Coase Theorem & Domains

Yesterday, Dominik provided a basic economic analysis of the supply and demand of domain names. Then today Steve Levitt of Freakonomics made a post about the Coase Theorem and Domain Names. I’m very interested in economics, so I’m going to offer some economic analysis of domain names. If economics bores you, well, consider reading some of my other posts, which are a lot more practical.

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Sedo Christmas Auction – Great PR, No Sales

I was watching the Sedo Christmas and New Year auction with interest. The auction offered several prime generic .co.uk holiday domains. These kind of names have special interest and value – see Jay’s post where he talks about ThanksGiving.com, BlackFriday.com and CyberMonday.com. Unfortunately, the sale seems to have been mostly a PR stunt, with no sales. The lack of sales is probably due to high reserves for the domains, although the bidding also does seem on the low side for several of the names.

Here are the results of the auction:

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Legal Tips for Domainers

Via Elliot’s interview with Brett Lewis I found this useful article that provides practical tips for protecting your domain names. Well worth reading the entire article. The points it covers are:

Rule 1. Register dictionary words and fanciful terms that you make up.

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Elliot’s Blog

Elliot has just written an excellent post full of useful information for domainers and well worth reading. In his post, he provides domain speculation pointers. Elliot provides some great tips for finding unregistered domains that are worth more than reg fee.

While a lot of people state that all the best names are gone already, certainly there are a lot of decent names that haven’t yet been registered. I think that, especially for domainers new to the field or on low budgets, hunting for these types of names is worthwhile. As Elliot points out, these are somewhat speculative investments. However, if you figure out how to do this well, even if you only sell a few of the many you register, you can still make some good money.

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.Mobi – A Tower of Cards Waiting to Fall

One of the main stories circling that domainersphere right now is Rick’s explanation of the real story behind the flowers.mobi purchase. In his blog post, Rick gives some excellent pointers about investing in domains and then shows how his purchase of flowers.mobi, and investments in (quality) .mobi domains in general, meet these criteria. But is investing in .mobi wise? Or is it simply a tower of cards waiting to fall?

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Moniker’s Live Auction Flops

I spent the afternoon (I’m on the East Coast) watching the video feed of Moniker’s Live Auction at the Geo Domain conference. Unfortunately, the auction was a big flop. While there may be last minute adjustments, at the close of the video feed, the total value of the domains sold was $435,000. $200,000 of that came from just one sale – Perth.com. None of the most publicized domains, like Wallstreet.com sold.

The auctioneer, who did a great job under the obviously difficult circumstances, was practically begging people to bid at some points. It was clear that he was very uncomfortable with the whole situation. The auction was scheduled to last 5 hours and barely went over 2 hours.

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What All Domainers Ought to Know About Overture

If there is one tool you will be using a lot as a domainer, it’s the Overture tool, found here.

What is an Overture Score?

To help pay per click advertisers choose appropriate terms to bid on, the Yahoo! network keeps track of all of the keywords that were searched on their network, and how often they are searched. They make this data publicly available on the Overture tool. This tool allows you to input a keyword and then outputs how often in a previous month that keyword and similar keywords were searched. The number of times the keyword was searched is known as the “Overture score.” So, for instance, if today you search the Overture tool for the keyword “widget,” it will tell you that this keyword was searched 20,455 times in a previous month.

You will sometimes hear the term “Overture with extension.” This means that the full domain name, including the extension, was searched for on the Overture network. So, for instance, if today you search the Overture tool for the keyword “ebay.com,” it will tell you that this keyword was searched 2,849,826 times in a previous month.

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Registering New Domains for Profit

A wonderful video released today by 45n5.com about making lots of money just from registering domains. I think that, if done intelligently, you could double your money in a year (emphasis on making sure you know what you’re doing first). Here’s the video:

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Genericide and Velcro

The World Intellectual Property Organization (WIPO) has just released the Velcro Industries B.V., Velcro USA Inc. v. Chung, Mitch decision (the “Velcro” decision). In the case, the administrative panel decided that the domain velcro.biz must be transferred to Velcro Industries.

The Arguments Made

The main argument that the respondent made was that the admittedly trademarked term “Velcro” has fallen into such common use as to become a generic term (a process known popularly as genericide). As the term was a generic one, he was permitted to register the domain. In particular, the responded argued: “‘velcro’ is a name of specific product, a commonly used term, as well as a trademark.”

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The Lazy Domainer’s Way to Fail

I thought I’d start a “smackdown” category of my blog where I refute a lot of the nonsense that’s out there about domaining. I’m somewhat scared to do this, as there is so much nonsense out there, that I could spend all of my time just adding entries to this category. However, I think that it’s worth at least refuting a few of these articles, just so that people know that there is another side to the story.

Today I read the article “Stay Away From Domain Name Speculation” at http://seanabc.blogs.ie/2007/11/03/stay-away-from-domain-name-speculation/. In this article, basically the author, even though he admits “I never got involved in domaining” does not hesitate to give advice about domaining. Oh, I never went to medical school, let me give you some medical advice. Not.

The author makes 5 fundamental errors, which all domainers would do well to avoid:

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Introduce Yourself!

One goal I have in blogging is just to get to know other people who are domainers, so that we can share ideas and thoughts about the industry.

However, the funny thing about blogging is that you don’t know who is reading your blog! So, to change that, please take a moment and add a comment telling me who you are, what you do and anything else about yourself.

 

 

Welcome to Domain Bits!

Inspired by Sahar’s post that every domain owner sould seriously consider blogging, I’ve started Domain Bits. The goal of my blog is to help people learn about domaining and make wise investment decisions that will pay off handsomely. For some people, this will mean quitting their jobs and living off of domaining; for other people, this may simply mean just taking that extra vacation every year to exotic locations that they have always wanted to go to.

Now that the domain industry is starting to mature, I think that it’s very important that people, especially people just starting out, have as many resources as possible to educate themselves so that they can maximize their chances of success and profit in the industry. This blog is my contribution. I’ll give some of my opinions, help you stay up to date with the latest news, and occasionally write more in-depth articles with extensive research.

I hope that you enjoy this blog and please feel free to leave a comment. You can subscribe to my feed or have the posts conveniently delivered to your inbox by email by signing up with the subscription form on the right-hand side.