Blog

Viral videos used to be funny or disgusting clips passed from friend to friend via email, often with a threat of bad luck if not passed on to 10 others friends.  It got so bad, some friends forced you to treat them like the spammers they were.   But as much as we complained about the crap, we secretly watched just about everything, hoping for something special and 1 out 20 times we received the amazing car crash, funny blooper or the shock value image that lulled you in, then slammed you in the face with grotesque imagery or ear piercing audio.

Times have changed with the proliferation of blog sites (like the one) and the ease of posting videos and images.   Now you choose what to see and when to see it, helped out by search engine listings, RSS feeds and popular sites with their top lists.   But most of all, the production value increased since mainstream marketers started moving their traditional ad dollars from TV to the Internet.  Savvy marketers create TV quality videos for the Web and market them into the viral jet stream of America.   Political groups have embraced this technique and pushed the medium to levels never seen before.  Their audience is engaged, spirited with a desire to share their thoughts with co-minded friends or change the mind of a “hardheaded” person who doesn’t see the obvious “correct side” of the argument.

As this presidential political season comes to an end, it will be fun to see major marketers fill the vacuum left by the Democrats, Republicans, PACs and other special interest groups.  Will their “constituents” follow their call to buy pizza, beer, green vehicles or protect their identity with the same vigor and passion of tax policy, gay marriage or blue versus red?     Mostly not, but it will be fun waiting for that special message to break through the clutter and drive the next catch phrase like “Where’s the Beef” or “What’s Uuuuup.”

Speaking of Budweiser’s famous commercials, watch the following video’s attempt to use past emotions to connect with current issues.  I don’t know if this short movie was paid for by the Obama campaign or if it was created by someone making a statement, but either way the goals are the same.  Score another point for Viral Internet Marketing.

Changes in the economy and the overall financial system have made people think differently about where they “park” their cash.   Stocks, bonds, mutual funds and even checking accounts are not as safe as we once thought they were.   There are also obvious risks with hiding your cash in the mattress too.   I’m not saying buying domain portfolios is risk free, but if bought with skill and proper analysis, you have an opportunity for a pretty reasonable rate of return with decent asset value protection.

Ad revenue dropped over the last 12 months for parked domains, mainly because Google started monitoring conversion down to the domain level, ending the free lunch for low quality domains and fraudulent traffic.  There are rumors Google might make additional changes, but many experts believe the majority of the changes have already been implemented and domain level revenue has stabilized.   If you own “sub-prime” domains, you feel the same pinch as Countrywide and Bear Stearns, but at least the revenue has stabilized to a flat level.  Hopefully that level is not $0.00.    If you owned quality domains, then your revenue dropped less and should continue to perform.  Just like any investment, there still are other variables to consider, including if:

• Google or Yahoo stops monetizing PPC ads on parked pages or significantly change their approach.
• Google or Yahoo may begin filtering out traffic from long tail domains.
• Traffic slows or people just stop visiting your domains.
• The economy slows further, causing advertising rates to drop more.
• Technology changes, causing people to find sites differently.
• Something totally unforeseen happens.

Too many people look for reasons not invest or take chances, I believe it’s better to look for opportunities in periods of change.   If you just look at the recent revenue drops and uncertainty for the future, then it’s easy to overlook so many other factors that may out way those risks.   Upside factors:

• Revenue has stabilized and prices will be based on new lower numbers.
• Revenue multiples to calculate sales price have dropped.  (from 4 or 5x to 2 or 3x)
• Supply/Demand imbalance. More sellers than buyers.
• You may find “diamonds in the rough” within large portfolios.
• Ability to “cherry pick” the best names from larger portfolios.
• Buy wholesale and sell retail.
• Optimization by moving domains from a lower revshare to a higher one.
• Optimization by finding the best parking company by domain.
• Alternative sources of revenue
• 2x multiple earns a 50% annual rate of return, significantly higher than a CD.

People are scared in this economy and are selling portfolios more than last year.  A portfolio selling for $1,000,000 last year might be available for much less today.    If a portfolio had projected annual earnings of $250,000 last year, it might have sold at 4x, which is $1 million.   Let’s assume these names are higher quality and revenue dropped recently by 20% to a projected annual of $200,000.  That portfolio might now sell at 2x, which is $400,000.  That’s quite a discount and a 50% annual ROI on cash flows.  Sure, PPC rates might drop more, but you counter that by selecting domains with steady traffic and consistent earnings, then optimize and look for small pockets of names to sell at a premium price.   There are many other tricks and tactics possible, but mostly hard work and proactive adjustments will keep you ahead of the pack.

I love to say my office is anywhere I can use my laptop and cell phone.  Trying to find balance between family, work and personal time is not easy in this 24 hour global economy, but with technology and and good time management, you can have your cake and eat it too.     I’m very lucky my work is indeed global, requiring most of my communication via phone, email and IM.   It also helps to have an understanding family and the best boss possible - me.

