Domain Strategy & Investment: Which Domains Should You Develop?

Domain Strategy & Investment: Which Domains Should You Develop?

We recently reached out to Elliot Silver of www.elliotsblog.comwww.elliotsblog.com regarding his strategy behind which websites to develop and which ones to add to his portfolio. He had some great advice to share.

By Elliot Silver
Internet Entrepreneur and Domain Industry Veteran

When I purchase a domain name in the aftermarket, it’s because I can imagine it as a fully functioning website. I don’t buy brandable domain names that could be used by someone, but I prefer names that are intuitive and don’t require any explanation (for example a dog walker directory on DogWalker.comDogWalker.com. As an individual domain investor, I don’t have the time to build each domain name I buy, as a majority of my business comes from re-selling domain names for revenue.

Developing a domain name can be a time consuming and costly experience, and just about every domain investor I know has contemplated it. Choosing the right domain name(s) to develop is an important process, and I want to share some of the considerations I make before deciding which domain names should be developed and which should be re-sold.

While some might tell you that the most important consideration is your level of interest in a particular topic, I think you really should focus on the monetization options before choosing a domain name to develop. Yes, it’s important to like a particular topic, as that will certainly help you stay interested in your website, but if the monetization options are limited, you may spend a lot of valuable time and effort building something where there won’t be a positive ROI. Sure, you can develop a website without making money, but I personally wouldn’t have the time to dedicate to building a website if I couldn’t monetize it eventually.

Three sources of revenue for my developed domain names include direct advertising sales, Adsense, and affiliate banners/links. I recommend that you look at developed websites that will be your competition and see how those are monetized. Consider whether you will have the ability to monetize in a similar fashion. You will probably want to connect with that website’s advertisers since you already know they are paying for Internet advertising in the field of your interest.

Another consideration that is important is how competitive the field is. High paying verticals may yield more money in the long run, but search engine competition is probably fierce, and it will be an expensive and time consuming task to compete with well funded companies. For instance, if you want to compete in the auto insurance vertical, you should know that Geico, State Farm, All State, and a variety of other high powered websites will all be your competition. Unless you spend a significant amount of money on web development and SEO, you may find it extremely tough to compete. If your site is on page 7 of Google for your competitive keywords, you probably won’t earn much revenue.

Consider your expected time commitment for a particular website. Think about how much time it will take to update the site you choose (content, upgrades, inventory…etc) and determine if you’ll be able to commit that amount of time. By default, some domain name topics may require you to commit more time, and others may be seasonal. For instance, if you are creating a website about new book reviews, you’ll have to continue to update the site in perpetuity, or it will go out of date. Conversely, a website about a breed of dog may not require frequent updates and may be less cumbersome to operate.

Along the same line, you’ll want to determine the size and scope of the website on a particular domain name. In the past, I’ve built large websites with significant amounts of unique content, while I’ve also built sites that contain just a few pages. You’ll want to consider the size and scope of the project before setting out to develop, as some domain names should be more comprehensive than others.

The current traffic levels isn’t a very critical consideration, but knowing that can be helpful in making a decision. If you have a great domain name that receives target type in traffic, or it has traffic from targeted inbound links (perhaps it had been developed previously), this can be helpful to know. Valuable incoming links can help with SEO, and the traffic can be helpful for testing as you develop. IMO, building a website that already receives traffic puts you one step ahead, and it shows that there is “life” in that domain name.

As I touched on in the beginning, a very important consideration is your interest in the topic. The more interested and knowledgeable you are, the better off your site will be in the long run. If you come across as an industry expert, people will cite your website, which will help increase your traffic, reach, and authority. Companies want to advertise on the leading expert websites, and being perceived as an expert will help drive revenue. Additionally, as the website grows, your interest is less likely to wane, and you’ll continue to want to innovate and improve it.

There are many personal and financial considerations to make before devoting time and money to building a website on a particular domain name. It is important to think about all of this before you dedicate your time and effort to a particular project. These are some of the considerations I personally make when considering development.

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US government submission to the ICANN Board-GAC meeting on new gTLDs

Below is the full text of what is believed to be the final submission from the US government to ICANN’s Governmental Advisory Committee (GAC) for a special ICANN Board-GAC meeting to be held in Brussels on 28 February-1 March. The US government plays a dominant role in the GAC and until recently was directly overseer of ICANN.

The text is likely to be controversial in several areas:

  • It suggests that any GAC member have an effective veto of any gTLD application
  • It rejects the use of expert third-parties in making decisions over applications
  • It suggests additional criteria for applicants of “community” TLDs
  • It rejects a Board resolution lifting restrictions on cross-ownership
  • It calls for more work to be done on the economic benefits of new gTLDs
  • It asks for a series of additional protections against trademark abuse


USG Submission to the GAC Scorecard re New gTLDs

1. Objections Procedures

Currently, the Proposed Final Applicant Guidebook contains a “Limited Public Interest Objection” meant to provide dispute resolution for proposed strings that could be considered contrary to general principles of international law for morality and public order. The GAC proposes that:

  1. the “Limited Public Interest Objection” procedure be deleted;
  2. the “Initial Evaluation” procedures be augmented to include a GAC review; and
  3. the current “Community-Based” objection procedures be clarified to include those strings that purport to represent or that embody a particular group of people or interests based on historical components of identity as well as particular subject to national regulation.

