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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Personal Musings - My SciFi Novel Sample

Personal Musings - My SciFi Novel Sample

As many of you know I've been writing my very first science fiction novel. Writing the book as been one of the most enjoyable, rewarding and stretching things that I've ever done in my life. Over the years I've written a lot on my blog, technical manuals and for a number of different magazines but nothing prepared me for my first book.

It's been quite a journey for me and the characters in the story over the past 18 months. At times, I've found myself typing furiously on my laptop just to find out what was going to happen next. It almost seemed like the story was unfolding before my eyes but I couldn't see the next part until the words were on the page.

The first draft was finished about twelve months ago and then I began the many rewrites. My father is a great science fiction buff and he spent a lot of time reading the book and a lot of his suggestions are embedded in the pages. My wife has read the first hundred pages and added her unique insights in how the story could be improved. So knows nothing about science fiction so it was great getting her thoughts.

When our son Timothy was home recently I shoved a few pages under his nose to read. His comments and suggestions were all about the characters and how they could grow and gain greater depth. That added another 3 months of rewriting....sigh.

So after all the work I'm now relatively happy with the setting, plot and characters. I plan on doing a final clean-up of a few minor issues in my last rewrite before finally publishing.

Below is the prelude and the first chapter in the story. I hope that you enjoy reading them as much as I did writing them. Please feel free to leave comments (good and bad).

Cheers!

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Prelude

With a surge of mental energy Wisdom energized the form of an elderly English gentlemen. Gold rimmed round spectacles and a greying goatee adorned his face. A brown tweed jacket and pants were complimented by a matching soft hat that was reminiscent of mid twentieth century Earth. A planet that was light years away from where he now stood. For some reason he had grown quite accustomed to this shape and drew a sense of comfort from resting his hand lightly on the walking cane at his side.

Wisdom looked around the dark alleyway created by the surrounding soaring skyscrapers. Around him abandoned old wooden pallets, cardboard boxes and several small clear plastic containers littered the area. The refuse of a burgeoning civilization. High above he could make out a small blue patch of sky where every now and then a flitter-car would scoot into view and just as quickly vanish from sight.

Chuckling to himself as if at a jest only he could hear, Wisdom walked to the end of the alley and stepped out into a huge open square at the centre of a bustling city. He loved this place and remembered when the builders had first paved the area in the blue stone tiles that seemed to mirror the cloudless sky above. The square was so large that even with the number of workers employed it had taken them years to complete the task. Like a fence around a yard the open area was surrounded by buildings similar in size and magnitude to the ones that created the tiny alleyway that he’d just stepped from. Everything appeared to be on a vast scale in the capital.

Wisdom let his gaze wander across the square to the eight large water fountains positioned equidistant from each other along the circumference of a giant circle. Each fountain represented one of Kaladon’s eight continents with a single larger fountain in the middle symbolising unity. The sounds of the spraying, trickling and gurgling water provided a soft undercurrent of tranquility as it gently echoed off the surrounding buildings.

Kaladon IV, was the fourth planet out from the binary star system and teemed with over twelve billion inhabitants. It was also the home world of the fledgling human Concord of planets and the birthplace of a society that had only recently developed interstellar travel.

Across from Wisdom a teacher led a procession of primary aged school children, holding hands, to one of the fountains. Families collected in groups, the adults enjoying each other’s company while their children ran around like satellites orbiting a planet. Despite being in the centre of a city of some forty million people it was beautiful and peaceful.

As Wisdom wrested his hands lightly on his cane he stopped for a minute to enjoy the warmth from the twin distant suns on his face. As he gazed upwards the sunlight highlighted his unusually bright blue eyes. All his ancient race had similar coloured eyes and his seemed to sparkle with eagerness behind his spectacles. It had been quite some time since the three of them had met in this fashion and only now because the plan was nearing a critical juncture.

The people going about their business subconsciously made way for him as he strolled across the blue stone pavers towards the bench directly opposite him. There was a calmness and surety about him as he settled on the seat between a young man and a middle aged woman.

The young man had the look of a university student from the college on the far side of the square. His ruffled unkempt hair mirrored his rumpled pants and t-shirt that was emblazoned with the university’s motto of, “Think, Plan, Act.” The final word was disrupted by a smudge deposited from his last meal. To their loss, many had made the mistake of judging him by his disheveled appearance. In one hand he held a reading tablet as he digested the latest scientific news from the inhabitants of this world.

