I recently had the privilege of conducting a session at Domaining Europe on the topic of monetisation. Many domain investors have fallen into the trap that monetisation is dead and let me share with you that nothing is further from the truth. Domain monetisation is alive, well and thriving.

What has happened, is like any industry there has been an evolution in technology. Those that have kept up with the technological curve remain successful while those that don’t struggle to remain in business.

This is not dissimilar to the days of the buggy whip manufacturer. During the days of horse drawn carts they made an absolute killing. Then a strange contraption initially known as a mechanical horse came onto the market. This technological innovation was really expensive so the buggy whip makers all laughed at the early version of the motor car and continued to make their whips. The rest is history and other than the handful of craftsman buggy whip makers are no more.

It’s the same thing in the domain industry. On one of my recent trips around the world I was talking to a domain owner that had been in the industry for years and he was decrying that monetisation was dead. I asked him one question, “What are you doing now that you weren’t doing five years ago?”

He replied, “I’m doing the same thing.”

I then said, “So you are expecting a different result by doing the same thing? You do know that’s the definition of insanity, don’t you?”

Of course, he wasn’t insane but how many domain investors behave in exactly the same manner? Five years ago they placed all of their domains with a single company, watch their revenue line fall and then claim that it has nothing to do with their own behaviour but the industry. The problem with these domainers is that they are still trying to make buggy whips rather than innovate.

So in this series of articles I’m going to share with you what I do with my own domain portfolio and more importantly why I do it. Since I’m a numbers guy, as much as possible I’m going to track everything back to facts rather than fiction and gut reaction.

When I think about optimising my domain portfolio I place each asset into one of four main buckets.

1.      Development
2.      Traffic
3.      Stock-items
4.      High value

In terms of development, I have whizzbangsblog.com and after a hiatus of about five years I’m in the process of rebuilding my aviation website downwind.com. Why these two domains? I’m passionate about both sites and I really enjoy engaging with readers. For example, those of you that have left comments here at whizzbangsblog quickly discover that I really enjoy replying to questions and helping other domain investors out in any way I can.

Developing a website that you’re passionate about is really important as it will spur you on to write or work on the site into the years ahead. I was speaking to a domain investor about developing a website into a business and I shared that it was actually really easy to do. In my case, all I had to do was write an average of three articles a week for nine years. Voila! Success :-)

I’m actually really proud of the articles here on whizzbangsblog and I often find myself trawling back through the archives to review how my thinking on a topic has developed over the years. I also find that I do much of my thinking about the domain industry and all of the opportunities within it while writing articles. It may sound strange but it’s my way of relaxing.

Every domain investor should have a couple of projects that they are developing into real businesses. In the case of whizzbangsblog I have the privilege of Escrow.com and Epik sponsoring my blog and this helps fund my time for writing.

I'm really careful about the number of sponsors and who sponsors my blog as I'm tying my own reputation to the services being offered by the sponsors. If their services aren't any good then it reflects badly on me.

With the relaunch of downwind I will be seeking aviation industry advertising as the traffic grows.

What’s really important is that when you develop a domain, develop it into a business. Don’t try and make something pretty because you like pretty websites. Focus on the end goal of how you will make money from the site so that what you develop is sustainable over time.

For the record, it doesn’t take much to get a good website up and running. There’s many different platforms available for managing the content. I personally use Joomla but wordpress is just as good.

If you spend over $1,000 getting an initial launch of a website put together then you’re probably spending too much. Make sure you get your first dollar of revenue in as fast as possible and whatever happens, learn from customer feedback!

In the next articles I’m going to dive really deep into my thinking around the four business models and how they help me optimise my domain portfolio for greater profitability. In the process I also plan on revisiting the series on pricing domains.

Sadly, when I look at the world today I see that it’s largely been caught up in the hysteria of fear. It’s questions like the following that seem to be plaguing everyones mind as the media pumps out an endless litany of terror.

Who will win the presidential race? Does that person walking down the street carry a gun? What are the implications of Brexit? Will I keep my job? Will my kids love me when they’re older?

Like the USA, Australia is in the middle of a federal election campaign. The two major parties here have finally devolved into, you guessed it, fear campaigns. You can almost feel fear's icy tentacles grip the nation as the attack commercials are shown time and time again on the television. It’s really quite sad.

Being bound by fear of the future and what may happen can be debilitating. One of my favourite science fiction books is Dune by Frank Herbert. In the book there is the following quote:

“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.”

The quotation takes a stand against fear and states exactly what it is, a mind-killer that brings death and destruction. So how do you overcome your fears?

I was recently traveling on a packed bus in Amsterdam and an odd thought crossed my mind as a looked on a lady with wearing a haj, “If she has a bomb vest on I would never know.” It was ridiculous, full of bigotry and most of all fear. How do I quickly get off the bus? Will I have time? Am I right with my maker?

