in Digital & Tech

My domaning strategy moving forward

What is my domaining strategy moving forward in 2013/2014? I have had this question posed to me over a dozen times this year so would like to share it with all of you. Personally, I am bullish on .com and ccTLDs for the next few years. I feel the new TLDs are going to create a lot of confusion and its going to drive up the price of the gold standard which is .com and respective ccTLDs for the different countries that prefer their ccTLD over a .com. The same happens in other industries like stocks so I do not think this will be any different. When confusion and uncertainty creeps into the stock market, investors buy gold and other commodities (typically what can be mined and grown) such as iron ore, crude oil, coal, salt, sugar, tea, coffee beans, soybeans, aluminum, copper, rice, wheat, silver, palladium, and platinum to name a few.

I will sit on the sidelines and study the trends while consolidating my .com and ccTLD holding and potentially step in where I see opportunity. The key is to stay light on your feet and be able to react to opportunities very quickly. I am thinning out my net/org long-tail holding to lower renewal costs and fine-tune my portfolio to hold only assets that earn their keep and provide me with an ROI on a yearly basis. I have already built out about half of my domain assets into websites so the revenues generated from a website is significantly higher then a parked domain in 99% of the cases.

Some of the less educated dominers and newbies will waste a lot of money on the new TLDs, just like what we saw with mobi / tel / pro / name / biz …etc. Throwing away money at worthless assets. There will be an initial rush for the premium generic words in many of the new publicly available TLDs but they will initially come at premium prices. Time will tell if these were good investments. Just like any IPO, I think there will be a drop in values as the novelty wheres off and confusion sets in as there are going to be more failures then successes due to the complexity of marketing a new TLD and the budgets required. This could create an opportunity to step in and get some nice generics at depressed pricing if the TLD and the strategy behind it has potential. We will only know this once the registries actually start their marketing campaigns and put paper into action.

For me, I am trying to already drop my portfolio renewal cost down to about 60% of what it was a year ago and I am at about 80% right now as I started this process in May 2012. I will then be better equipped to take advantage of new TLDs should I see an opportunity arise with new money.

Most of the long tail net/org I am selling is in the 3 figure range, it use to be 4 but now its 3 and 4 figures is seldom achieved on these assets. Prices have really dropped for EMD net/org due to google’s algorithmic changes. But I acquired them for under $15 so still a very good ROI and we are moving about 1 domain a day so still good money and allows me to divest into other assets and development.

I have noticed that about 10-20% of my drops are being picked up and renewed by others. I expected this. I have just raised the threshold of what I am keeping and many would still have a lower threshold so it makes sense for them to catch them. For me they need to have an intrinsic value of at least $100 USD liquidatable in the next 1-2 years for me to keep them. I do not see them holding much value 3-5 years from now so the people catching them need to monetize/sell them in the next 2-3 years or they will probably run into losses and have to drop them.

Some advice to domainers and newbies moving forward:
1) Be very carefull registering trademarks. You can loose them. The registrars will simply take them off you without warning if the holder complains. You can search us marks here http://tess2.uspto.gov/

2) Do not go up against big trademarks like Yahoo, Google, Apple …etc. You will loose your domain and worse yet they can take you to court and you can be fine up to 100k USD plus any revenues you made off the domain. So be careful.

3) Focus on .com and ccTLDs. .TV is a wise investment too. But only go for generic short 1 word names in this TLD. .net/org are also good investments but only go for good commercial words and phrases with 1-3 words.

4) Typos should only be considered in .com extension

5) Acronyms are fine but stick to 4 digits or less and only in com/net/org/tv/ccTLD

6) Diversity your holdings into multiple industries.

7) Extensions not to register unless you have a 1 word commercial term like mortgage, money, realestate, houses, domain …etc are: biz, info, mobi, me, ws, cc, sc, co, and all 2 letter extensions like these.

8) .xxx is a special extension. Its a good extension but only for highly searched or brandable terms. Owning phrases in xxx will allow you to own .sex/.adult/.porn free of charge in the near future.

9) Be careful with the new TLDs. Most of them will fail. The ones that do succeed will be worth investing in but not on a long-tail strategy. You will need to buy 1-2 word brandable and generics in new TLDs.

10) Have fun!

Hope this helps…..feel free to contact me with questions if you need advice.

Follow up articles you should read on the topic of domain investing:
Longtail Domain Investment and Risk Management

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