Morning Folks!!
My partner with JointVentures.com is busy working on our next phase for 2013, but has provided me with a few guest blog posts in a series he’s written to help folks get to know who he is and why I specifically chose him to help spearhead the next phase in my 20 year plan. This one is about the value in the pumping of oil and distributing it versus the selling of land with oil included. Here’s what I know in my gut...not a single one of us among “the 500” will live long enough to unlock the FULL value of what we own. I’ll let Danny explain what we both see in his words that smooth out some of my rough edges.
Rick Schwartz
By Danny Welsh
Parking domains is not the greatest way to tap the oil well, but it’s the best of what domain investors have had easily available for a number of years to unlock the value of the oil pumping up through gushers on their property (while leaving OCEANS of the most valuable oil deep down beneath the earth…out of reach).
No matter how many parties these domain parking companies throw for their customers, though… Rick Schwartz and I both believe that parking income is going to become the lowest common denominator for monetizing a great domain name as things evolve and the Net matures and mainstream business catches on to the sales potential of pairing a great domain with a great business.
No matter how pretty and ȕber-technical the platforms are that these domain sales churn-mills have created for domain owners to use, here is our position loud and clear and on the record for the record.
Any cash-only sale in the next few years for the BEST .com domain names
WILL prove to be a short-term gain giving up the possibility for
ongoing income…and even generational wealth.
Domain parking to me is the equivalent of a horny guy asking 25 women in a row 'Wanna have sex?' until finding one that will ‘double-click his mouse’.
It works to get a result— I can speak from experience in my early 20s ;) — but it ain't the best way to go about dating…much less starting a long-term relationship.
That said, I do agree with many that the best easily-implemented (and scaled) monetization solution for the next couple years may very well be parking companies owned and run by domainers, that cut the fat and negotiate pricing per click direct with the Google or Yahoo upstream providers of the world.
That's Frank Schilling's model with InternetTraffic.com and there's no surprise Rick Schwartz as well as many of 'the 500' have made the smart decision to become Frank's customers.
But what about after that next couple years?
Is domain parking alone as a monetization model for the rest of your life all you want for the very best of your premium dot com domain assets?
Are you content to sell the little bit of oil that bubbles up without effort from your oil well, and get paid in dribs and drabs while an OCEAN of VALUABLE CRUDE OIL lies beneath the surface on your land?
If so, roll the dice and hope the parking model continues that long!
(a little birdie with a big mouth tells me that parking earnings are off
90% from highs right now…and the BIG $$$ SQUEEZE is on for folks
that have bloated portfolios focusing on quantity, not quality)
Is selling your best premium dot com assets for today’s 6 or 7 figure price offered to you when you KNOW in your gut that their VALUE will continue going up all you want?
If you don’t think domain parking alone is the best solution for your best domain names, and you don’t want to sell your BEST properties for cash alone…you're probably right now like Rick himself has been in the last few years-- diligently searching for a new formula to unlock MUCH more of your property's value than parking income.
And if one cannot be found, maybe even like Rick have been tinkering with the idea of even creating that formula yourself.
In my inaugural guest post on RicksBlog I said I’d be posting in the future to answer this question:
How much difference is there between selling the oil for distribution, and retaining the land with the mineral assets versus selling the land itself and letting someone else have the produce of the wells drilled for oil? What are the parallels of the richest oil fields with the very best internet properties owned by domain name owners?
From what I can tell other than RICK SCHWARTZ it is RARE that a company agrees to buy a domain name (or an “oil well” in this analogy) with ongoing royalty income to the previous domain name owner.
There are LOTS of reasons for that,
but it ain't the VALUE of the oil well.
Billionaire ‘wildcatter’ oil man J. Paul Getty could explain it if he were still alive.
That's the guy known now for saying IIRC 'If you can physically count your money, you don't yet have a billion dollars.' The guy who in 1966’s Guiness Book of World Records was named the world’s richest man…that guy.
Early in his career, Getty saw the same thing in the parallel of oil companies: the longer-term, big-money, residual profits in the pumping of oil and distributing it for sale by the barrel (the deal J. Paul Getty wanted) versus the short-term, small-money, one-time profits in selling of land with oil included (the deal the oil buyers wanted).
He had to FIGHT to sell the oil he found by the barrel because the biggest players among oil buyers only wanted to buy the LAND and cut him out from residuals.