In sharp contrast to the young man the woman was stunning and would be a head turner at any party. Her long blond hair cascaded down her back while her white blouse revealed just a little of what was discretely hidden underneath. Her fingers thrummed rhythmically on the outside of a black violin case that rested on her black neatly pressed pants. Sitting on the ground beside her was a dark leather briefcase with a collapsed silver music stand sticking out the end.

Unnecessarily clearing his throat Wisdom asked, “So Intellect, what do you think of Kaladon?”

The young man’s bright blue eyes looked up from his tablet and paused briefly as if to ponder the question for a moment. “I’ve been scanning the latest scientific research papers and it appears that all is in order. No one has detected our influence over the last several thousand years.”

Wisdom smiled and turned towards Intellect beside him. “I didn’t ask for the results of the plan. I asked what you thought of this world and its people.”

“It’s wonderful.”

Wisdom raised his eyebrows to encourage his colleague to continue. Intellect sighed and reluctantly put his reading tablet down. “The humans here have passed through so many obstacles; war, famine, environmental problems and economic disparity to name but a few. With a little help from us they’ve now started colonizing the stars in this sector.”

Wisdom nodded. “And you Creativity?”

Creativity shifted on the bench so that she could get a better view of her two strange companions. Each of them indulged in energizing a form they felt the most comfortable within but she always wondered why Intellect liked to wear unclean garments. Her intensely blue eyes sparkled in remembrance as she replied in a voice that was like a perfect, pure instrument. “I played with the Kaladon orchestra and Balnarth’s music brought me close to tears. The highs and the lows pulled at my heart. Wisdom, the way he managed to bring the audience with him on the journey was close to remarkable. The arts, education and health are everything that we could have dreamed.”

Wisdom again sighed deeply, “That is good. Although young, the Concord of planets is strong. I’m sure that it will survive.”

Creativity lovingly opened her violin case and smiled as she again remembered her last performance. Concern entered her voice as she said, “Wisdom, at your request I’ve ensured that the discovery of nano-technology has taken place. That will surely help them.”

Intellect picked up his reading tablet but paused just before he started to devour the next scientific article.  “For all their technological advances they need the others. It’s the genes combined with the technology that will give the galaxy a chance.”

Removing his hat to reveal thin grey hair Wisdom mopped his brow with a handkerchief that he’d pulled from his inside jacket pocket. “The meeting will happen soon but not here. It won’t be long before the Concord and the people of Earth will come face to face.”

“And what of Kaladon IV?” Intellect asked.

Wisdom shook his head from side to side as if struggling with what he was about to say. “We can do nothing for them without disrupting both streams. For the sake of their development and the galaxy the Concord and the people of Earth must not know of our influence yet. They will become psychologically dependent upon us and that will mean the end.”

Creativity looked across at the families admiring the fountains dotted around square. The sounds of children screaming in delight as water suddenly sprayed from the sides of a pyramid shaped sculpture cut across the general hubbub.  “So this will all be gone?”

Wisdom perched his hat back on his head and replied in a somber voice, “Yes.”

Blue eyes turned to look into blue eyes and a tear trickled down Creativity’s milk white cheek, “Is there anything that we can do?”

The concern of eons suddenly etched across Wisdom’s face, “No, they are doomed.”

Part I
Friendship

Chapter 1 - The Past

“Get back in here and finish those dishes young man!”

“Oh Mum. Can’t I skip them just this once? I really want to build the lean-to with Dad in the woods.”

Ray’s mother quickly wiped her hands on her apron and glanced out the window to gauge how long it would be until the first sun set and the second rose above the horizon.

“Please Mum?” Ray whined.

“Oh get going you scoundrel!”

“Yeah!”

Without looking back in case she changed her mind the blond haired, blue eyed ten year old rushed out through the fly wire door and slammed it behind him. The red barn was on the other side of the old flitter car sitting at rest in the driveway and it didn’t take Ray that long to reach the huge double front doors. As he pulled the left one open he could hear his father rummaging around for what they’d need for building the lean-to together in the woods.

