Those of you who read this blog regularly know that I was recently contacted by a Phoenix, Arizona-based company called DotVentures. I wrote about DotVentures a while back because I saw their commercial on MSNBC and was interested in their innovative way of developing and selling domains.
Last Tuesday morning, I, along with my two business partners, Matt and Josh, met with the president of Dot Ventures, Matthew O’Brien. Mr. O’Brien also owns a search marketing company fittingly called Searchmarketing, LLC.
DotVentures is one of the first companies I have seen that treats domain investing as a business. My business partners and I currently own around 160 domains. We started a company to help sell our domains called Dot Com Moguls. Naturally, we were interested in meeting with DotVentures to find out how they could help us market and possibly develop our large collection of domains. DotVentures is conveniently located only a few miles from us, here in Scottsdale, Arizona.
DotVentures is unlike traditional domain brokering firms, in that their main purpose is NOT to simply broker the sales of domains. Instead, they help domain investors create value in their domains by developing them into microsites which produce sustainable income and build traffic over time. A few years down the road, they assist in brokering the sale of these domains for a huge ROI.
DotVentures currently owns thousands of domains in a portfolio worth an estimated 50 million dollars. They anticipate their portfolio will be worth over 1 billion dollars in a few years. This is testament to the incredible growth domain investing will see over the next few years.
Although they are still in early stages of development, their primary company objective is to allow individuals to invest in their portfolio of domains they own. After a client makes an initial investment, their search marketing company, Searchmarketing, LLC build an SEO-optimized website using patented technologies designed to generate traffic and produce monthly income. The client keeps all of the monthly income from the domains. After a few years of generating sustainable traffic to the domain, they help broker the sale and split the profit with the client 50/50.
Shortcomings of Traditional Domain Parking and Web Development
Mr. O’Brien has been in the web development business for over 15 years. He has had a great deal of experience and made several key observations about its shortcomings and how it could be improved upon.
According to Mr. O’Brien, despite having a profitable development company, it is difficult to achieve large-scale growth when you are employing other web designers. You can only hire so many people to work on so many projects. Also, completing web sites from scratch can be a very time consuming process. The limited scaleability of web development companies is the reason we have not seen the emergence of any leading, large-sized development studios.
The other shortfall with the current state of the web development industry is in the concept of search marketing. When you build a web site from scratch, it has no back-linking and no page ranking. Generating consistent traffic takes many months if not years. This is also true for domain parking. It is very difficult to get Google to display high page rankings for parked domains.
To help better understand this concept, think about this metaphor: One does not buy a physical retail location because of its numerical address – 123 Park Lane does not mean anything. One buys a physical retail spot because of the amount of traffic it or its surrounding area receives. As Donald Trump says, “Location, location, location!”
Having the best domain in the world means nothing if you do not have any page ranking or traffic. Building traffic and page ranking is a very time-consuming process.
Opportunity to Improve Domain Parking and Web Development
The future of web development is no longer going to be about registering a domain name and building a web site from scratch. It is going to become the process of taking a preexisting domain name that already receives traffic and then turning it into a prime location for a business. Selling highly-trafficked domains will resuilt in a much higher ROI for the investor than developing a web site from scratch.
Searchmarketing and DotVentures are unlike any other web development companies out there right now. Searchmarketing has built several patented technologies which generate page content and a useful web site automatically. Think about taking a collection of parked domains, and instantly attaching unique content and an attractive design. This is similar to WhyPark’s service, but Searchmarketing promises a far more interactivity built into these domains. For example, imagine having an instant social-networking web site built into a parked domain. Now, when you properly SEO-optimize these sites, you have the potential to get much higher page rankings and an increase in return visitors.
Many people agree this is the direction web development is going in – instead of parking domains or building sites from scratch, web sites will be developed into vertically-marketed portals which provide far more value to the web than a parked page or a static web site.
I have read of similar ideas from only one other person, a man by the name of Richard Rosenblatt. Mr. Rosenblatt helped broker the deal of MySpace to Newscorp several months ago. He now owns a company called Demand Media which is reportedly working on similar technologies. It will be interesting how Mr. O’Brien and Mr. Rosenblatt’s companies change the worlds of web development and domain parking over the next year.
An Exciting Time is Upon Us
Over the next year, I am sure you will hear about DotVentures and Searchmarketing if you have not already. Like I mentioned earlier, DotVentures is already running commercials on MSNBC. Now is the perfect time to get into the business of domain investing. Mr. O’Brien also talked about working with domainers who already own a large collection of domains, like us.
My web development business, infinFX, will be working with Searchmarketing, LLC over the next year to develop a handful of our 160+ domains into profitable microsites. We are also in talks to possibly license their patented technologies to help increase traffic and pagerankings for some of our existing web sites. We will keep you updated over the next few months as our relationship with DotVentures, LLC and Search Marketing, LLC pans out.
It seems like domain parking will soon be a thing of the past. That means we could see a major improvement to the quality of the Internet over the next few years.
What do you think? Is domain parking and traditional web development going in the same direction as the dodo bird? Cast your vote in the new poll (see the sidebar, to the right).
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