Domain names are huge. Internet real estate has been hot since people like Rick Schwartz first started realizing their value in 1995, but once the Google Economy made it easy to put ads on parked domain pages, the drive to acquire as many domains has been pumped up. Clearly there is tremendous value in domains that are general enough to get natural "type-in" traffic. The challenge is figuring out what is best to do with it.
Today, there are many services such as DomainHop and Seeq that let you park your domain, identify a category for that domain and make money on people who click on ads. Over time, such services have become more crafty in creating parked pages that appear to be actual websites. The idea here is to trick the user into thinking it is a website so they will stay on it and inevitably click on a link, which adds money to their respective Google ad accounts.
This is a very primitive way to make money on your domains. People and companies that own more general domain names such as lawns.com ought to do more. Presumably this is the premise behind big investments by VCs such as Insight Venture Partners into companies like Vendare Media with huge domain name portfolios. The idea is to build a destination for a domain like lawns.com.
But how? First of all, creators of these destinations need to step outside the box of today's thinking on how to make money off general domains. The solution lies in thinking more like successful online communities today. Up to now, I have seen attempts at destinations that are really only a couple wikipedia entries slapped onto the site with a free message board. This will not cut it.
Instead, destination-makers should look at the About.com model and hire some experts to lead the creation of content on the site. As About shows, experts are not necessarily expensive, and they are driven by a desire to share their passion with people. For lawns.com, multiple categories could be established that separate the various sections.
The key here is that the website has significant utility for the user right away. A blank message board is not going to do it. Ask yourself what the most passionate curator of lawns could want in a website. Perhaps they want photos of others lawns, discussion with fellow curators about how to maintain, arrangements for meet-ups in person based on zip code or city, and live discussion led by the experts you hired.
The bottom line here is that you need to appeal to visitor interests (easier said than done), and that means lots of specifically useful content. The good news is that with the advent of blogs, you can identify people who fit the bill by searching them out and compensation is not significant.
Of course, treating the question of "how to build a destination" to one brief blog post does not come close to doing it justice, but consider it an introduction to the most important point. That is, building a destination around a domain requires throwing out current models of thinking about driving people to immediately click on ads. The purpose should be to provide value to the user to drive them back overtime.
When the user is served and they submit content to the site, your destination is enriched. The more content you drive and repeat visits, then ultimately the more ads you sell. Unique content also drives higher Google search rankings, and ultimately more business for you. Best of all? Your great domain drives highly targeted traffic to you without doing anything!
What do you think? Is it worth the investment of time to take a general domain already throwing off large amounts of cash to transform it into a destination? Please post in the comments.
The beauty of virtual real estate as opposed to physical real estate is that the numbers in the virtual world are cut and dry. You can run simple cost-benefit analyses to see if turning a domain into a site is worth it. Say you make $100 a month from adsense. You predict a $500 investment in development of a better site will double the revenue. I mean its arithmetic. If you get to the point where you have millions of domains and dollars to play with, you could get "virtual estate development" down to almost an exact science. It's probably the simplest, lowest risk business to be in ever. Probably a little late to enter now though. Does anyone else kick themselves for not doing this? I guess I just always thought that typing in domain names was on the way out. Bad call.
Posted by: Breck | June 24, 2006 at 11:38 PM
You're right, you can definitely build this into a model, and that's what it's all about. But imagine if there was more tweaking done to the content. I'm not talking about fringe type-in names that draw 5 people a month. I'm talking about primetime internet real estate.
Of course there are some risks such as .com's not being as popular, type-ins declining because of navigation alternatives (remember RealName from Bubble 1.0?) and so on, but so far that has not been a problem. Regardless, you can build that into your model.
The challenge is in driving user-generated content. It's not easy, but if figured out, those names suddenly become a lot more valuable for obvious reasons like driving traffic thanks to higher search rankings.
Posted by: Doug Sherrets | June 26, 2006 at 12:18 AM
Yeah no I mean I used the $500 to keep it simple. You could really devote a lot to some big time domain names and turn them into very profitable sites, then repeat. The thing I'm amazed at is that .com is still around. I always thought that eventually someone would create a solution smart enough to eliminate URL's almost completely. I guess that smart ones were the ones who recognized .com is here to stay.
Posted by: Breck | June 26, 2006 at 12:42 AM