We wish you a Happy New Year and now that the clock has hit 1.1.11 its another year and we start it out $750,000 in the hole.
We own around 75,000 domains and with a carrying cost of lets just call it an average of $10 a year meaning that we will owe $750,000 in registration fees in 2011.
Its a huge nut although some domain portfolio holders have hundreds of thousands or even million or domains, so they woke up this morning to a bill in the millions of dollars.
Its no wonder that some domainers are supporting the CFIT litigation against Verisign whose contract allowed four 7% rate increases in a time where there was 0% inflation.
Its good to be a monopoly.
But that’s another post for another day.
So we welcome the new year, but are reminded come Monday we have to go to work and make over $2k a day just to pay Verisign its fees.
Happy New Year.
wow that’s a lot of domains. I am guessing they should have some quality and pay themselves off just by parking, so you should be ok 🙂
$750K in registration fees are insane! But thats what happens when you own that many – look at it this way – Im sure that most of the domains you own could easily be sold for way more than $10 – so yes its a huge upfront cost – but Im sure that in time you will recoup the initial investment and start making some cash
Good luck with that.
Did I not read a post recently about WWM turning down offers for close to 1/2 mill on a handful of domains? You can’t be hurting that bad.
You are doing it for the love of Domaining.
Father Domainique will bless you.
Hi…you can mimic the model of Demand Media. Spit out lots of contents, inflate your earnings and go for an IPO. But make sure Google is on your side 🙂 Happy new year.
Thats a huge no. of domains. I am sure your domains could easily pay for themselves.
Easy solution. Just drop them.
I had a nightmare last night that my network of websites became so wildly successful that I didn’t have enough resource to support them all, that the whole thing just came crashing down. My paid subscribers chase after me for a refund because all my websites were down. I looked into my paypal account and all the money were gone. Apparently, someone hacked into my account and took all my money. Heads off to all the successful entrepreneurs.
@MHB
Just curious, about what percentage of the nut would you say is covered by monetization methods? (if you can disclose)
Sell bro,
I know the “but I can make XXXXXXX more if I keep them all.”
Nonsense, you never really know. Sell since you will have more than enough to ride any upside.
But it’s amazing how maintaining a secure database requires $7 or whatever Verisign gets for entry. I bet Google, MSFT and AMZN can do it for a dollar or so each.
Renewal fees aren’t all bad. If they were very low like $1/yr, very few domains would ever drop and latecomers or small holders would never be able to get any quality domains.
Picked these up on the drop today for regfee:
BlackLaminate.com
OpenBookcase.com
ProgramMBA.com
These are still available:
FreeWirelessRouter.com
IrritableMaleSyndrome.com
You are definately a domainaholic.
Give me $1,000 and add these two more domains to your list…
Domainaholic.com and Domainaholics.com
You need these two domains with your domainaholic problem that you have!
Happy New Year 2011
I am curious to know weather you receiving a consistent parking revenue 😀
Large portfolio holders could get together to create some sort of bargain bin comprised of names cued for culling that people could rummage through for $50 or $100 a pop. Perhaps there’s some names you’re sick of carrying- keyword names that are just barely too good to drop- but might be a tough sell otherwise, they don’t get any cold inquiries, no typeins, few whois lookups…. Maybe these names are $200, $400… A Godaddy type auction/closeout process would probably work to capture any unexpected upside.
If you guys saw wisdom in these names, others will too. Better than letting them fall off for nothing, plus, some domainers would get off on owning a name with provenance.
Decent way to make some lemonade- would be better than existing marketplaces that are loaded with dross. This selective marketplace would at least have a baseline of quality. Pretty certain the trash of these portfolio holders would be the treasure for a lot of people.
Verisign’s blatant monopolistic pricing practices & price increases as well as the allowance and enabling of this by ICANN is nothing short of outrageous.
Sobering, to say the least. Best wishes in ’11.
I find myself wondering, of the major .com stake holders (MHB, Schilling, Marchex, iReit, etc….) what percentage of verisign’s .com base do they all make up? Probably not even 1% which is amazing. Furthermore, even if they made up 80% if they were all to protest .com prices and not renew it wouldn’t matter anyway because someone else would just pick up all the names on the drop. Even though verisign sure looks like a monopoly it’s hard to say that they are holding a gun to anyone’s head to renew, it’s the market competition driving renewals. I do believe that if verisign raised the prices so high that it wasn’t worth renewing the domains then we’d start seeing domains drop that don’t get re-registered so quickly. It’s not like domain names are gas for our cars which we need to get to work, and have just about no choice but to buy.