“So your mother let you off the dishes.”

Ray pulled the door of the barn closed behind him just like he’d been taught to do since he was little. “Yes sir.”

A broad grin crossed his father’s face. “You’d better do something special for her tomorrow. Come here son.”

Ray ran up to his father and was immediately lifted off the ground in a bear hug. “Oh, my you’re getting big and heavy.”

Ray hugged his father back even harder to show off his muscles. He loved being told that he was growing up. One day he was going to be as strong as his dad and wear overalls and a checked shirt just like him. They both ended up laughing as Ray’s father gave his son a little tickle under the ribs before putting him back down.

“OK, I’ve got the saw and the nails. What else do we need?” Ray’s father said half to himself.

“A hammer! We need a hammer Dad!”

“That’s right, we need a hammer.”

Ray laughed at his dad for forgetting the most critical tool. After packing their things into a bag Ray’s father grabbed his rifle and they both headed out of the barn and down fence line that separated the wheat from the woods.

Behind them Ray’s mother smiled to herself as she placed another dish in the rack. Flipping a strand of hair out of her eyes she looked lovingly out at the two most important men in her life walking side by side away from the house.

After reaching the edge of the forest a few hundred meters from the house Ray’s father asked, “So have you picked a place?”

Ray screwed up his face in concentration. “I think just through there looks good.”

His father replied seriously, “I think that’s a good choice as well. The trees are bent at just the right point to help us with the construction.”

Ray clambered through the white fence cross-bars while his father climbed over the top. They could still see the house not far away through the trees and for the next few minutes they cleared the area around the base of the selected tree. Ray’s father bent down to check that the tree didn’t have any spines like many of the species in the woods.

Just after he’d married Ray’s mother they made the decision to be one of the first farming colonist of this world. The vast wheat fields helped feed the Concord’s core worlds and it wasn’t long before their little farm began to prosper. Soon after arriving Ray was born and the planet felt more like home every day.

“Dad, what’s that noise?”

“What noise son?”

Just as he asked the question Ray’s father turned his attention to the sky as the screeching wail of something falling reached him. Through the trees he watched it slam into the ground next to their flitter car, sending a cloud of dirt into the air.

At the top of the pyramid shaped object an energy orb begun to pulse faster and faster.

His father’s voice was strained as he said, “Son stay by my side and don’t leave it. Do you understand?”

Ray knew that his dad was using his very serious voice and only replied, “Yes sir.”

Skirting along the edge of the woods they both ran back towards the house. With his rifle in his right hand and his son’s hand in his left all thought of the lean-to was forgotten.

Ray’s mother stepped out onto the porch to see what all the commotion was about. She’d heard the awful whining sound and the thump as the object fell from the sky. A shimmering purple haze formed at five distinct points around the machine.

Within the haze, sparks flashed like small lightning back and forth until the vague shape of men in some sort of strange armour could be seen forming.

She recognized those shapes and dropped her tea towel as she fled along the porch in the direction where her husband and son had gone.

As he ran to keep up with his father Ray watched as his mother jumped down to the ground and ran towards the fence line.

A brilliant beam of red light lanced out and seemed to pin her in the air mid-step. Her face contorted in agony as she collapsed to the ground dead. Ray watched as his father screamed in a way he’d never seen before. He’d seen his dad angry with him or yelling at a contractor but he’d never seen his father like this.

With tears pouring down his face Ray’s father dropped to one knee and lifted his rifle scope up to his eye. Ray heard the brief build-up of energy and watch in grim fascination his father’s blue beam fled the guns muzzle. The man that had hurt his mother dropped to the ground.

The ground in front of them suddenly erupted in a rapid series of puffs of dirt. Looking up at his father Ray watched as his shirt was torn open as the man he aspired to be like was tossed backwards by what seemed to be an invisible force. Crawling over to his dad Ray looked into vacant staring eyes.

Ray was confused and bewildered. He’d never seen anything like this before. Was this a new game that his mum and dad were playing? When was the happy part? He then looked down at his father’s rifle and he knew how this game needed to end.

He’d fired his father’s rifle a number of times before. All children that grew up on a farm in one of the colonies learned to fire at targets with their dads. Picking up the rifle in his small hands Ray lay in the grass and looked through the telescopic sights.

