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Here I am once again sitting in the Qantas Club at LAX waiting for Qantas Flight QF94 to head back home to Melbourne. The last five days have been an absolute blur of meetings, presentations and of course, like any good domain conference, a chronic lack of sleep. At the moment I feel like I’m running on adrenalin and even a shower didn’t manage to wake up the flagging grey matter sitting atop my shoulders.

So was it all worth it? You bet it was! I’m so glad that I attended the event and had a chance to catch up with so many friends, make new business contacts and more importantly get energised once again about domains.

With TRAFFIC Las Vegas being the week prior I was worried that DomainFest may have suffered but this definitely wasn’t the case. Speaking of TRAFFIC, by all accounts it didn’t achieve the expected numbers and I heard that it lacked some zap. Some domainers seem to take a perverse joy in this and I would like to remind those people that TRAFFIC really launched the industry as a semi-coordinated whole by creating a meeting place for us all. Personally I wouldn’t rule TRAFFIC out and i’m sure that it will come back stronger than ever.

Let me give an example of how I measure a conference’s success. If the conference goes for three days  I could meet with a maximum of 15 people per day, making it possible to squeeze in a total of 45 meetings. So from my perspective there really isn’t any point in having over 45 people at a conference......in fact, having the 150 at traffic and the 500 or so at DomainFest was a mammoth overkill. The only caveat to this is that the 45 people need to be the right people.

This really means that as long as the right people are in the right place at the right time then a conference gets my thumbs up. Let me assure you this was definitely the case at DomainFest where my biggest problem was there were so many “right” people to meet with that I sometimes felt like a stunned deer caught in a cars headlights. Too many opportunities, too little time, where do I go and who do I meet with?

The vibe of DomainFest was electric. It felt like the domain industry had left behind the depression of 2009 and was being rebirthed with a sense of energy and purpose that I hadn’t seen for quite some time.

The Oversee.Net organisation went like clock work and even when I’d lost my badge (along with 400 hundred others) they seemed to be able to magically replace it. Congratulations to all of those tireless behind the scenes workers that manage to make the upfront guys look good and the attendees feel loved.

Sadly, other than the keynote I didn’t manage to get to any sessions....as I said, there were just too many people to meet with. Other than the 15 minutes that I fell asleep (courtesy of Mr. Jetlag) the keynote was riveting, witty and at times hilarious. Interviewer, Oversee.net CEO, Jeff Kupietzky managed to tease founder of Zappos, Tony Hsieh into revealing quite a number his more intimate moments in growing Zappos as well as his philosophy on customer service starting with a happy staff. All good!

The night at the Getty was a cultural experienced that could only be sharply contrasted by the reports coming back from the Playboy mansion experience the following night. When I reflect upon both evenings they both represent various forms of art. A tastefully painted nude may adorn the wall of the Getty while a similarly clad woman adorned many domainers at the mansion. I must admit it that I found that the dinner and conversation I had later on with a number of domainers who didn’t go to the mansion scintillating compared to that of those that did go to the mansion that seemed to be more titillating. For my part I felt more at home in the Getty and opted out of the flamboyance of the mansion.

I do find it mildly amusing that over the years the domain industry has done its best to distance itself from its roots in the seedier side of the Internet but now finds itself embracing once again its heritage. I just hope that any domain company that plans on an IPO or raising venture money doesn’t find the press all over some of the pictures that are bound to make it onto Facebook.

The auction was a great success in terms of numbers and professionalism. The system worked, buyers bought and sellers sold. When I looked at some of the prices that a number of the domains sold for I was pretty excited as it meant that my own portfolio must be worth billions. Congratulations to those owners that managed to get buyers excited and buy some domains that I personally would have just dropped. At the same time there were also a number of bargains that were snapped up by some very savvy, cashed up purchasers.

So as I write this blog post at 40,000 feet I find myself pausing to reflect on the last few days and ask whether its been worth it. I can only say that if you weren’t there then I think you’ve missed the opportunity of the year....but all is not lost, there’s the Domain Mardi Gras just around the corner, followed by TRAFFIC which is followed by Domain Roundtable which is followed by.......

