Morning Folks!!
The domain game is not changing. The world is evolving. Domains are exactly the same. You have two basic types of domains. Ones with great FACE value and those with NO FACE VALUE. Face value domains are just easier to develop into a business. When a domain has no face value and is pigeon shit on the surface,then the idea has to carry the day.
It's been about 2 or 3 years since I started defining pigeon shit domains. But now it is time to define the very best domains. The domains that mean something. Domains that can transform a business. Even a 37 year old local candy company in New England.
So now we are talking about lease quality domains. As I have been saying...a very narrow field. A long time domain player has also made the plunge into leasing as have others and by the end of 2013 LEASING will be all the rage with domainers for a simple reason. It takes a $10 a month domain and transforms it into a $1000 a month domain. Domainers will RUN at that opportunity.
Each time a company announces their leasing program it will just reinforce what we do at JointVentures.com and why we do it. The difference is the 'How'.
I have poured thru over 30,000 submitted domains and have found 250 that will fit that narrow pipeline. JointVentures.com will distinguish ourselves by the deals we do. Of my own domains I have identified 750 out of 6000 that are what I would call good leasing candidates. So just 15% of my own portfolio would qualify after I let 1000 more names drop in the next 12 months.
Folks don't think they can do BIG things. Well I think in 2013 I will demonstrate when you have a big idea and others see the wisdom in that idea then folks will jump on board. Domain leasing IS the way of the future for domainers. Don't take my word for it. WATCH! Watch what happens and what is happening. It is the way today and it was the way in 1995. How do you vault over all those years?
People talk about branding. I can safely say that in basically 60 days we have branded JointVentures.com. Maybe not to the world. Not yet. But to the domain community. We have branded ourselves and it cost pocket change to do. It was the idea and the domain and the track record. A record that is about to be broken each and every time a new domain company announces their leasing plan.
Leasing has come of age. It is acceptable. It will become more and more acceptable. And it will change lives in a very dramatic way if used wisely.
So congrats and cheers my friends in Turkey and to each and every domain leasing company to come to market! In business the key is staying one step ahead.
Have a GREAT Day!
Rick Schwartz
Jay
…same as you cannot lease some extra premium domain names. Not every domain name fits this business model.
Rick Schwartz
Jay,
That is exactly true. Leasing is no reflection on the quality of name alone. I have many that are earners and do well and are among my best domains but have no chance of leasing to a 3rd party. At least not at this point in time. That is why I always take the time to mention what a narrow field it is.
Even with 10 really premium names. Only 1 or 2 may qualify for leasing.
Anunt
Mahatma Gandhi…first they ignore u, then they laugh at u, then they fight u, then u win…
Furkat
I can’t wait when it happens.
Turneffe
Thanks for continuing to evangelize domain names potential, Rick. If it were not for folks like you the word may never get out.
I just closed another lease deal this past weekend. Very small potatoes, but it went from about $40 a year parked, to $400 leased. I can live with that, especially if I can continue to duplicate it enough times.
Patrick Hipskind
Hi Rick,
Without question, every domain investor knows you can spot a great domain name. Is it possible though that you over look some large carat diamonds hidden in the dirt when diamond mining? If for example someone wanted to buy Oil.com, I am sure they would have to pony up millions of dollars. Oil drilling activities though can be divided into two types: offshore and onshore. The domain name OffshoreOil.com is being used by an oil business that provides transportation and freight services to deep sea oil rigs. The business has millions of dollars in fixed assets in the form of yachts, and other plant and equipment. That would make the domain name OffshoreOil.com worth a substantial amount of money as an intangible fixed asset on the balance sheet.
The oil industry, however, is rapidly changing in the United States and the world. Onshore oil activities are quickly overtaking offshore oil drilling and exploration. Oil production increased in Texas by 22% during 2011 and 35% in North Dakota. The United States will become the world’s leading producer of oil by 2020, mainly from onshore oil activities in the Bakken and other shale formations as a result of fracturing (fracking). I believe that makes the domain name OnshoreOil.com very valuable, based on current and future market trends and considering that “Onshore Oil” already gets 73 exact global searches a month on the Google search engine.
More importantly is the fact that the domain name OnshoreOil.com could be used to provide services that generate millions of dollars in revenue annually. That would make the value of the domain name substantial as an intangible fixed asset on the balance sheet. It would then be much easier to acquire additional financing for growth of operations and would substantially increase shareholder value.
I believe that domain name valuation must consider current and future market trends, the size of the market, as well as the price per unit sold using the domain name. The cost of goods sold is often lower for a higher priced item than it is for a lower priced item, and the margins are often better. Lower priced items are usually sold in volume with a smaller profit margin, and many times it is more capital intensive to produce and sell a lower priced item.
When registering or buying a domain name, domain investors should assess the current and future market. They should conduct some market research as part of the due diligence process. And you may want to consider reviewing this information when deciding upon domain names for listing with JointVentures.com.