They SUCCEEDED in cutting out many other entrepreneurial ‘wildcatters’ that took the same risks Getty did and did the same work Getty did to FIND and TAP the same kind of oil wells. Gave ‘em a check and sent them on their way, to go on to make ROI’s unheard-of in history.
But not J. Paul Getty, oh no.
This guy had vision (and balls).
The man who would go on to become the richest man in the world was WEEKS from losing everything with billions of barrels of oil stockpiled in warehouses he could barely afford the lease payments on even while borrowing every dime he could get... facing a powerful group of companies that were offering to buy his land and oil wells but who REFUSED to pay per barrel for the oil the wells on those lands were producing.
But he didn't bow to the pressure to sell his assets without ongoing income.
“No, the land is not for sale”, Getty said. “Oil only”
[paraphrased]
You want to see a dozen Pure Domainers among the “500” on the Forbes billionaires list down the road? You want to have a chance for the mainstream business world to catch up and realize just how valuable these oil wells owned by top generic domain investors are (as they are realizing more and more by the DAY). You want to position yourself and your family for generational wealth?
It’s the same formula Getty used I believe, and it ain’t reinventing the wheel. It’s just looking at history and how things unfold, and assigning a value to what you own…refusing to accept less no matter how great the pressure gets.
(And you ain’t seen NOTHING yet if you think the pressure to sell at today’s price is great right now. Wait ‘til the media gets ahold of what is happening with this growing trend of domain name owners refusing to sell their best .com properties for cash only. The first mainstream stories in 2013 will NOT be pretty. They will paint domain investors as greedy. Scavengers. Squatters. Assholes. Inhibitors of progress. Infringers. Every name in the book.)
This year we’ll share many more deals completed using the formula for unlocking ongoing 'forever' value with royalties that was CREATED FOR RICK SCHWARTZ BY RICK SCHWARTZ that now others too can use and share in— IF their domains are of top-shelf quality, and they too want a part of the 'forever' vision for earnings as a great domain name becomes part of a GREAT business run by a passionate and qualified end user company.
But our deals are only part of the equation. The real power lies in the community of the 500, and that small number of domain name owners beyond that fortunate 500 that have one or more domain names that are valuable enough as of RIGHT NOW to be leased to the right company for 100x parking income.
You want to really shake things up among the big oil buyers?
Imagine thousands of the most premium category-defining domain names in the world, all owned by independent companies, and for each “How much is this domain to buy?” inquiry, the reply is: “Not for sale, lease only!”
Pair that resolve with a firm stance not to accept any sale (at any amount) for your best domain name properties that does not include at least some ongoing royalty revenue or other income. Pair that with a string of growing Candy.com success stories that will show that we are proposing a WIN-WIN, and not taking advantage of any company, and that will make the media back off and change their tune that will be calling domain investors “greedy”.One day they will call you VISIONARIES, just like they do the Getty’s of the world. Even Frank talks of Getty from his post nearly 3 years ago.
So let the oil flow downhill, where it’s going, for now. Sell the trickle of oil that comes up in your wells with no effort via domain parking. Keep the income coming in, without any interruption. So will Rick Schwartz for the next few years, with few exceptions for different crazy marketing tests I talk him into. :) That’s fine.
But do this too for the next 3 years and we believe you cannot lose: Tell the companies that want to buy your oil well itself that it’s not for sale in a cash-only transaction. Tell them you KNOW how big the OCEANS of oil are underneath. Tell them you MUST share in the upside with a fair ongoing income once the well is worked to bring that ocean of salable oil to the surface.
Whether you’re part of our 300 with JointVentures.com or not this year, the game is the same.
Now is not the time to fold. It’s time to double down on the bet you already made.
Channel your inner wildcatter.
Because, to quote the man Getty: “The meek may inherit the earth, but not its mineral rights”.
Jeff Schneider
Hi Danny,
Brilliant ! I could not have said it any better. Let that wave build !
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
Joshua
Thank you
eh
Danny,
that is a brilliant analogy. You have painted a beautiful picture of the future. I can see it and I am with you.
thanks
Martin
GOOD STUFF Danny!!!!
http://www.youtube.com/watch?v=RKQ3LXHKB34
Patrick Hipskind
Hi Danny,
It’s great that you and Rick are working so hard to help domain name investors get their fair slice of the pie. Over the past several years, domain investors have been hit hard in the wallet by a significant decline in parking revenue. As Google’s net profit soars to over $41 billion annually, domain investors and domain name developers struggle to pay their bills and put food on their table.