Just over a week ago I decided to head across the Pacific and attend DomainFest. The first problem I discovered was my passport was about to expire so after a mad dash to fill in the paper work, pay the “rush” fee it turned up in the mail a couple of days later. What’s even more amazing is that it was a government department that managed to pull this quick turn-around!

As many of you know I normally attend all the various conference, work my way through the jetlag only to return home and experience it all over again. The reason why I was debating about attending DomainFest is that after about 12 months work ParkLogic has just finalised its enterprise platform domain management solution. As you can imagine, with this just launched it was pretty hectic back home in Australia but I managed to get away all the same!

For those of you who go to our website you will see nothing.....sorry to disappoint you....ParkLogic has always been very low key. If you meet our domainer criteria of making over $10K per month from traffic revenue then I’d very happy to demonstrate the system to you. You can either contact me via my blog or pull me aside at DomainFest. We have found that the primary method of removing fraud is to make sure that we personally know the domain owner and their needs. The result is clean traffic, a lot less hassle and working with people that we enjoy doing business with.

Now that I’ve completed the 15 hour flight to LA I’m really excited about DomainFest. As well as lots of meetings, some quite interesting sessions and a whole lot of fun what I’m really looking forward to is catching up with a lot of high quality people that I have the privilege of calling friends.

Across the next few days I look forward to saying “hi” to as many of you as possible. So whereever you are let's grab a drink, a bite to eat or sit down for a chat.

A lot has been written about domains and how you can buy, sell, develop them or even treat them as stock items. I plan on taking a different approach and dealing with domains as an unique asset class that is investable by the professional investment community just like any other class of asset such as stocks, land etc.

If domains can be legitimised as an asset class then it's much more likely that external funds will begin to flow into the industry. This potentially means that rather than receiving 2 year multiples we start getting 10-15 years for our assets. Presently, other than opportunistic sales I don't see any individuals or organisations that are beginning to work on this problem and move more out of the revenue to the capital value game.

For domains to become legitimate assets for professional investors a number of things need to happen. The first has to do with transparency, the second risk and the third liquidity. Over the next few articles I plan on disassembling these concepts and comment on my own personal journey in defining domains as professionally investible assets.

Transparency
Over the years I've written a lot about transparency and I've come to the conclusion that transactional transparency that relates to why domainers earn what they earn from PPC is not really valued by any of the stakeholders other than the domainer themselves. This means that unless the incumbent stakeholders in the PPC value chain are forced by market forces to become transparent they won't. So rather than complaining, ranting and raving I decided to do something about it with our domain management and optimisation company ParkLogic and work towards a more transparent future.

The first step towards transparency is data normalisation so that each domain monetisation solution can be compared against each other. At the moment we have a situation where the classic measurement of RPM is useless for making a comparison because each parking company counts their traffic differently.

For example, if a parking company aggressively filters their reported traffic then they will be artificially increasing the RPM by lowering the number of users reported for potentially earning the same revenue.
Likewise the measurement of revenue per day fails to deliver a consistent comparison as traffic often varies in monetisability over time. For example, if I point traffic at parking company A for two weeks and then parking company B for two weeks you can't compare the daily rates because they are at different points in time.

The solution is to send all of the traffic to all of the parking companies in as real time as possible. This is often known as a round robin system, traffic splitting or A/B testing. In A/B testing all of the traffic (completely unfiltered) needs to be sent to either solution to get a statistically significant result to determine a normalised RPM. There are a number of challenges with A/B testing the largely revolve around revenue leakage.

For example, if I test Parking Co A and it generates an RPM of 50 and then test Parking Co B and it has an RPM of 100 then for every piece of traffic I'm sending A I'm losing 50 RPM.
Let's take a look at the maths. for 2000 pieces of traffic (assuming they are all monetisable) Park Co A generates $50 and Park Co B $100. It also means that the domain owner could have potentially earned $200 rather than the $150 due to sampling Park Co A. To be successful this revenue leakage must be less than the additional revenue the domain has earned due to the revenue increase of Park Co B.

The name of the game then is to minimise the traffic that is sent to non-performing solutions while still maintaining a statistically sound sample of who is paying the most. For higher traffic domains sampling can be conducted more frequently compared to low traffic domains. The sweet spot is to accurately determine what is meant by high and low traffic. We have spent the last several years refining this logic at ParkLogic and let me assure you that this is only stage one of the data normalisation and traffic optimisation process.