There is a developing market for domains priced $1500 and under. My best sales marketplaces are SEDO and Godaddy Premium Listings. If you always try to hit a home run, you can lose many solid offers which you may never see again. Of course I’m not saying accept lowball offers but just be reasonable with pricing.
What’s life without risk….. ride the life bro.
On the other hand, with that many domains parked / for sale, business should be quite steady and allow for certain projections?
I don’t think he was looking for advice from a bunch of domain scrubs. Just bitching about Verisign. Obv they make more than that with parking alone and probably close to that or more from sales each year.
Mike,
You can reduce the cost $100K with one sale. 🙂
Just put ’em all up on Sedo at no reserve auction. Then go sit on the beach the rest of your life – problem solved. The simplest answer is usually the best.
– TBC
Let’s hope it is a very active year for you then Mike. I love your bedding ecom site, very clean.
Thanks for all the comments.
William conclusion is right the point of the The post was complain about VeriSign’s fees which keep rising and just to point out that the large domain portfolio owners have quite the nut because of them
Our sales run into the 7 figures every year (on the offers we accept) and our monetization more than covers our registration fees.
However if VerSign is allowed to raise prices for 4 out of every 6 years going forward and they are now allowed to do under a contract with a presumptive renewal, its going to be come an issue in a few more years.
JP
The last time VeriSign included the % of “parked domains” as a total of .com/,net registrations in their state of the domain quartely report, the number came in at 7%.
VeriSign now longer reports on this and stopped about a year ago.
Of course many domainers own sites that do not resolve, or are used for mini-sites or for developed sites or forward to affiliate programs or in many other ways.
So if your asking what % of registration domainers are responsible for my guess based on the above info is 15%
It is all about IRR in the end of the day.
12k names here. Yay Verisign! Although I did appreciate the comment about why higher reg fees aren’t all that bad. We pick up a lot of dropped names.
“We own around 75,000 domains”
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“own” ? really ? can you prove that ?
Is there a list of those 75,000 domains ?
Do you think you will “own” those on The.Real.Internet® ?
.OWN ? Oprah Winfrey Network ?
Big
Yes there is a list
go check out our site:
mostwanteddomains.com
Regarding the rest of your post I can’t make heads or tails out of it, which makes it par for the course
thank goodness domains aren’t still $100 or even $35 a year. I only have about 300 domains left, but for a little player 2100 is a big nut off the top.
I also have several banks of domains for the purpose of selling domains and was not pleased with the raise in rates from 10 to 15 dollars. My solution is simple I am dumping inventory and keeping only premium stock. And as for new inventory I will do the same. I am still making very good money on domains so Im not going anywhere. I do think some of the registers will loose long term. I will slowly buy new stock at cheaper registers and only use companies like netsol for holding high dollar domains in use by customers. Have a Happy New, I think 2011 is going to be a year of Tech and Tech stocks….
MHB, since your portfolio size is more statistically significant, how are things going compared to pre-2008?
Good
I think almost every domain portfolio owner will tell you that parking revenue are down substantially since pre-2007
@Big
I own a car that has no title. Why does the car have no title, because the dealership (now out of business) who sold me the car screwed up the paperwork and I didn’t discover this until I went to refinance a few years ago. Who is it titled to? The previous owner who used to live in another state when living. After countless wasted hours trying to get a title I came to the realization that I don’t need a title. Why? Because I own the car already. How do I know I own the car? Because I get into it and drive it every day and it works fine. All those pieces of paper aren’t doing me a bit of good, but the car is, and better yet, it can’t be registered anymore either so the parking tickets don’t mean anything either, yet it still drives just fine. Heck if I don’t pay the current loan payments it can’t even be repossessed because according to the platform I don’t own it, yet I benefit from it every day.
The best part is after talking to the police, they don’t want it either because they can’t legally take possession of it to be able to sell it either. Don’t take too much stock in the system, it’s there to make the system money, not you.
Whether or not MHB can satisfy you he owns those domains is immaterial given that during the time you wrote that last post he probably made enough money to cover your rent for the month off those domains. If that ain’t ownership today then I don’t know what is. Or maybe the FCC is paying your rent?
Sorry Mike, I got sucked into this one. I’m getting real tired of this guy. I’ll be sure not to next time.
““own” ? really ? can you prove that ? Is there a list of those 75,000 domains ?”
