“The Revolution will not be televised… you will not be able to stay at home… you will not be able to plug in, turn on and off… the revolution will not be a repeat, brothers… The revolution will be alive.” …Gil Scott-Heron

I (along with fellow SEOs John Andrews, Dustin Woodard, Aaron Wall, Chuck Price, and Dave Bascom) attended the 2007 Domain Roundtable in Seattle. A lot has been written about domains recently by SEOs… some of it free and some of it uninformed. I find the domain fascinating because I see it as an online extension of old-school business that is also reasonably immune to changing search engine algorithms. Even more compelling, the amount of money successful domains make on their investments is downright terrifying.

Domain names are active

The parallels between Domain Names and Conventional Real Estate run deep. A domain name can be compared to “raw developable land” (which can be left fallow or developed). The domain name can be “parked” for income or “developed” into a business.

domain parking

To park a domain, a domain owner forwards the domain’s DNS to a parking company. It then tells the parking company what kind of ads to show on the page (by category, by keyword, or both). The domain owner can then “optimize” the parked page by choosing a user-friendly page layout and ad content for the page for ads that better match the theme of the website URL and also offer the domain owner the best CPE.

Parked domains typically get visitors and earn revenue from “typing traffic,” where a web user types search terms into the browser without spaces (followed by a .com or other extension). However, if the parked website has previous link popularity, it could also receive traffic from people following those links.

website development

A domain owner could also do a cost-benefit analysis and decide to “grow” the domain name through site creation. Most domain managers lack some, if not all, site development skills, so a true domain manager will only do development with the strongest generic brands due to the cost involved.

The level of development of the site could depend a bit on the intention of the domain administrator. Are you planning to keep the domain long-term or do you plan to sell it? Either way, a developed site is all about “profits and losses”… that’s how a domain manager assesses the return on their investment.

Some take site development a step further. For example, Mike “Zappy” Zapolin, for some of his super premium domains, will form a corporation, hire a CEO, and build a significant business presence around the purchase of his generic name.

Have you noticed recently on business shows that many of the interviewees are from “generickkeyword.com”? Behind that business is probably a domain manager trying to get the maximum ROI from your investment in premium domains.

domain values

Hopefully, most SEOs now know that the intrinsic value of a domain name can far outweigh the slight increased search engine benefit of having the specific keyword present in it. Each generic keyword dot com domain is unique and can only have one owner. Each will also monitor a constant level of click traffic. Previously, many domain owners believed that the domain value was 5-10 times their annual PPC income… however, this rule of thumb has been mostly debunked. A domain is worth what a willing buyer will pay for it, and domain appraisal seems to be an inexact science.

The desire of many companies to brand themselves with a generic dot com domain combined with the incredible dearth of quality premium names is driving their value through the roof…

…and yet there is plenty of room for newbies to make money in the market. Learn the basic rules, be perceptive, take a 5-year-old nap, and you just might be able to collect quite a bit.

What is a Domainer conference like?

Low key. Mellow. Relaxed. Welcome. The business and social acumen of everyone I met was extremely high. There is no Jason Calcanises in the domain world…everyone I spoke to was very interested in SEO and how it could help domains earn more for their investment. Also, I couldn’t imagine a more newbie-friendly group of people answering the kind of questions that would have caused me to gloss over at an SEO conference. Even when I obviously hit the stalls just to pick up the goodies (thanks for the t-shirt Michelle), people still offered themselves as resources to help a domain newbie learn the industry.

Also, having attended SEO conferences, it was hard to imagine that the stars of the industry seemed so “normal”. Just by looking at Frank Schilling at the conference (his keynote address of his was extraordinary…watch it or listen to it), he would never be able to guess how incredibly successful and influential he is. Even more surprising is the level of respect and deference attendees gave to leading domain users. Sure, people chatted with them, but they didn’t attract crazy crowds of people seeking networking or advice. They were allowed to orchestrate their own maneuvers during the conference and conduct their business. Could Danny or Rand walk through the conference room without gathering a crowd? I do not think.

Conclusion #1

Domain users know that SEO can add value to their investment and our overall reputation in the domain community appears to be quite good. Even Frank Schilling mentioned in his keynote that his “Fall Traffic Initiative” would likely include an SEO component. However, we need to know your needs and speak your language. They want to know about ROI and profit/loss… they don’t care about “SEO-Speak”. An SEO also needs to know that a premium domain name isn’t just a business’s online presence… it’s the business. The first premium domain ruined by an SEO company will destroy our reputation in the domain community… don’t let this happen.

Conclusion #2

The domain industry now is like SEO in the year 2000, when I started learning how to search. There are still plenty of opportunities to jump in, learn the ropes, and make spectacular profits. Articles about domain names are hitting local newspapers, hyping the industry and attracting conference attendees like Trader Wayne, who sees the domain as a natural extension of web entrepreneurship. Domain conferences will soon be as crowded as search conferences, if not more so. SEOs have a built-in advantage over other industry players if they are willing to adapt to the rules of a new game… the high levels of intuition and insight common to top search marketers will translate well to domains.

Conclusion #3

SEO is a great vehicle for getting to a destination, but it’s rarely a destination itself…don’t be afraid to leverage SEO knowledge for something bigger and better.