Once you have these metrics right (and we think that we're pretty close) then the direct comparisons that can be made across the wide variety of monetisation solutions become increasingly transparent.

There is a whole level of sophistication around normalisation that I haven't alluded to but I believe that the fundamentals will encourage you to either contact me or investigate the matter further. A whole other side of traffic normalisation and revenue leakage minimise is true traffic optimisation but that is separate from normalising the data to gain a foothold in the transparent world.

It's important to note that there are also a number of different definitions of transparency that have been bandied around that actually just confuse the issue. Transparency is not trying to tie a parking company up like a pretzle and demand that they provide audit rights to their data. Ultimately transparency needs to relate back to the monetisation source (eg. Google/Yahoo/Direct) not the parking company which is just an intermediary.

Remember that transparency is one of the necessary components to playing the domain capital value game and providing a true exit for domain owners that have been patiently holding onto their portfolios of domains year in year out. The reason why it needs to go back to the source is that is what a professional investor will be assessing their risk against. This will be the subject of a future article.

Providing visibility into ultimate revenue source, consistency of earnings all help investors make decisions on what they will pay for an income producing asset. This is the ultimate game for a domainer where investors pay 15 times earnings because of the transparency in the metrics versus the current much lower multiples.

It's summer holidays here in Australia and I naturally found my kids (aged 16, 14 and 11) glued to the television, WII or playing computer games. Don't get me wrong, I love playing games or watching a good movie but day after day was getting a bit much......it was then that I had an idea.

It struck me that school is a great basis for education but it really doesn't teach kids how to do something that is actually really important in life.....how to make money. This is not surprising as any teachers that really know how to do this won't be teaching that long. They'll be making a quick career change into whatever allows them to earn a dollar and enjoy life further.

So I sat down with my two eldest, Tim and Sarah, explained to them that I was going to teach them how to make money and asked if they were interested in learning. Being the young consumers that they were they answered "yes!".

I went through a number of principles of how to make money such as.
1.    How to earn money and not actually have to work (passive income).
2.    Get your expenses under control.
3.    Being disciplined and focused.

Since I'm involved in the Internet industry I set them a project to develop a website each that will allow them to earn a money. For the past week or so we've spent half an hour talking about their progress and reviewing some homework that was set (eg. normally read a few pages of a book about successful Internet people). They've loved it and tackled the task with a lot of enthusiasm.

The stage were up to is they are:
1.    Working on the content for their site and working out a few technical issues (with Dad's help).
2.    Working on a marketing plan.
3.    Getting the finances in order with a simple cashflow.

All these items are great learning experiences that you really don't get an opportunity to learn at school and then apply to a real situation. Since they need to "own" the project any expenses (including purchasing a domain) come out of their own pocket, not mine. This encouraged them to really think a lot more about the investment side of the equation. It's not a full time task and they still play games and watch TV....which is good but it has definitely distracted them from these pursuits.

Once their sites are up and going I'll let you know the domains as I'm sure that that'd love any input.

Just before Christmas I'd received the following comment from a reader when I suggested that during the Christmas break we should contemplate what we are doing with our businesses and lives:

After reading this I must admit the term "Merry Christmas" drew little cheer from me and the sparks flying in my eyes that had nothing to do with sugar plum fairies. I don't like it when a person is so derogatory towards an industry that I'm proud to be a part so after calming down I thought that I would clarify a number of things that Pitbullstew has raised:

1. I didn't know that the NE coast of the USA was under snow.....I do apologise for that but we just had the equivalent of 100 degrees in Melbourne and with work and the Australian media I wasn't aware of the situation. My belated heartfelt thoughts are with the victims of such a desperate tragedy.

2. I don't own a pool. The picture for "Saturday Musings" is a stock photo not me. Sorry to disappoint some of you....

3. Contemplation isn't a bad thing and can often lead to better lives, communities and ultimately a better world.

4. I've never met more harder working people than domainers. I've said it a number of times, domainers work incredibly hard to maintain their passive incomes.