Idiotic statement. He said he owns roughly 75,000 names. If you don’t believe him go and prove him wrong or say it’s impossible /improbable.
Or place a $10K bet and I’m sure MHB can take a few minutes to do a dump from the database.
Good luck with the concept of “own” whether it is one domain or 100,000 domains.
Obviously, for many “own”, equates to income which comes from traffic.
If the traffic stops, the income will disappear.
If the income disappears, for some, the concept of “own” may become a moot point.
Domainers are in for a rude awakening if they show up at the ICANN meeting in the USA in San Francisco in March 2011. Those $7 domains could become $70 per year to see how deep the high-roller’s pockets are.
Its January 1 & We Are $750,000 In The Hole
Its January 1 & We Are $7,500,000 In The Hole
@Big
I’m curious, are you doom and gloom with everything (ie: America will collapse soon etc…) or do you just have a personal problem with domainers? Basically, are you trying to be helpful given your viewpoint or hurtful (not that anybody is feeling hurt)? Again in a nutshell what is your point that you have spent countless words trying to get across? Here I am, 1 person who wishes to receive your wisdom. What is it? What is the answer? What is the meaning of the Internet? Seriously, I want to know, I’m not being fescisious. If you can’t answer this simple question in a way that a mere mortal such as myself can understand it then you (specifically Big) have lost my attention forever.
Its January 1 & We Are $750,000 In The Hole
Its January 2 & We Are $7,500,000 In The Hole
Its January 3 & We Are $75,000,000 In The Hole
…
it is tradition, when you go ALL IN…you stand up
…
bring all of your money to San Francisco in March – People will be waiting with open arms
As I’ve pointed out before, toll-free numbers cost less than $1.50/yr, as per the tariffs listed on SMS800.com (10.54 cents/per month, as noted on the 2nd last page of the PDF), and have generally been *falling* over the years. I see no good reason why dot-com costs should be any higher, especially given:
a) there are more dot-coms than toll-free numbers (greater scale)
b) internet costs for routing/DNS, etc. are likely far less than telephony switching costs
ICANN gave VeriSign (and other registry operators like PIR, Neustar, etc.) sweetheart deals, at the expense of the public interest (one that brought in lots of money to ICANN, allowing its budget to be $60 million/yr and its staffers to be highly overpaid relative to other non-profits). Hopefully the CFIT lawsuit will force those contracts to be eventually put to a tender process, wherein the lowest bidder for a set SLA gets the contract for a fixed period (say 5 years), just like nearly every other procurement contract.
However, the new TLD drat contracts might provide the opportunity for even greater price increases upon existing domain registrants, due to the “equitable treatment” clauses. Since there are no firm price caps on new TLDs, com/net/org/biz/info registrants might eventually face far higher prices in the future. Of course, the “economic studies” didn’t do a proper analysis of this important issue (which, if you go back, was the impetus for the studies in the first place, i.e. the tiered/differential pricing debate).
If dot-coms cost $5/yr less, Mike would have $375,000/yr in savings. That’s 10 jobs at $37,500 that Mike isn’t able to create, because of the ICANN-VeriSign “tax” on just a single domain name registrant. 10 people that could be employed (or heck, maybe he’d spend some of it on himself and his own family). Factor in all the other millions of overcharged registrants, and that’s hundreds of millions of millions of dollars being used for ICANN overpaid staff, VeriSign lobbyists, VeriSign CEO bonuses, etc., rather than tens of thousands of productive jobs that consumers and businesses could be creating. A tax is ultimately a job killer. If the “tax” is $500 million/yr, that’s 10,000 jobs @ $50K/yr.
“Hopefully the CFIT lawsuit will force those contracts to be eventually put to a tender process”
====
1. ICANN treats lawsuits as “Sport” – More money goes into the legal community pockets at the expense of Netizens.
2. The Eco.System has an interesting and extremely subtle way of moving MONEY to the pockets of people that could mount a legal challenge (such as CFIT). The result is a loss of interest (and funding) for a lawsuit like CFIT.
3. It does not take a rocket-scientist or economist to see that Governments (USA and Canada) are now running the ICANN show. It was the U.S. Department of Commerce, NOT ICANN, that set the $6 Registry fee.
The U.S. Government can edict sub-one-dollar Registry fees any time it
desires. The lead U.S. Department of Commerce executives earn about
$185,000 per year. A $500,000 per year non-profit ICANN staffer or
ISOC insider is not going to reduce Registry fees.