Specific details and explanations for each step are below.

Limited Public Interest Objection: The GAC advises the ICANN Board to instruct ICANN staff to delete the procedures related to “Limited Public Interest Objections” in Module 3.

Explanation: Although the new heading has been renamed from “Morality and Public Order Objections”, the body of the text remains unchanged and contains the same fundamental flaws which can only be remedied through deletion.

Specifically, the requirement that governments pay fees and must be bound by determinations by the International Centre for Expertise of the International Chamber of Commerce, which will in turn be guided by the findings of “three experts recognized as eminent jurists of international reputation”, is contrary to the sovereign right of governments to interpret and apply principles of international law on a country-by-country basis. Governments cannot be bound by the determinations of private individuals or organizations on matters that pertain to national law.

The requirement is also inconsistent with the provisions in ICANN’s Bylaws that call for governments to provide public policy advice to the ICANN Board through the Governmental Advisory Committee.

Lastly, there are no “generally accepted legal norms relating to morality and public order that are recognized under international principles of law” (Module 3, Article 2, e, iii), nor is it feasible to expect that any panel of “experts” could reach a determination whether a particular proposed new gTLD string would be considered objectionable on such grounds.

String Evaluation: The GAC advises the ICANN Board to instruct ICANN staff to amend the following procedures related to the Initial Evaluation called for in Module 2 to include review by governments, via the GAC. Any GAC member may raise an objection to a proposed string for any reason. If it is the consensus position of the GAC not to oppose objection raised by a GAC member or members, ICANN shall reject the application. (Note that the application fees should be refunded to the applicant).

Explanation: This proposal meets a number of compelling goals. First it will diminish the potential for blocking of top level domain strings considered objectionable by governments, which harms the architecture of the DNS and undermines the goal of universal resolvability. Second, affording governments the opportunity, through the GAC, to advise the ICANN Board that there is consensus GAC advice regarding particular proposed strings that should not be processed is supportive of ICANN’s commitment to ensure that its decision are in the global public interest.

Categories of Community-based Strings: The GAC advises the ICANN Board to instruct ICANN staff to amend the provisions and procedures contained in Modules 1 and 3 to clarify the following:

  1. “Community-based strings” include those that purport to represent or that embody a particular group of people or interests based on historical components of identity (such as nationality, race or ethnicity, religion or religious affiliation, culture or particular social group, and/or a language or linguistic group). In addition, those strings that refer to particular sectors, in particular those subject to national regulation (such as .bank, .pharmacy) are also “community-based” strings.
  2. Applicants seeking such strings should be required to affirmatively identify them as “community-based strings” and must demonstrate their affiliation with the affected community, the specific purpose of the proposed TLD, and evidence of support or non-objection from the relevant authority/ies that the applicant is the appropriate or agreed entity for purposes of managing the TLD.
  3. In the event the proposed string is either too broad to effectively identify a single entity as the relevant authority or appropriate manager, or is sufficiently contentious that an appropriate manager cannot be identified and/or agreed, the application should be rejected.
  4. Individual governments that choose to file objections to any proposed “community-based” string should not be required to pay fees.

Explanation: The proposed approach would remedy the failure in the draft Applicant Guidebook to incorporate the GAC’s previous advice that ICANN’s new gTLD process should respect the legitimate interests of governments regarding terms with national, cultural, geographic and religious significance. It also anticipates the strong possibility that there will be proposed new gTLD strings for which an appropriate manager cannot be identified and/or agreed, which should cause the application to be rejected. It also recognizes the right of governments to protect their perceived national interests through the Community objections process without the obligation to pay fees.

2. Market and Economic Impacts

The GAC advises the ICANN Board to instruct ICANN staff to amend the final Draft Applicant Guidebook to incorporate the following:

  1. Criteria to facilitate the weighing of the potential costs and benefits to the public in the evaluation and award of new gTLDs.
  2. A requirement that new gTLD applicants provide information on the expected benefits of the proposed gTLD, as well as information and proposed operating terms to eliminate or minimize costs to registrants and consumers.
  3. Due diligence or other operating restrictions to ensure that Community-based gTLDs will in fact serve their targeted communities and will not broaden their operations in a manner that makes it more likely for the registries to impose costs on existing domain owners in other TLDs.

Explanation: The economic studies conducted by Katz, Rosston and Sullivan contain important findings that the past introduction of new gTLDs provided minimal public benefits in terms of competition for existing gTLDs and relieving name scarcity. The studies further state clearly that the introduction of new gTLDs had imposed costs on intellectual property owners in diluted brand strength, defensive registrations, and other costs associated with protecting their brands.