GiveMeABreak.com
I love how people with essentially worthless names write huge paragraphs of white noise disguised as commentary while mentioning/pumping their loser domain name. I see this everywhere on the forums, too, and it is getting pretty old.
OnshoreOil.com doesn’t have a lot of value. A name doesn’t have value just because YOU happen to own it. Shame on your for making me read your gibberish. You obviously don’t know what makes a domain name have huge value.
Martin
Hey Givemeabreak,
Why the need to be a dick?
I didn’t read anything objectively offensive in what Patrick wrote but your post is everything that is wrong with the world, imvho.
Seriously man….being cool is its own virtue.
UFO
In the upstream oil and gas extraction you’d need to be on a specialist preferred supplier list to even get a look in.
Only thing you might get is people looking for oil jobs, but the keyword ‘jobs’ pretty much spells it out.
Patrick Hipskind
You may not want to pay $500 for it,but my point is that if a domain name can substantially add to the balance sheet as an intangible fixed asset because it is an industry defining domain name then a lot of domain investors are undervaluing some of their premium dot coms.
I’ve noticed that Mike Mann values his domains in part based upon the number of Google search results and the degree to which the domain name is a category defining domain name. Check out DomainMarket.com.
This domain name that is worthless to you is one of the two basic types of oil production. It has 3,450,000 search results on Google. I’m sure the owners of OffshoreOil.com wouldn’t part with it for anything less than a million. Go ask them, maybe I am wrong.
The main tool of the trade for financial managers when determining whether or not to purchase an expensive asset is to calculate the Net Present Value of the asset as well as the Internal Rate of Return. That means discounting future cash flows back to the present time, and determining the discount rate that they will receive on the money they invest.
Domain investors should seriously consider using NPV and IRR in their valuations of domain names, as well as the amount of value the domain name adds to the balance sheet as an intangible asset. Why should you or I sell a premium .com for $5,000 to $10,000 to a company that can turn around and make $50 million to $100 million or more with it? Prime real estate is a limited resource, and so are premium .com domain names.
UFO
Hi Patrick, I know you’re following a very Corp Finance approach but valuations conducted often have an angle on them that best suits the purchasers.
For instance, if you’re just buying a domain name then you can value it at Zero and write it off for tax like normal IP in terms of intellectual property (Like trademark registration costs).
However if you’re buying a domain as part of a going concern then you might want to value it highly as part of the transaction so you can write it down over time for tax more efficiently than goodwill. (I’m not a tax expert but I’ve seen many cats skinned differently).
In terms of DCF a holder of a domain (unless it’s leased) is only going to have one terminal receipt and that’s anyone’s guess, there’s little intrinsic value to a domain, the best would be discounting future CPC which would massively undervalue a domain. Sure you can do some market reference but onshoreoil.com would only come out $xk at most.
You say that a domain could be worth unlimited amounts to a buyer, but that depends on the buyer, plenty of buyers have bought names for huge amounts and I’d say they’d have trouble getting back anything like that amount in the secondary market, so in terms of balance sheer value very tricky. (Anyway, you’d be looking to aggressively write it down – remember that DCF works best to get your tax back asap).
Lastly, imho a domain has three value points. 1) As a simple DCF on its ppc 2) As a resale into the secondary market and 3) As part of a going concern.
Davinderpal Bhatia
Looking forward to the 3rd and final list. No matter what some people may say, based on your track record and domains selected,things will be fine.
Danny Welsh
RE your comment Rick:”Folks don’t think they can do BIG things. Well I think in 2013 I will demonstrate when you have a big idea and others see the wisdom in that idea then folks will jump on board.”
It’s all about getting the bus moving and then folks can get on the bus. Finding the right seat for everybody on the bus.
RE:”Domain leasing IS the way of the future for domainers. Don’t take my word for it. WATCH! Watch what happens and what is happening. It is the way today and it was the way in 1995. How do you vault over all those years?”
I know how *I* vaulted over the years. Others will figure it out, too, and I expect a lot of very smart, very sharp salespeople that”get” domains values will see the benefit soon in working with the sub-broker program we talked about.
Danny Welsh
JointVentures.com
Jeff Schneider
Hi Rick,
Those who know you as well as I do realize the signifigance of the .COM foundations you have sifted through to find this list of Gems, who in your expert estimation have made the final cut. This in effect, is a wish list of future generational leaders that will surely unlock the true Strategic Marketing values of Prime .COM Foundations.
There will be a lucky few End Users who heed your call at first and then more and more as the word gets out about your successes. There is no higher or better use of an End Users time than to educate himself on the power of .COM foundations as a Strategic Asset in their arsenal for online success. Readers of your Blog, once educated, will come to realize that .COM Foundations are the most powerful Marketing Tool of all options available to them.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)