4. Until you get to Billion Dollar amounts, you have not reached the radar
screens of the incumbent Registries or the U.S. Congress. Anything under
a billion dollars is “pigeon feed” in domainer language.
$2,000 a day, so much for passive income…that’s work!
Mike,
Between two email accounts, you own about 75,950 domains. No matter how high Verisign raises their fees, you will never have a problem.
Your portfolio has too many gems. One of your city .com is worth the cost of yearly registration fees for all 75K+ domains. You will always be able to make the adjustment.
I’m sure you can handle $5K per day in fees. As fees continue to increase in the future, you will probably accept more offers on your high profile domains. Your newsletter resume, and other high demand domains will make you plenty of ad revenue this year.
I wouldn’t mind carrying the fees with many high priced domains. In addition to fees, you probably spend money acquiring more domains. Your acquisitions and sales balance out your portfolio.
Keep having fun.
Whether you’re a domain investor, a domain hoarder or a “squatter” all depends on who you ask. If you ask us, we’re investors. If you ask anyone in tech, we’re hoarders. If you ask John Q Public, we’re “squatters”.
I think it’s fair to assume that ICANN is not pro domain “investor”. They probably don’t care much about the interests of people who buy domains to hold them in some sort of unproductive capacity and park them for income or to resell to others. Just a wild guess, but I’d bet if Postel knew what it would become, the domain name system would be *a lot* different on the acquisition side and there probably wouldn’t have been much room for ‘domain investing’.
Safe to say, the entire concept of domains as some sort of “eRealEstate” is contingent on a few things being allowed to continue to happen. I don’t think the ‘domain game’ is quite as resilient as some people think it is. Small changes to the way things are done can have an enormous, disruptive impact on domain ‘investing’. Obviously, price is the big one.
Make hay while the sun still shines.
“I’m sure you can handle $5K per day in fees. ”
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With domainers (high-rollers) broadcasting the ((size of their package)), their enormous profits and abilities to pay MORE fees, you can bet many people in the Eco.System will be listening and devising ways to service those needs.
People can also follow some of the incumbent Registries. (not .ORG)
“VeriSign Friday declared a one-time special shareholder dividend of $3 per share, to be paid Dec. 28 to shareholders of record Dec. 20. The special dividends will total $516 million. VeriSign, which sold the security division for $1.4 billion, says the sale generated more than $1 billion in profits for the company.”
Wait till someone figures out how to tax it like they do utility bills including fees to provide domain names to people and countries who can’t afford it. With the fed and local budgets in the hole, and CADNA lobbying Congress, don’t think they won’t look at this.
“Our sales run into the 7 figures every year (on the offers we accept) and our monetization more than covers our registration fees.”
Hole?? …That sounds more like you’re in a gold-plated penthouse not a hole 😉
Even if the reg fees go up a fair bit
“Small changes to the way things are done can have an enormous, disruptive impact on domain ‘investing’.”
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YEP !!!! √√√
despite that, there are some constants that do not change.
1. Human Greed (profit or non-profit) has no bound, no limit.
2. Those that have the Pesos have the Say-Sos.
3. TPS is a real factor, especially in Australia and Canada.
4. The American .EDU.Military.Industrial.Complex.ARPA is deadly
A cocktail mixed with equal parts of 1 to 4 above and fed to high-roller domainers creates a very ugly mob scene.
TheBigLieSociety, you have officially jumped the shark–a dozen posts ago. It’s my blog, but if you go away and hide in your bunker I will not miss you.
“It’s my blog, but if you go away and hide in your bunker I will not miss you.”
It’s not my blog I meant to say
Simple solution folks, just add the string “thebigliesociety” to your junkmail filter and at least the emails will stop, making it spam free to subscribe to blog posts here and elsewhere again.
Domains and computers work in unison. Domains registration was must higher until more registrars were accredited, and people took notice that domains had investment potential. Computers used to cost several times more.
Introducing more variation and reducing prices stimulated the growth of domains and computers. It wouldn’t make sense to raise prices high again. The housing market didn’t last under those conditions.
7% and 10% increases increased overhead costs for elite domain investors. If prices do skyrocket, they’re smart enough to determine which domains to retain, and which to move.
I operate on a much smaller scale. Even domains that don’t perform still remain in my portfolio. Whereas, I will look to sell names I know will attract buyers.
When the interest rate increases a half percent, businesses will reduce their investment. However, they will increase their investment at the moment in which the rate decreases.
Price is not always the factor. When there is quality domains available, people will spend the money to acquire them. There only one name in each extension.
