 18, 2006 (gmt 0)

Great thread guys, thanks gopc.

vincevincevince




msg:3160500
 2:51 am on Nov 18, 2006 (gmt 0)

GoPC,

Be very careful. Those who negotiate this kind of deal are normally in powerful positions for a reason. They will try to use every trick in the book to beat down your expectations and the minimum you are willing to accept.

You are faced with a paradox: If you rebound strongly each time you are knocked back then you are showing them how desparately you want to make a deal, telling them they can push even harder without you leaving the table; conversely if you accept the knock-backs then you are directly agreeing to a reduction in the package or the fees associated with it.

Once your butterflies start to make their way around your stomach you can't think properly. That's a fact of life. Your brain is in a 'fight or flight' mode and the other party has a good measure of both your ability to fight and your unwillingness for flight.

Please, whatever you do, sleep on the deal. Do not agree to anything other than to 'discuss with your colleague' or 'run the proposal past your accountant'. The use of terms like 'promising' and 'very encouraging' instead of terms like 'that sounds fair to me' or 'okay' will make this easier. Sleep, let your hormones go back and let the real though process happen whilst your head is firmly attached to your pillow. In the morning, have a good breakfast and then make your decision.

Have you ever noticed that following direction walking to somewhere you've never been before can feel like it takes forever, however the next time you come it feels a lot closer? As humans we tend to be disorientated by anything unknown and find that things are disproportionately difficult. The person with whom you are negotiating has walked this path so many times that he is much more in control and can see a short clear line from where you started to where he wants you to end.

gopc




msg:3160603
 5:44 am on Nov 18, 2006 (gmt 0)

Thanks for the advice. I've been here before. Don't forget, I was manufactuing PCs for mass distribution over 10 years ago. I've gone through the process a time or two ;)

I still get the butterflies, as well you should. But I know enough to know that when you are emotional, your decision making priviledges are revoked! LOL

Honestly, now that I've had some time to consider, I'm thinking it's not the right deal for me and my business. The deal "sorta" fits but sorta isn't good enough. It's not about the money, it's about the future. The future of both sides of the agreement.

I will work through the deal with them and see where it leads to some degree but on Monday, my plan is to let them know that I don't think we are on the right track... that we aren't the best fit.

Not desparate, not trying to "hold out", not trying to apply any pressure... I honestly believe that in a year, neither of us will be happy with the way things went.

Don't get me wrong... I really appreciate the advice and it's always nice to hear to help keep one's self grounded. Don't ever stop :)

GoPC

GameMasterM




msg:3161308
 3:45 am on Nov 19, 2006 (gmt 0)


"i doubt that today's type-in traffic would continue the same in the coming years"

I believe direct navigation search will only increase in time. As Google SERPs become even more useless/garbled/over seo'ed/spammed over time more people will just type in "Cameras . com".
Just my opinion and certainly time will tell.

gopc




msg:3161363
 6:48 am on Nov 19, 2006 (gmt 0)

I see it going just the opposite...

Every day, it seems, that yet another extension comes online meaning the same keywords are becoming more and more convoluted. Sure, .com is King but that certainly doesn't discount the volume of high quality companies, products, services and information available at the subsequent tlds.

Search engines are still the best, and will always be the best method for filtering down an every growing number of possibilities.

Even the premise of average type-in traffic is flawed... consider this, the forgone authority on valuating the value of a potential type-in domain is through the use of Overture and the domains OVT scores.

What is OVT? It's the number of times a keyword is typed into a search engine associated with Yahoo's search network. High value is assessed when a domain, with ext., is found in high volume on OVT.

This happens when someone types in a domain address into a SEARCH bar... NOT the Navigation bar.

SEARCH BAR.

Not only does this presume that the standard by which value is measured relies on the mistakes of the Computer illiterate, it also proves the instinctual use of SEARCH engines.

No... search engines and their usage is not going away. Not by any stretch of the imagination. Like you, I have my opinions. :)

The only question is whether or not search engines will completely wipe out type-n-pray "what's behind door number one" nav bar antics or whether it will be the continued abuse of Pay Per Click Frauders whom I believe are the same people that work to use Search Engine algorithms for their own personal gain thereby ruining BOTH benefits for all of us.

GoPC

vite_rts




msg:3161980
 1:49 am on Nov 20, 2006 (gmt 0)

What do you guys think about the chances of .biz challenging .com

Infact , with increasing public internet awareness, will people experiment with .biz, .info, .net, .org

or will they dive straight into the SE's

P.s. I've been looking at many actual type-in figures for some mighty generic domain names, the figures are a bit pathetic

gregbo




msg:3162052
 3:13 am on Nov 20, 2006 (gmt 0)

What do you guys think about the chances of .biz challenging .com

I don't think it's likely, because of the branding of .com. Perhaps if someone offers very very cheap registration.

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