All these thoughts rushed through my head until I mentally faced my completely irrational fear not with mental fortitude or grim determination but with love. I decided to look on the people around me not as faceless individuals but as mothers, fathers, brothers, sisters and children. The woman wearing the haj wasn’t nearly so scary anymore. Suddenly, my fear evaporated and instead I found myself smiling at those around me (they probably thought I was crazy – LOL).

There’s a great quote from the Bible which says, “Perfect love casts out all fear.” President John F Kennedy said, “It’s amoral when men and women of good conscience fail to act.”

So in these turbulent times make a decision to show your love for your neighbour, your friends, work colleagues or even the stranger down the street. Together, if we stand against fear we can make a better world, despite our leaders, a world that we can enjoy with our loved ones.

Have a great weekend.

Well, the news is out! Britain has just exited the European Union and the global financial shockwaves are only rumbling through the markets. It’s only been hours since the announcement but what does this mean for Domain Investors?

For a start, the forex interest in the event has been so enormous that popular website XE.COM crashed. I spent the last ten minutes trying to get any sort of activity and finally gave up. My guess is that it’s experiencing the impact of a very real DDOS (Distributed Denial Of Service) attack from genuine requests rather than a large botnet.

After flipping across to Yahoo Finance I was able to see that as of this article the Pound has dropped over 12.65% against the USD. Likewise, the Euro has fallen by 3.6% and this will mean a possible boom ride for European domain investors.

The majority of the online advertising market is still in the United States and so any advertising dollars earned will need to be converted to Euros or Pounds. If a UK based domainer earns $US1 they will effectively get an additional 12.65% free of charge.

What it will also mean is that European investors will baulk at the idea of buying US based domain assets as they will be paying more for them.

I must admit that I’m pretty happy with the Australian dollar crashing by nearly 4% against the USD and nearly 3% against the Euro. The majority of our expenses at ParkLogic are in AUD and so this means we have more to pay the bills.

What we don’t know as yet is whether these rapid movements in the forex markets are a precursor to something else. Is this just the rumblings before the major quake? Remember, the majority of the European countries are so debt leaden that a decline in both the Euro and Pound is going to place a lot of pressure on their finances as debt payments come to term.

The currency interactions to really watch is the USD/CNY (US to China) exchange rate. It’s already increased by nearly 0.5% and with China’s massive debt this may be the straw the breaks the camel’s back. China is really caught in a difficult situation where they need a high currency to pay off their debt and a low currency to keep the economy flourishing with exports.

The CNY is also appreciating against the pound by 9.07% and this will mean the Chinese economy will be that much less competitive exporting to the UK and Europe. This will have a flow-on effect to the Australian commodity based economy that many economists are suggesting will cause the AUD to fall to around $US0.64.

All in all, I think we are in for a really interesting ride and US domainers are getting set up to be in a really strong position. With a strengthening USD bargains can be snapped up from around the world while living in a parity environment within the US. What is certain is we’re all going to be in for a really interesting time as the global financial markets rebalance on the news of Brexit. The question is whether the rest of the EU will begin to break apart…..time to get the popcorn out!

Sorry.....just edited the post and couldn't resist adding the following chart for the movement of the gold price over the last few hours. You'd think that something was happening in the global financial markets wouldn't you!

In the last article in this series I began to unpack the importance of the demand curve for accurately pricing domain names. My experience with domain sellers is that most of them price their domains more by gut then attempting to apply a process. In this article I want to move my line of thinking forward to help sellers more accurately price their domains and buyers know if their getting a fair deal.

I should say out the outset that I’m going to keep everything as simple as possible by minimising the number of input data points and mathematics…..but hold onto your shirt as it can still get a little tricky! Remember the goal is to see if we can create a demand curve for a market vertical and then attribute pricing to this curve. So where to start?

We can use the google keyword tool (remember there are a LOT more other data points) to provide us with both quantity and price for an individual keyword. It just so happens that the price is more often than not a reflection of the demand for that keyword due to the Google auction system amongst advertisers. Google also provides a competitive index which is really interesting and bears a lot more thought…..I won’t be applying the index for this analysis.

So I entered a whole lot of “gaming” keywords into the keyword tool and out popped the data that I was after. After a bit of manipulation, I was able to produce the following chart (price is the vertical axis and quantity the horizontal). I really haven’t added a huge number of data points but it provides a reasonable picture of demand for the gaming market vertical.

The next thing I add is a power series trend line (blue dashed line) which I can then use to approximate the demand curve for gaming traffic. It just so happens that Excel has a great feature that allows you to display the formula of the trend line on the page. In this case it’s 40.053X^-0.0537. For those of you that have forgotten your maths, this is 40.053 times by an X-value raised to the power -0.537. Basically it’s the formula for a nice curve.

After some more complicated mathematics using some integral calculus I was able to determine the area under the blue line. Why is this important? What we do know is the average domain name sells for $1,000, therefore the mid-demand point should reflect this valuation. It just so happens that the mid-point is at (1510,0.786). I’ve highlighted this on the graph below.