5. I serve my community and have raised thousands of dollars of relief funding for Australian bush fire victim from incredibly generous domainers from all over the world. I support my local church and children orphaned by AIDS in South Africa. I basically do what I can when I can. I know so many domainers that give both of themselves and their finances and often endure great hardships for the sake of others (including going into harms way to help people in war torn lands). Please don't deride their character as in my opinion they are the salt of the earth and the ones that are often the first to help others.

6. Domainers are not parasites but people with families and loved ones that have a great empathy for the needs of those around them. Sure, like in any crowd there are some bad eggs but when you sit down and speak to one-on-one with a domainer you are often surprised by the many unheralded things that they do for others in need.

I'm not sure if you are aware but my fellow bloggers are often on the receiving end of comments like this one and sometimes they are even a lot worse. It may sound a little insignificant but I'd encourage you to go and send some of these guys a "thanks for the efforts" email or post as they spend countless hours writing each year and often only receive grief for their efforts. Click here for a list of blogs.

So "pitbullstew" I hope that I've clarified a few things and have provided you with some thoughts to consider. I'm proud to be known as a domainer and part of an industry that is as vibrant and giving as this one is. Here's one last thought. Remember that before you point a finger at anyone that there are four pointed back at you.

So what do China and Australia have in common? Yes both their flags have stars in them but Australia has a nice calming blue background representing the oceans around the nation while China has a lucky red colour that seems to resonate with the vibrancy of its cultural heritage. Many geographically challenged people would say that they are both on the same continent but they would be wrong as Australia is a continent in itself.

Which reminds me that when I was in the USA a couple of years ago I mentioned to a person with a thick southern accent that I was from Melbourne, Australia. They responded that they'd driven there once and it was a nice place. I was puzzled by this response not for the positive thoughts on my home city but for the fact that the Pacific ocean was between us and the person I was speaking to. I know that I certainly would like to see their car!

China and Australia don't have the same climate records. After all the "noise" at the recent Copenhagen climate conference we now know that Australia makes more pollution per capita than China....which when you think about it when it comes to per capita China will always win. Which reminds me that like parking companies, governments seem to be using statistics to say whatever they want.

So what is it that Australia and China have in common? A completely insane mentality towards the Internet and free speech. That's right, Australia is going the way of our northerly neighbours (north is normally up on a map for those who failed geography at school) and will be instituting a national firewall in 2010. Welcome to my beautiful country of surf, sun and firewalls!

The Australian government plans on introducing filters that will ban access to websites containing criminal content. The selection of the sites to be banned will be determined by an independent classification body guided by complaints from the public according to Communications Minister Stephen Conroy.

It could be said that the current political opposition party is conducting criminal activity therefore the government will ban their website. While we're at it let's ban a number of artistic websites such as the Louvre's (big Paris art gallery in a continent called Europe) as it shows medieval ladies with their private parts. Why stop there? Now that we have filtering technology let's change what people can read so that they never know the truth. This is sounding a lot like George Orwell's book, 1984 except it's 2010.

Sure, I may be going a little over the top but I've never known a government not to abuse powers that it awards itself. You've only got to look at the anti-terrorism laws around the world to realize that the general population has had a huge reduction in civil liberties. Was it all worth it? Taking off your shoes, belt, jacket, watch etc. at an airport security check point is only a nuisance but what are we going to do when some bright spark invents the underpants bomb or the bra bomb (although some people would say that they already have bazookas)? As an aside, recently a passenger was asked to take off their shoes and found that they were walking across broken glass....they've now brought out the nuclear lawyer bomb.

What's worse than the filtering is the fact that ultimately any filter will slow Internet speeds. The Internet has reduced Australia's geographic isolation from 17 hours in a Boeing to 100 milliseconds. For the first time in Australia's history we haven't been geographically challenged. Adding another 20 milliseconds or so is like parking the USA half-way into the Atlantic ocean (the big blue stuff to the right of New York....oh know...I have to explain where New York is....I give up.)

So the question I have to ask is, "Why???" As a nation, Australia is finally able to reach the ends of the earth really quickly but what does the government do? They've made us the laughing stock of the world and are now about to shove our gross domestic information account through a funnel with a very small end. It's ridiculous!

I wouldn't be surprised if this move is less about filtering and more about it being the first foray into Internet taxation.....after all, if you can count the bits and bytes why not charge for them? If people aren't willing to pay then just filter them off....that's a scary thought isn't it.