It seems like the battle against Google is a lost cause, like David standing up to Goliath. As a collective group, we can make an impact over time by using other websites that take away from Google’s bottom line. As a group over time, we can also help Google’s competitors who give us a better deal establish a competitive advantage in the marketplace. The following list is from Google’s 10K report. Use this list to bring about change in search engine marketing practices that gives domain name investors and domain name developers a fair slice of the search engine advertising pie. The more we do as a collective group, the more we restore the balance in payouts and earn a better income while negotiating a deal that gives us a cut of the profits from the companies that want our land for little of nothing.
Competition
Our business is characterized by rapid change and converging, as well as new and disruptive, technologies. We face formidable competition in every aspect of our business, particularly from companies that seek to connect people with information on the web and provide them with relevant advertising. We face competition from:
General purpose search engines, such as Yahoo and Microsoft’s Bing.
Vertical search engines and e-commerce websites, such as Kayak (travel queries), Monster.com (job queries), WebMD (for health queries), and Amazon.com and eBay (e-commerce). Some users will navigate directly to such websites rather than go through Google.
Social networks, such as Facebook and Twitter. Some users are relying more on social networks for product or service referrals, rather than seeking information through general purpose search engines.
Other forms of advertising, such as television, radio, newspapers, magazines, billboards, and yellow pages, for ad dollars. Our advertisers typically advertise in multiple media, both online and offline.
Mobile applications on iPhone and Android devices, which allow users to access information directly from a publisher without using search engines.
Providers of online products and services. A number of our online products and services, including Gmail, YouTube, and Google Docs, compete directly with new and established companies, which offer communication, information, and entertainment services integrated into their products or media properties.
Uzoma
As the proud owner of USPetrol.com , I am very much heartened by the future and narrative portrayed here. I intend to treat my USPetrol.com as both the land and the mineral that it is. If there are any more rooms left in the venture, I want in.
Patrick Hipskind
One correction, my mind was thinking of Apple’s net income. Google’s net income was only $9,737,000,000 during fiscal 2011. Not that it makes much difference because they still managed to eat almost all of the pie.
YouAreTerrible.com
Your posts seem like a blur of white noise. It is very tough to read. It might be time to reflect and figure out another line of work. Maybe you could be the spokesperson for Boring.com.
I am being serious here. You are brutal and say NOTHING.
Danny Welsh
Thanks for the nice words, folks.
Every day we are getting emails from more domainers and companies that are doing something similar to what Rick and I are doing. At the very least that are saying”Not for sale, lease only” to their unsolicited inquiries from potential buyers on their very BEST domain names.
So that’s encouraging, even for those that are not a part of JointVentures.com because their submissions aren’t a good”fit” for our initial inventory, or because they are just DIY types.
Either way, the message WILL get across.
See you on the oil fields. I’ll be the guy working the pumps like crazy!
Danny Welsh
JointVentures.com
Jeff Schneider
Hi Patrick,
I agree with all of what you say. This is a nice summation of all the metrics involved in evaluatiing the Marketing Strategy of all these .COM Foundation companies.
Please remember that the their Fondational .COM address is the conduit that all of their Digitally accessed riches flow through. Money has become more digitally based than actual currency. Here is my important point ! If you were to know the actual percentages of digitally accessed money and what extensions reap the largest percentages the .COM foundation reigns supreme.
Ricks got the right foundations in his selection process for sure. He has got the right Well Heads all he need do is pump.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
Patrick Hipskind
Then don’t read my posts. Do me a favor and skip right over them. You haven’t figured out how to do that yet? If you don’t like them, don’t read them. It’s that simple. That should be your new line of work.
Google doesn’t intend to pay domain investors and the average domain name developer healthy paychecks anytime soon. The only way to better parking revenue and better payouts from other types of monetization, is to hurt Google’s bottom line and have competitors come into the market who cut better deals.
Tia Wood
Well said, Danny and I love the analogy.
Danny Welsh
RE:”Google doesn’t intend to pay domain investors and the average domain name developer healthy paychecks anytime soon. The only way to better parking revenue and better payouts from other types of monetization, is to hurt Google’s bottom line and have competitors come into the market who cut better deals.”
