Buying and Selling Traffic Portfolios – Part 2

Buying and Selling Traffic Portfolios – Part 2

This is the second part in a series on buying traffic domain names.

Once you’re comfortable that the legal side of the portfolio has been addressed then you really need to dive into the traffic numbers and do some research into where the traffic comes from.

So let’s get back to basics. You’re about to purchase a traffic portfolio. The first question that you should ask is, “Where does traffic come from?”

Traffic typically comes from the following sources:

1.    Direct type-in

Generic or short domain (eg. Beds.com, gx.com.au)

2.    Typos

Typo of a generic domain (eg. Fruit spelt fruit)

Typo of a weak trademark domain (eg. Joespizashop.com instead of Joespizzashop.com)

Typo of a brand (eg. Verison instead of Verizon)

3.    Link based traffic

4.    Purchased

5.    Hijacked traffic such as tool-bars and NXD traffic.

In the above list of places where traffic comes from I’m making no attempt to try and pontificate on whether they are appropriate traffic sources. I’m only indicating that they are sources of traffic. So please do not get upset at the mention of typo, trademark, purchased traffic etc.

Many years ago I purchased my second domain name and it failed miserably to provide any sort of return. Each and every year I faithfully registered the domain to remind myself to ALWAYS ask the question, “Where does the traffic come from?” In my case, the domain had a lot of Russian bot traffic that didn’t monetise at all. There’s nothing like a $10 annual learning course to remind you of an important lesson.

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ICANN Los Angeles Wrap Up

ICANN Los Angeles Wrap Up

At long last I’ve finally returned from attending ICANN Los Angeles. So was the jetlag, long hours and sitting in a flying tin can for a day and half worth it?

I found that the main attraction for me was that there were a lot of domain owners at ICANN that were looking for a solution that ParkLogic provides. This was great news and we ended up doing a lot of business.

I spent the majority of my time either in meetings or hanging out in the lobby waiting for my next meeting. I think that we had about 30 scheduled meetings and many more that were impromptu while passing someone.

As always, I enjoyed catching up with the many, many friends that I’ve made over the years as well as making a bunch of new ones. Both Joe (from ParkLogic) and I have been working with many of the people that we met for years and putting a face to a skype voice was fantastic!

A real highlight for me was when a group of us hung around a fire pit at the Intercontinental hotel until about 2:30am. It was a chance to really get to know the .green team and hear about their passion for the extension. Dirk from .club was also there and it was great to hear his story and journey over the last few years. We sometimes forget that with all of these new gTLDs that there are real people with real lives behind them that have often put everything on the line to see the extension come alive.

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Flying Across the Pond.....Again

Flying Across the Pond.....Again

Once again I find myself sitting in the Melbourne airport Qantas club. After a restless night’s sleep that was punctuated by dreams of perpetually trying to catch my flight, I finally groaned awake at about 5:54am.

When I say “groan” I really do mean the word in all its splendid definitions. I really did groan. Some people that are religiously minded say each morning, “Good morning Lord!” When my eyelids finally dragged themselves open I was more of a “Good Lord, its morning.”

So after packing the last of my things I then checked that I hadn’t unpacked anything by mistake. I’m always amazed at the number of times that I find my toothbrush wrested right next to my wife’s when it should be tucked away in my bag. Do you do this sort of thing as well?

In the end I find that I just give up and stop checking everything other than my credit card, passport and phone. If I have those then I’m all set.

Roselyn (my wife) drove me the forty minutes to the airport and for this I’m eternally grateful. Nothing against cabs but when you jump in one and ask the driver to take you to the airport and they respond with “Where’s that?” you know you’ve got a problem. Thankfully, Roselyn has done this journey many times and it wasn’t long before we’d said our good-byes and I find myself in the Qantas club.

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What was the ICA thinking?

What was the ICA thinking?

The Internet Commerce Association (ICA) has just altered its membership structure and the way that board members can be elected. I must admit that I applaud the efforts of the incumbent board in trying to juggle the various stakeholders but let’s try and unpack what they’ve actually changed.

There are four classes of membership:
Platinum - $25K/year and an automatic board seat.
Gold - $10 to 24,999/year
Silver - $5,000 to $9,999/year
Bronze - $1,000 to $4,999/year

What’s interesting is the way in which new board seats are awarded. For every $25,000 in revenue a new board seat is created and the gold silver and bronze class members can nominate a member or non-member to the position. There is an election where Gold members have 5 votes, silver members 3 votes and bronze members 1 vote.

From what I see of this structure is that it rewards those with the cash. If you have money then you can effectively buy a board seat at the platinum level. This works well for a commercial organisation that has profit as the motivation but I do not believe that it is healthy for a non-profit association.

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Buy and Selling Traffic Portfolios - Part 1

Buy and Selling Traffic Portfolios - Part 1

I was reading a forum recently and another domain investor was asking about how to price and how to buy traffic domain portfolios. It was a really interesting question that caused me to think about how I price my own portfolios and what I look for when seeking to buy.

It should be stated right up front that everyone has a different risk/return appetite. Some people love to live on the edge and push the limits while others prefer to have a more sedate, stable investment profile. Whatever your risk/return ratio I’m sure that you will appreciate the following pointers.

Traffic domains are typically sold on multiples of months of revenue. So if a domain was earning $10 per month from being “parked” (ie. advertising revenue) then you may pay 24 months revenue for this domain. This would make the purchase price $240. Note that this equation inherently takes into consideration the registration cost of the domain for the two years.

The number of months that you pay for a traffic domain is greatly influenced by a number of factors that I will go through in this series. How much you are willing to pay will ultimately depend upon your risk profile. As a benchmark a domain traffic portfolio typically sells for 24 months revenue but like I said this can be dramatically influenced by your risk profile.

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