3. Vertical Integration (Registry-Registrar Separation)

The GAC advises the ICANN Board to instruct ICANN staff to amend the proposed new registry agreement to restrict cross-ownership between registries and registries, except in those cases where ICANN has determined that the registry does not have, or is unlikely to obtain, market power. The GAC further advises the ICANN Board that it considers the absence of a thorough and reasoned explanation of its decision, the rationale thereof and the sources of data and information on which the Board relied with respect to vertical integration to be inconsistent with its commitments under the Affirmation of Commitments.

Explanation: The CRA International report commissioned by ICANN noted that vertical integration between registries and registrars could foster both precompetitive and anticompetitive outcomes. As the key issue is whether a gTLD has market power, it would only be appropriate for ICANN to relax or lift restrictions on vertical integration in cases where ICANN determines that a gTLD faces or will face substantial competition.

Further, ICANN has committed to provide a thorough and reasoned explanation of ICANN decisions, the rationale thereof and the sources of data and information on which ICANN relies. This has not been done yet to explain how the Board moved from a position in March 2010, as articulated in a Board resolution, of no cross ownership, to the May 31, 2010 staff proposal contained in draft Applicant Guidebook, version 4 of de minimus (i.e., no more than 2%) cross ownership, to the November 5, 2010 decision allowing full cross ownership.

4. Intellectual Property Protection

The GAC advises the ICANN Board to instruct ICANN staff to amend the provisions related to intellectual property protection as follows:

Trademark Clearinghouse:

  1. Delete the definition of “substantive evaluation” to make it clear that any trademark registration, regardless of whether examined on substantive or relative grounds, can qualify for participation in the pre-launch sunrise mechanisms.
  2. Expand the Trademark Clearinghouse to cover “trademark + keyword” or typographical variations specified by the rights holder.
  3. Ensure that the Trademark Clearinghouse protection mechanism continues after initial launch.

Uniform Rapid Suspension (URS):

  1. Shorten the time for filing an appeal in default cases from the current 2 year review period to a considerably shorter time.
  2. Add a “loser pays” model applicable to domain name registrants.
  3. Include the ability to transfer a domain name, so that the complainant is not forced to pursue a further UDRP proceeding to secure the transfer.

Post-delegation Dispute Resolution Procedure (PDDRP): Amend the standard of proof from “clear and convincing evidence” to a “preponderance of evidence”.

Explanation: These amendments would ensure that all trademark registrations could qualify for participation in the pre-launch sunrise mechanism, and would be consistent with existing best practices (see e.g. the policies for .eu, .tel, and .asia). They will also ensure that the URS provides an effective remedy, and that the PDDRP is consistent with requirements in a civil action for contributory trademark infringement action or unfair competition. Finally, these amendments are necessary to ameliorate the high costs for brand owners, as outlined in the economic analyses by Katz, Rosston and Sullivan.

5. LEA Recommendations

The GAC advises the ICANN Board to instruct ICANN staff to amend the final Draft Applicant Guidebook as follows:

Module 1:

  1. Include other criminal convictions as criteria for disqualification, such as Internet-related crimes (felony or misdemeanor) or drugs.
  2. Assign higher weight to applicants offering the highest levels of security to minimize the potential for malicious activity, particularly for those strings that present a higher risk of serving as venues for criminal, fraudulent or illegal conduct (e.g. such as those related to children, health-care, financial services, etc.)

Module 2:

  1. Add domestic screening services, local to the applicant, to the international screening services.
  2. Add criminal background checks to the Initial Evaluation.
  3. Amend the statement that the results of due diligence efforts will not be posted to a positive commitment to make such results publicly available
  4. Maintain requirements that WHOIS data be accurate and publicly available.

Explanation: These amendments will improve the prospects for mitigating malicious conduct and ensuring that criminal elements are hindered from using the DNS for criminal and illegal activities. The GAC also strongly encourages, and will contribute LEA expertise to this activity, further work on the high level security zone requirements.

[ends]

After Losing UDRP, New York Times Buys DealBook.com from Frank Schilling

After Losing UDRP, New York Times Buys DealBook.com from Frank Schilling

Media behemoth buys Dealbook.com domain name after losing arbitration for the domain.

In November I wrote about how Frank Schilling defeated New York Times Company in a landmark UDRP ruling for the domain name Dealbook.com.

After losing the decision it appears New York Times ponied up and bought the domain name. The domain name has not yet been forwarded to the publication’s Dealbook site.

Schilling’s Name Administration owned the domain name through early January. It was transferred to New York Times Digital on or before January 20 according to whois records at DomainTools.

This is a good domain name for New York Times to own. But I bet they ended up paying more for the domain name that they otherwise would have because they started by taking the low road.

(hat tip: Ramiro Canales)


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