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Domain summit 2024

closed revenue models revisited

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dotsofdomains

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Cyber-speculation is, of course, fun, but if money-making is the goal, a revenue model is absolutely necessary.

Some players cyber-stake--registering domains that have trademark potential, but do not infringe existing trademarks--and hope that they have picked a domain that someone else would like to put to commercial use or speculate upon. The real return is here, provided the speculator has a good "branding" sense, an appreciation of the way marketing and corporate types think, and can hang in for the long haul. The windfalls will still occur, but they will be rare. Maybe you will pick the perfect dot-com that a pharmaceutical company's brand identity focus group has decided it simply must have. Maybe not.

Others play the churn--making bucks off of a contractually agreed upon transfer fee. Register for $8, sell on eBay for $1, but charge $14 to the buyer for an otherwise free transfer--bottom line ($1+14-8 = $7 profit). In this market, making 5 to 15 bucks on such a transfer fee and doing so again and again appears to be a sound strategy.

Have fun with the dot-whatevers, but don't expect to make much money at it. Few businesses that intend to be taken seriously will ever pay good money for anything but a dot-com address. Even dot-net has been devalued as a consequence of the expansion in TLDs. Basically now, anything but a dot-com is just a garden-variety domain. Unless you own business.whatever or sex.whatever, you own a big-yawn-registration.whatever.

Hey, that's my opinion.

--dod
 
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namedancer

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Dotsof, sounds like you have a down-to-earth, realistic knowledge of today's market. I definitely agree that dot-com is the only way to go, unless you have a dot-whatever with the com with it. But I'm not quite ready to go $7 per name via ebay, esp. since you forgot to deduct the cost of the ebay listing. So say $4 net profit for the time involved in finding the name, regging the name, preparing the ebay listing, listing it, and transferring it when and if it sells. Of course the name might bring more than $1. But what about the cost of the ebay listings that don't get a bid?

Maybe we're both on the wrong track. Tonight's Urly Indicator from Afternic had this:

"Many of you have noticed that our transaction volume is stretching our DNescrow system to the limit. This year we rededicated our support team to focus solely on closings, but processing the number of sales we generate continues to test our capacity."

That many sales even with the fees they charge? What are we missing?
 

dotsofdomains

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Dancer:

That's pure register.com puffery. The gullible will buy silly or stupid names on register.com's AfterNIC website, certainly.

So, to add to your observation, we should add that there is a newbie domain name market for those who still think that any domain with 3 or 4 characters or any combination of two common words is valuable. These people trade commercially valueless names with each other. That is, nevertheless, a market. The only "good" associated with the domain, however, is the "speculative domain name value."

My 2 cents, less copper than before, but Lincoln is still there.
 

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Originally posted by namedancer


"Many of you have noticed that our transaction volume is stretching our DNescrow system to the limit. This year we rededicated our support team to focus solely on closings, but processing the number of sales we generate continues to test our capacity."

That many sales even with the fees they charge? What are we missing?

Don't beleive the hype, have a look through afternic any you'll see they average less than 2 sales per day (no joke), I doubt great domains is much better. And how many of those sales are real 50%? less? Ebay is the only auction site worth using in my opinion.
 

dotsofdomains

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Well said, dear moderator.
 
T

Tee

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Moderator's Note:

*this post has been edited for Olde English 800 content*
 

mole

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Since we are on the subject of evaluation models, how does one take into account future value?

Correspondingly, how does one benchmark value with little or no existing benchmarks to compare?

Everyone seems to appreciate the fact that dotcom is the best extension for memorability, type-in and monkey-see-monkey-do resale value.

Not many seem to offer clues on what will become of the near future.
 

Guest
Surely future value is a function of value today; Thus if people think a domain to be worth $10,000 in 5 years then its value now would reflect that? And you would think current values would also reflect the probability of a particular domain producing big payoffs in the future, just like stocks.
 

mole

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Not necessarily. Look at the stock market. You bank on blue chip stocks, or you buy future potential stocks. Those who banked on blue chip stocks like Enron have seen their fortunes whisked away.
 

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yes, thats where the probability issue comes into it. The chance of losing on blue chips is low, but if that occurs you lose your money like with enron.

The chance of a hypothetical stock being worth $100 for example in 2 years may be 95%, the chance of it being worth $0 (bankrupt) may be 5%. So you say the value of stock is somewhat less than $100 to allow for that risk.

Just like domains, you could simplify things and say (just as an example) sex.biz might be worth $1 million in 10 years, and the chance of this happening is 2%, you could say the only other alternative is that .biz will tank and even sex.biz will be worthless.

So based on those assumptions and ignoring everything else wouldn't you say the domain should be worth around 0.02*$1,000,000 = $20,000 today?
 

flex

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Originally posted by snoopy
yes, thats where the probability issue comes into it. The chance of losing on blue chips is low, but if that occurs you lose your money like with enron.

The chance of a hypothetical stock being worth $100 for example in 2 years may be 95%, the chance of it being worth $0 (bankrupt) may be 5%. So you say the value of stock is somewhat less than $100 to allow for that risk.

Just like domains, you could simplify things and say (just as an example) sex.biz might be worth $1 million in 10 years, and the chance of this happening is 2%, you could say the only other alternative is that .biz will tank and even sex.biz will be worthless.

So based on those assumptions and ignoring everything else wouldn't you say the domain should be worth around 0.02*$1,000,000 = $20,000 today?

it's really hard/almost impossible to gauge out with a satisfactory price tag for domain name for the upcoming years. i wouldn't wanna find out either :D
cuz' 99.998% of my assumptions would be wrong. :dead:
 

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the afternic story seemed to me to be just a way to dress up the laying off of more staff (as they are now going to outsource it). That essentially leaves afternic as a purely automated system that will generate revenue from the ppc parked page and have sales handled via the third party.

dod you forgot the other model where people buy domains for type ins and convert the traffic to revenue which can be just as lucrative, if not more so, than resale.
 

dotsofdomains

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Sys:

I consider your last model to be "actual use" of a domain name, while I was referring to revenues from buying/selling domain names, but your point is appreciated and well taken.

One footnote, however: it is at issue whether use of a site as pure traffic accumulator with click-through revenue would survive a trademark owner's challenge that such use did not constitute "bona fide use in commerce."
 

Guest
I think that would depend on the nature of the domain at issue, namely whether it was coined/fanciful in which case all traffic is from the goodwill of the tm or whether it is a generic/descriptive in which case it would be bona fide. udrp decisions have been anything but uniform on this issue.

traffic conversion revenue models are a compliment to domain selling and do not have to be mutually exclusive, its just extra income from the same assets.
 

dotsofdomains

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Good points, sys. I'd like to learn more re: traffic conversion revenue models. Any suggestions? Is there a thread discussing this already? Thanks.
 
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