Google has more power than you, me, or Rick Schwartz. True enough. BUT if you believe any one company, however powerful, has more influence than a group of highly committed, passionate entrepreneurs that are aligned in vision and working for their own best interests…I am truly sorry.
That company and every other big company is made up of EMPLOYEES sitting in a cubicle, and no employee sitting in a cubicle under buzzing fluorescent lights listening to Muzak and hoping to clock out soon ANYWHERE in the world will EVER determine the destiny of THIS entrepreneur.
Don’t let them determine yours, either!
I’ve read a lot of your posted comments, Patrick and I can’t get a real read on you or where/how you fit in the”domain universe”. But you seem like you’d make a great ally.
You are obviously quite intelligent and know technical things that are beyond me.
Would you call yourself an entrepreneur? I know you’re proud of the MBA and it is valuable no question, but many folks with that degree work for those that don’t have one (myself included).
Danny Welsh
JointVentures.com
P.S. I guess what I’m asking is…What’s YOUR plan to NOT NEED Google? Rick and I have a pretty good one I think. But it ain’t the only way. It is important though I think in the years ahead.
Craig
Good post and some truly thought provoking comments….thanks to all!
My take (briefly) is that where Google is right now, they don’t even SEE us. With their kind of revenue why would they care?
Well, the ball is still in play….Stay tuned.
Anthony
Every new tld that comes on the market will dilute the value of .com and every other extension for that matter, you can scream, shout and swear all you like. But in the end, .com value will keep diminishing (which is already reflective in the amount of high end .com sales)
Consumer behavior will change as new generation that grows up with mobile Internet and social networks will stop typing .com at the end their queries and starts using real search apps, such as google , twitter and now Facebook.
When this happens you can say good bye to type in traffic and bloated”category killer domain” values.
It’s only a matter of time now…
Patrick Hipskind
Hi Danny,
It’s nice to meet you.
I wish I was one of the 500 domain investors that Rick speaks of, but I am not. I do own several category defining .com domain names in fast growth industries including oil production, cloud computing, and online gaming. My objectives are to sell these domains with an equity stake in the firm, develop one or more as a startup, use them as leverage to purchase an ongoing business, or lease them. Fortunately, I do not need Google to carrying out my plans.
My dislike of Google comes from my empathy for fellow domainers, as well as a few of my own personal experiences. We’ve all read the posts from fellow domain investors: “parking is dead”, “Google wins”, “that’s what penguins do, they slap you”. Most of us have read an article about one well known domain investor who had a million dollar brand delisted. I personally like the WhyPark.com parking platform, but Google won’t give parking platforms with any type of duplicate content a higher search engine ranking than those websites that make them the most money. I have yet to see improved search results from the last few Matt Cutts’ algorithm changes.
I believe that in time Google will implode, by the end of this decade. Their search experience is really pretty archaic. I envision a search engine that gives consumers perks for using it. I see several improvements that can be made with search engines, and maybe in the future I can be a part of that. I believe that if you give Larry Page enough time as CEO of Google he may destroy the company. We just haven’t reached that peak moment in time yet. I hope Larry does spend billions of dollars trying to develop his self-driving automobile concept. I think that real automakers will eat him and Google for lunch. I can’t make a determination about the Motorola acquisition at this point, although many Wall Street analysts are skeptical. Google earns 96% of their revenue from advertising, and although Motorola has several patents the acquisition doesn’t fit well with Google’s core competencies from which it earns the majority of its revenue.
I hope that in the future Danny you and I do become great allies. I excel at market research, competitive intelligence, and analysis. If you ever have the need for someone with these skills let me know.
Warmest Regards,
Patrick
Anunt
I’m confused…please explain…
When i goto NotForSale.com,
On top, it says,”Click Here to acquire”NotForSale.com”
So is it For Sale or NOT???
Davinderpal Bhatia
Hi Danny,
For a domain I regged in early 1999 I declined high $$,$$$ in 2000 and those who knew it were either upset with me or ridiculed me. Last month the same thing repeated, the difference being that offer was a lot higher !!!
Your article came as a bright light in a dark tunnel. You made my day.
Thanks.
Danny Welsh
Great, Dave!
“First they ridicule you…then they…”
Let me just skip to the end = YOU WIN.
Hold firm, buddy.
Danny Welsh
JointVentures.com
P.S. Thanks for the kind words. Now that we’ve made each otehr’s day, one of us has some work to do! :)