So if you're from China you're probably a little confused that a bastion of free speech and democracy is about to do something as stupid as your government. Others may be wondering whether it's really worth worrying about a place that's a nice drive away. For me, I'm thinking that Mauritius or Tuvalu are looking nice, the only problem is that they might not exist for much longer. Let's hope that Copenhagen gives a positive result....could you give me a call on the phone and let me know because our government has decided to block websites talking about it.

Each day brings us closer to Christmas and the end of the silly season of cranking up debt and advertisers trying to secure that last dollar of spend. Businesses are about to have a hiatus between Christmas and the New Year while domainers lament the lack of clicks during the holiday break.

It's during this time that I'm reminded to do something other than stuff my mouth with Christmas pudding, turkey and a leg of lamb (picture Homer Simpson). That thing that has been on my to do list for the past 12 months raises its ugly head during a time when another egg nog would be much nicer.

So what am I talking about? It's thinking. Thinking is often a very under rated activity. I often do my best thinking reclined in my favourite couch with a notepad, pen and something nice to drink. The problem has been that during the last 12 months the manic nature of life caught up with me and the couch gained a layer of dust.

It's during these times of contemplation that I ask those really nasty difficult questions such as; What business am I in? How do we monetize all a domains traffic? What will Santa bring me for Christmas? I have found over the years that much of my "eureka!" moments have evolved from such times of introspection.

For example, some of you may have noticed that I've been a little more quite on the blogging front during these last couple of months. This has largely been due to ParkLogic finalizing a massive development project that we hope and believe will completely transform the way domains are managed for large domain owners. Like all good things this project was the result of my last "eureka" moment and it's taken a lot longer than any of us would have liked to complete.....but complete it nearly is!

So I find that my "bright ideas" pad is nearly empty and my couch is beckoning enticingly for me to exercise the right side of the brain while my hand searches for another glass of something nice to drink. I would encourage you, wherever you may be, stop the rush and start thinking about what you're doing. Some people say that doing the same thing over and over again until you fail is the definition of insanity......let's be what we were born to be and innovate this industry into a prosperous future!

As many of you know I've been developing an aviation website for the pilot community in Australia as a part of both my passion for flying and research project into how to develop a domain with real customers, services etc.

To date, Downwind.com.au is getting about 40% of the pilots in Australia going to it each month.....which is a great outcome! It has a community, forum, marketplace, a host of directories plus an area for pilots to be able to blog about their adventures. All this was built using the content management system called Joomla (joomla.org). I'm a big fan of Joomla as it's unbelievably flexible and it allows me to create a host of features almost instantly and at very little cost. Feel free to let me know if you are interested in knowing the specific software plug-ins that I'm using.

From the popularity of the site I've now been asked to write regular articles for one of the premier Australian flying magazines. This was great news which provided a modest income stream from the site content and a nice way to getting some discount promotion!

It has been a bit of a struggle getting advertisers onboard as despite its hi-tech appearances the aviation industry is still operating with an old-school mindset. This is slowly changing but I anticipate it will take a little longer to get anchor advertisers onboard than I first thought.

This brings me to advertising. I've only spent a few hundred dollars promoting the site and it was really throwing mud at a wall and hoping some of it will stick.....and lucky for me some did. I've now built a tracking system that allows me to track just about everything.....it was a bit of fun learning PHP but was much simpler than I thought it would be.

For instance, we just sent out a newsletter and every link had a tracking code built into it which allowed me to know what the members were really interested in. One of the biggest mistakes I think that I've made is guessing what they want rather than being a little more methodical. Let me assure you that it's absolutely true that links at the top of an email get much more clicks than links at the bottom.

As another effort in trying to generate additional traffic I recently made a decision to try and open up the Downwind databases for the whole aviation community. I built an aviation directory search engine that anyone can add to their site and brand as being their own. The goal is to develop the definitive aviation directory that is used by many more sites than just Downwind and generate more traffic than I could do alone.

What I've found is that working on Downwind is a lot of fun. Real customers, real services combined with a lot of real effort can reap financial rewards but look on them more as long-term rather than the immediate results that often come from parking. In the meantime, I've got some more work to do!