Reducing supply will increase demand. Increasing prices will increase supply and decrease demand. Domain registrars that rely on new registrations and renewals will suffer the most.
Domain investing is a business just like any other. Increasing the price to $70 is not going to happen. Many companies use the Internet as a secondary revenue generator. Such companies that sell houseware products only make 11% of their revenue online.
The Internet is an advertising gold mine. However, advertising dollars are still spent on print and commercial advertisement. The domain industry is a pebble compared to the stock industry or the housing market.
Essentially, domains serve as advertising tools which inform customers, generate sales and to function as online businnesses. Raising prices tenfold will cause registrars to fail and change the advertising landscape. CPC cost will increase, and competition will increase.
In my opinion, raising registration prices will severely impact the domain industry. Cell phones, computers, the Internet, and cell phones have a similar history.
As more companies were introduced in various industries (i.e. Porter’s Five Forces), prices were then reduced to meet consumer demand. If registration fees increased to $70, I could only retain 30 domains. I would drop the rest. You have to evaluate performance and future potential. Anyhow, enjoy the affordable cost. Don’t look too far in the future.
A few random modification in last post. My Iphone actually performed better than usual. Drop the ‘s’ in domains in paragraph 1.
Change ‘there is’ to ‘there are’ in paragraph 6. Lastly, competition for CPC would actually decrease if registration prices increased. Thanks.
“Domain investing is a business just like any other. Increasing the price to $70 is not going to happen.”
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FREE domains will likely change the game, but there may be a ((“cost”)) to maintain FREE domains. Price is not cost.
Domainers really need to head to the the ICANN meeting in San Francisco in March 2011.
ICANN I* insiders are sort of like Church.Pot.Luck.Dinner attendees who have
no clue where their meal is coming from. Heading to the ?free? buffet line 75
times before others get a chance to eat may be viewed as “excessive”.
Obviously, some domainers seem to think that demonstrates their ability to
game the system. ICANN insiders label those domainers as “scumbags” and
“trailer park trash”.
The Eco.System will make adjustments now that it sees how humans behave.
As noted, small changes, can have a big impact on “domain investing”.
Michael
do you have a plan b that assumes that all domains will be worthless?
Everyone seems to be dark on the domain outlook. The Internet is in its infancy stage. Domain names are always going to be in demand.
As long as there are search engines, commercials, branding and business, domain names will retain their value.
This is a huge problem for domainers
Cost per click is going down
Cost to renew is going up
Both registers and ad parking should wake up!
Huge daily expense mike Berkins
When one makes high profile sales, there is nothing to worry about incurring average daily fees. A handful of 6 figure sales will cover all fees.
The batch of 1491 are super elite domains, with some domains worth the 7 figure range. Whereas, the recent 7% fee increases the amount to $55k in additional fees.
A few $60k sales will cover reg for 2 months. Parking revenue is more than enough to cover fees because there are many high revenue sites in the bunch.
“Its no wonder that some domainers are supporting the CFIT litigation”
And may I extend a hearty “you’re welcome” to those who aren’t.
Just another thing that us “slightly retarded” attorneys with “no morals” does with spare time.
“Domain investing is a business just like any other. Increasing the price to $70 is not going to happen.”
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FREE domains (and Services) will likely change the game, but there may be a ((“cost”)) to maintain FREE domains (and Services). Price is not cost.
://domain.opendns.com/MostWantedDomains.com
://domain.opendns.com/TheDomains.com
://domain.opendns.com/MostWantedDomains.COm
://domain.opendns.com/TheDomains.COm
As we enter 2011…
…anyone with 75,000+ domain names that is NOT running…
…
their own .COM Clone Servers and…
their own Reputation DNS Platform and…
their own Public DNS Service (ala Google, Amazon, etc)…
their own CDN Cache Network (ala Akami)…
…
and their own Set.Top.Box Internet@TV CPE DNS…
…
is not a player to be taken seriously…
BTW – Some claim 5,000 domains (.COM?) is the magic number where owning your own Registrar becomes essential.
…
that is apparently now totally turn-key and a numbers game…like the rest of the “domain industry” and Eco.System
…
18 cents is the annual cost of a .COM domain – various forces will likely reduce that to 15 cents which matches well with $100 debitcard account limits by governments
…
people with 75,000+ domain names are obviously probably invited to the various meetings in Washington D.C. where the details are worked out
If price increases are imminent, one possible solution to manage some of the cost is to renew domains out for 10 years. It can get expensive for portfolio owners, but it does provide at least some hedge.