Domaining Boom or Bust?

May 26, 2007 Posted by ROI_Guy

Show of hands here, how many think Tyler’s doing smart things with all these StarCraft domains he’s buying and how many think he’s headed toward the yawning chasm of bankruptcy?

Well, myself, I’m going to vote that he knows exactly what he’s doing, and here’s why … way, way smarter and richer people are doing the same thing, and doing it even bigger than they were a few years ago.  I have been poring over a couple really good articles, way to big too squeeze into a blog post, so I’ll drop a couple links and hit the high points.

First, Kevin Ham … even I, old janitor Roy, knew about him before reading the article … he’s described by some as the “Man who owns the Internet”.  A great CNN article here, well worth the read.

http://money.cnn.com/magazines/business2/business2_archive/2007/06/01/100050989/index.htm?postversion=2007052214

Ham is into a lot more than domaining itself … that .cm redirection trick is wicked smart, but the most interesting thing in that whole article to me was the graph showing the growth of domain registrations.  Things that show up easily:

  • .com isn’t just better, it’s _way_ better than any other TLD.
  • The gap between .com and all others is getting wider, faster.
  • Even in the lean years of ’01 and ’02 when everyone was talking about the .com bust, .com registrations were growing nicely.
  • .com registrations are growing today at a faster rate then they were before the “bust”.

Rich as he is, Ham plans to get richer buy building value added sites and services on top of many of his domains, the same way Donald Trump builds office buildings and hotels on top of all those valuable lots he owns.

The second guy I came across is Frank Schilling.  Frank would be an awesome domain kingpin too, against almost anyone except Kevin Ham.  There’s a nice interview with Frank here:

http://www.seobook.com/archives/002242.shtml

Frank gives a lot of good advice and you have to grant that he certainly has his money where his mouth is.

Your takeaway from the strategy of both the domain mega-giants?  Buy names that are worth something to you, for their intrinsic value, and buy with the idea of being able to build value on each domain you pick up.

The first thing you really need to add value is to have a love of the subject, a passion for it.  Tyler’s crazy about StarCraft.  I’m a sucker for anything with GPS in the name.  What’s your passion?

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Posted: May 26th, 2007 under Miscellaneous  

8 Responses to “Domaining Boom or Bust?”

  1. Barman says:

    With the staying power of the original Starcraft, I think it’s a great idea to snatch up all those domains. Really the only way Tyler would lose out is if the game was a complete fluke and no one played it… but that’s kind of hard because if all they do is a graphics overall of the original Starcraft, people will still play it.

  2. lee says:

    I was offered a domain 7 years ago for $50k and at the time i could not afford it. Last year it sold for $5 million :(

  3. I’m surprised Mr Ham hasn’t made a trip to BuyDomains.com… They have one or two beauties that are undervalued.

  4. ToddW says:

    Good advice. I buy domains that are in my hobbey and that I am interested in developing in the future. I let a couple drop on accident but am tryin gto stay on top them now!

    I suggest regging domains at ONE place an dusing auto-renew to prevent any accidents ;)

    -Todd

  5. I think Kevin Ham is overpaying for a lot of those domains mentioned in the article. He claims that he wants to build out sites to realize their full value. If you are going to go through the trouble to build out a site complete with getting links, SEO, and whatever else, the domain name doesn’t add a lot of value. Its all the work that goes into building the site that adds so much value.

    • ROI_Guy says:

      I would tend to agree with you, in some ways, simply because I am just a “little guy” and that kind of money just about scares me. I’m not sure I could spand that kind of money if I had it in my hand.

      OTOH, who am I to say he’s paying too much? He makes more on his mistakes than most of us do with our successes, so who is really to say?

      Remember that when Ham talks about “building out” he does not mean scrounging for links and SEO, Technorati rank and all those other geeky things. He buys type-in domains, for the most part. The vast majority of on line users don’t even use search engines and could give a care about page rank … they want a wedding cake they type in “weddingcake.com” and see what happens. _no_ amount of SEO and link build ing will make “myWeddingCake.info” outscore “weddingcake.com” for the type-in user … it will never even come into play.

      In 10 years Ham will either be richer than Bill Gates or else an asterisk in the history books.

  6. James Asbury says:

    So, where is Mr. Ham today? Bankrupt?

PeerFly

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