He saw the ugly pale faced man that had hurt his father and squeezed the trigger. The man died and Ray felt a little better for it. Just then Ray’s home and barn exploded in a ball of fire. A really big bad man had hurt Ray’s house so Ray looked through the scope like his father had taught him and squeezed the trigger again. The big bad man fell to the ground and then stood up again and turned in Ray’s direction.

The bad man smiled with sharp pointed teeth and lifted a much bigger gun toward Ray. That was when Ray’s angel arrived.

The undergrowth next to Ray suddenly parted and a man in a uniform that Ray recognized from the tridee-reels at school fired his gun at the bad man. The bad man fell backwards and didn’t get up anymore. Like before, Ray felt even happy about that. Ray’s angel rushed forward to and quickly touched all of the bad men with his blue beam. He then focused on the horrible black pyramid until the ball on the top stopped glowing. Ray was going to have a great story to tell his Mum and Dad at dinner that evening! Why was he crying? What was happening?

That was when he noticed the boy about his age lying beside him. He too was crying. His mother had always told him to help anyone that was crying so he said, “Hi, my name’s Ray. What’s your name?”

The boy looked back at him and like all brave boys quickly wiped his tears. “My name’s Thomas. Good to meet you Ray.”

“Thomas, do you want to be my friend?”

“I’d like that Ray.”

By this time Ray’s angel returned, bent down towards him and asked, “What’s your name son?”

“My mother told me not to speak to strangers. What’s your name?”

“Gasp.”

“That’s a funny name. I guess that now I know your name then you’re not a stranger. Mister, my name’s Ray. I think that my Mum and Dad’s hurt, can you help them?”

“I’m sorry, I can’t help them but I think that I can help the both of you.” Looking at Ray and Thomas, Gasp said, “Here take my hands.”

Ray and Thomas looked at the smiling face of their angel and reached up to hold Gasp’s outstretched welcoming hands. With his other hand Ray held firmly onto his father’s rifle.

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mgilmour
You raised some really good points.....I've now updated the story to not show that Ray thinks that his mother is dead. I debated ... Read More
05 October 2014
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Revenue Leakage

Revenue Leakage

Two words that you really don’t like to see in the same sentence is “Revenue” and “Leakage”. This is a polite way of saying money that you should have been earning that you really aren’t. I have conversations with people day in and day out that revolves around how to stop the leakage and make more money….so what I have learned over the years.

Revenue leakage comes in many, many forms. It could be that the domains aren’t installed correctly at a parking company or they’ve been moved out of your account at a parking company (this happens a lot). The nameservers aren’t set correctly or cNames aren’t up to date if you are using a rotation service.

The most obvious revenue leakage is forgetting to add your W8/W9 tax form or even your bank details to your parking account. I don’t know how many times I’ve received an email from a person accusing me of taking their money and not paying them. I check their account and they’ve forgotten to provide bank details. Their tone usually changes dramatically at that point.

Escrow.com

Another form of revenue leakage is not actually knowing what you own. The problem with domains is that they’re just so easy to forget about, drop and then lose. We had a client that had their domains littered across about fifty registrars and they had no idea what was going on. They asked for our help and over the next year we aggregated the domains into a single registrar, locked them down and saved them a fortune.

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Saturday Musings – You’re not going to believe what happened…

Saturday Musings – You’re not going to believe what happened…

Just over a week ago I’d published an article, went to bed and enjoyed the peace that only comes when everything seems to be good. The next morning I awoke to discover that two things had happened in a perfect storm.

The first was that my personal server had been hacked and with laser precision all of my websites, backups, configuration files and system had been eradicated. Trust me when I say that I had a LOT of protections in place but seriously, this was like a guided missile.

Escrow

The second thing that happened was that the primary hard drive in my server began to fail. I say began to because sometimes it was there and sometimes it wasn’t. I have a second physical hard disk in my server that I keep all my backups on and that was working just fine except this was hit by the hackers.

Some people have asked me about offsite backups and I answer this in two ways. It’s a personal server….and have you ever had to restore a 500 Gig backup over the wire from your home? It will take about 3 weeks just to transmit the data. Needless to say, I’m exploring “other options”.