Some people avoid Blackberrys, iPhones or even regular cell phones in general, fearing that these devices will control their life and never allowing them to escape work.  I think it’s the exact opposite.  When I’m away from my communication devices, I find it hard to relax.  Often, I worry about what I’m missing at the office and this fear used to keep me firmly planted behind my desk.  Carrying an iPhone or a Blackberry allows me to work in spurts while I’m out enjoying time with my family, golfing or even trips to tropical locations.    I’m not saying I can work 100% of the time on the beach or be as effective when away, it’s just a mindset change to enjoy the best of both worlds.  When at home in the office, I’m working full speed ahead and the beach “office” is 95% vacation and 5% work.   This 5% allows me to vacation for longer periods of time and spend more quality time with the ones I love.   Prior to technology, I would get real antsy being away any longer than a 3 day weekend.  Sure, I check my email more than necessary and I probably stay up too late on the laptop.  However, my wife and two little boys know having dad on the laptop by the pool in the desert on a Monday afternoon is better than dad being away in the office.

Cell phones are great, but nothing replaces your laptop for real effectiveness.  Wifi is almost everywhere, but I enhance that by using a broadband wireless card for my laptop when coverage is spotty or if a local establishment charges for access.    I’m writing this poolside using my wireless card, even though the hotel has free WiFi.  Their coverage is just ok, so I use the card instead of searching for the spot by the pool with the best reception.   It might be considered rude, but I often bring my laptop and broadband card to lunch when I’m dining alone.   My friends call my office “The Cave” since it doesn’t have windows, so when cabin fever starts, I’ll go work from a local coffee house, restaurant or even on my boat in the marina.    Most wireless carriers offer these cards for free in exchange for a 2 year commitment at $60 a month.  These prices will come down or be replaced with WiMax or other technologies making Internet access truly ubiquitous.

Bottom Line, life is short, so work hard, play hard and spend quality time with the ones you love.  Even if that means sneaking a peek at your email from time to time.

Tomorrow is a big day for geeks around the world.  People are excited about the G3 iPhone, but in my opinion it’s the App store that is the real revelation.   Don’t get me wrong, the phone is going to be great.   I don’t have mine yet, so maybe it will be spectacular, but it’s the App store that people will write about years from now.    Apple created a marketplace for entrepreneurs to distribute software to the coveted younger generation who no longer watch TV.     Advertisers can’t reach them, but new technology can.

The app store will cause an increase in the adoption  of the iPhone (along with the price reduction), just like how applications on Facebook caused people to move there from MySpace.   Facebook allowed a little chaos and loss of control in return for the masses to choose the best app for their own personal needs.   The smartest people in the world can’t determine what little Johnny wants or what Mark Roah wants for that matter.    Economics is messy.  Supply and demand is efficient and people demand options.  One company can not dream up everything people want, so opening up development to the masses will help fill every niche.

Will adding hundreds of new tld’s be a good thing or just short term profiteering for companies preying on speculators?   I don’t see any long term value added with .atm or .pay or .insurance.   Maybe a case could be made for .nyc or .paris, but really they are just redundant to any .com and will just cause more trademark suffering.   Not only will companies need to allocate more time and resources to defend their trademarks on potentially hundreds of new tld’s, but they also may encounter a customer service nightmare from increased phishing attacks.   Will consumers know the difference from creditreport.bio (or .cpm, .hat, .help, .now, etc.) vs. creditreport.com    There are plenty of Aunt Jennys in the heartland who will fall for a trick like this, even some Mark Roah’s along the coast too.

The case against someone buying and using Microsoft.newtld, Verizon.newtld or Dell.newtld is pretty obvious, but how will cars.com react when someone uses cars.newtld or hotels.com with hotels.newtld?    I smell trouble brewing…

The expansion of new tld’s will increase confusion and drive people back to what they know best, .com.   After all the fuss with .mobi, have you been to a .mobi site?   Did you know .pro, .travel, .museum and .job tld’s exist?  I didn’t and I work in the domain industry.

The 2008 US Open playoff was one of the most exciting finishes in golf history.   But the geek in me was just as blown away by the live broadcast of the video feed at USopen.com.    Most people were “working” during the 18 hole playoff and had to watch from their offices and luckily the US Open provided an amazing product on the course and on the Web.

The broadcast quality was perfect and only a couple times did the feed skip or freeze.  I don’t know the numbers, but I’m sure over a million people watched the Webcast and in the past an event like this would have knocked out even the most robust servers.   Congrats to Tiger, Rocco and to the US Open.

It took longer than I had hoped, but my personal site is now live.  I can’t promise how often I will write blog posts, but hopefully you will find them to be interesting.