So what do we now know? Right up the top of the demand curve are the generic category killer domains and rightly, this is where the curve asymptotes into the stratosphere for pricing. For instance, games.com is worth a LOT of money and this is where this domain would reside on our chart.

At the far right hand end of the blue curve we have a rapid drop off in demand. Any keyword domains that find themselves out this end of the spectrum should be dropped. This is where domains such as reallyawesomegames.com belong…..just drop these ones or at the very least put them up for sale at just above registration fee.

By using the Google keyword tool I can now type in any of my domain names to get the suggested price for that keyword. I can then plot the price on the demand curve and determine whether the domain is above or below the $1,000 point.

Now here’s where it gets tricky. What we don’t know is whether the pricing scale on the right is linear, logarithmic or some other scale all together. My intuition suggests that this scale must relate somehow to the size of the market and the overall demand for the individual domain we are trying to price. I need to think about this a little more.

So what can we now do? We can generate a demand curve for any market vertical, plot the mid-point to work out whether our domain should be priced above or below $1,000. We should also be able to view those domains that are category killers and those that should be dropped. It’s a start in the analytical process…..and hopefully I can refine this further.

As I said in my previous article, I really value feedback (good and bad) that provokes additional ideas….so feel free to pitch in with questions and suggestions.

I turned on my television this week to be faced with yet another massacre being perpetrated across the screen. Innocent lives snuffed out in an instant by an unbridled rage empowered by a maniac with twenty-first century weapons. All of this in the name of an ideology that has a complete disdain for life and liberty.

The biggest problem with terrorism is not that it appears insane, because it’s not. The biggest problem with terrorism is that its carefully orchestrated to play to the ferocious western media appetite. Just think about it, one attack and the terrorists get a couple of week’s media play in prime time that would have cost millions of dollars to purchase.

So what we are looking at is not the mad outworking of a deranged individual but an entirely different kind of warfare that the massed military might of western nations is struggling to come to grips with. So if this is a new type of war then what’s the objectives of the terrorism?

I wish that I could come up with an instant answer to this question but sadly that’s not going to be the case. What I do know is that the middle-east is a seething hotbed of dictators, warlords and extremists all trying to enforce their will on an oppressed people. Each of the groups are also armed with weapons that come from either the east or the west…

Overlaying all of this is a western alliance that flies in at thirty thousand feet to blow the extremists back into the stone-age in the name of securing our energy supply (ie. oil). What would you do if you were a goat herder minding your own business and just watched your family get blown to smithereens by any of the above geo-political forces?

In a fit of frustration and despair you willingly don an explosive vest with the sure knowledge that you’ll be joining your family soon. You end up viewing everyone as the enemy because they have something that you no longer have……a family.

Those that still have loved ones or haven’t suffered some emotional trauma from the endless conflict (not sure if there is anyone left in this group) have braved a mass exodus to what hopefully will be a better life. As testament to the drownings in the Mediterranean, many of them won’t make it.

Just think about this for a second. The goal of the current mass migration is fleeing their country and into the arms of those people that define them as collateral damage from a drone strike. To give you an idea of the torment these refugees have been afflicted with, we (ie. us) are seen as safer than where they are fleeing from. Remember, most of these refugees have been fed a diet of the west being the great Satan….and yet, in desperation, they still come.

As I watched my television I was reminded of another oppressed people…..the gay community. When you compare them to the people of the middle-east you can see many similarities. For years, gays were hunted down, murdered, assaulted and at the very least bullied by powerful individuals, communities and nations. The stories shared by gay individuals are often truly horrific and terrifying.

So how has this oppressed minority responded? Did they rise up with weapons and bombs to make their point? No, on the whole they responded in love, patience and kindness. This is despite the fact that they were watching loved ones die from AIDS while protesters heckled them.

In the latest shooting in Orlando, what does much of the media give air to? The fact that there are going to be anti-gay protestors at funerals (this completely sickens me) and lots of details about the attacker and his links to ISIS.

It would have been nice if the media reported on how the gay community has responded in love for each other and their fellow man. Even though they have just cause, none of them have donned an explosive vest or raised up arms against anyone else in response to their trauma. They have “turned the other cheek.”

The gay community has provided a clear example for the terrorists of this world to follow. If you really want change then respond in love not hate, life is precious not cheap and mourn with those that mourn.

Likewise, over the years, the west has become experts at blowing things up. Maybe it would be better to put our arms around the goat herder in compassion rather than call his family collateral damage?

Terrorists leaders that prey on the misery of distressed individuals and send them in to blow themselves up should also know that love is strong. If you refuse a message of love, for the sake of the billions of people in the world you will be found and brought to justice either in this life or the next. In the meantime, the rank and file members of such extremist organisations, put your weapons down and embrace a much more radical concept that brings lasting change…..”love thy neighbour”.

I will continue to pray for the gay community that lost so many loved ones this week and for the perpetrator that bought into an ideology of hate rather than love.

Have a compassionate weekend.