So what was the end result of all of this? I lost everything on my blog from about February onwards. I would like to apologise to all of you that have signed up and have to do so again…..sorry about that. I would like to appeal to anyone that has any of the articles on either the “Domain Association” OR “Selling high value domains” as I would love to get them back up as I think that they were really ground breaking.

So what else have I done? I’ve reworked the site, updated the look and feel and I’m in the process of adding a lot more features. Despite the amount of work involved I’ve had a lot of fun rebuilding Whizzbang’s blog from scratch. I’ve also enjoyed learning about security, setting mail servers, database integrity, apache and PHP configurations. There’s nothing like getting your hands back on the tools. :-)

So thank-you to everyone that has been patient with me over the past ten days. If you notice anything not working then please let me know. In particular I would like to thank all of the sponsors. Each of you have been outstanding in your support.

Right now, I think that I’m going to take a rest and get back to finishing my science fiction novel…..it’s up to the fifth rewrite!

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whizzbang
I enjoy reading your site. It'd be a lie to say I do it daily, but I often go there and visit. I am sorry to read about this cri... Read More
27 September 2014
mgilmour
Hi Filipe, Completely agree with you about your comments on PHP. That's why we use Java in ParkLogic for about 99% of the coding. ... Read More
28 September 2014
DomainBELL
Suggestion... Each time you write an article -- eMail it to yourself on an outside eMail service such as Yahoo.com that way even... Read More
27 September 2014
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A Domain Name Association - part 6

I had an interesting question in one of the forums about the topic of a domain industry association. The question was, 'Why is Michael doing this?' This question really caused me to think why I was spending time thinking about a domain association and it justified an answer.

I looked at the two associations (thedna.org and ICA) and it was clear to me that they really didn't represent the interests of the typical domain owner in any way. For a start I have a real problem with any association where board seats can effectively be purchased. This is fine for companies where profit is the motive but in my opinion it is not OK for an association.

If an association is to truly represent members then EVERYONE needs to have an opportunity for a board seat....hence the concept of classes of members and an allocation of board seats per class that individuals could potentially win via an election in their class.

There also needed to be different fees per class (hence the financially modelling at the end of the presentation). The great majority of domain investors aren't able to afford $5K/year but many would put up their hand for $250/year.

Given the challenges I saw with the current associations I wanted to push the discussion forward in such a manner that it at least reached the two associations and a dialogue established at the domain investor level. So where am I at with my goals?

 

1. The ICA was represented by Andee Hill in the webinar (she is not a director of the ICA). The other directors of the ICA are trying to work out when they are able to jump on a call with me.....I think that many of them have been on vacation.
2. I have been contacted by the chairman of thedna.org and he is connecting me with the CEO. They are completely open to everything to embracing domain investors. This includes changing their constitution to ensure that domain investors have representation at the board level. It was actually a refreshing conversation with the chairman.

I find that the bigger challenge is to engage the domain investment community themselves. What has surprised me is the general apathy towards both associations and the discussion itself. There appears to be a disconnect in the VALUE provided by either association for domain investors. This could be a function of us tending to be "lone wolves" but I actually don't believe this is the cas e as domain communities do exist. Fundamentally I believe that both associations have failed to prove their value.....and more importantly for me.......I've failed in someway to proactively engage the community as well.

For example, out of the whole industry about 9 people said they would attend the webinar.....6 turned up. I've run webinars before on topics such as selling domains and had 18 people say they would turn up and 18 did. Just for the record I think that anything over about 15 people can become quite unwieldy. What's interesting is that over 500 people have read each of the articles in the series on "A domain association". This tells me that the topic is important to people but they aren't willing to engage as yet.

I would be interested to know if I am interpreting this correctly. I would also like any ideas on how we, as a community, can engage more effectively on the topic. Or, maybe we shouldn't and just let the chips fall where they fall . Should I run another webinar? Is the time wrong etc. Any feedback would be well received.....can't promise that I can do something but I would like to do my best and try.

I liked the picture of the key for this article as it has two sides to it. If only one side was present then the key wouldn't work. What we really need is for domain investors to speak to complete their side of the key and get their point of view across to the associations.......and myself for that matter. It's through an engaging dialogue that a better outcome for us all can be achieved.

I look forward to your feedback and comments.

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