Our Meeting with a Domain Investing Mogul: Domain Parking Is Dead

Our Meeting with a Domain Investing Mogul

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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23 thoughts on “Our Meeting with a Domain Investing Mogul: Domain Parking Is Dead”

  1. Excellent article – this must be one of your longer articles. Please continue to cover the development of the domain investing business. Now will you be able to get an interview with Richard Rosenthal?

  2. Fascinating article, i remember reading about Rosenthal in an issue of INC magazine a couple of months ago, I’ll be fascinated to see how this domain traffic thing pans out, but I think you’re right about Location, Location, Location! Great job!

  3. It’s scary to think that the domain investment industry is still growing. Pretty exciting times, all in all!

    I’ll be following how your relationship develops over the months, it’s very interesting.

  4. This sounds more like a press release than an interview. How many web developers do they employ? How do they go about generating content? How long does it take for them to launch a microsite from inception to launch? Examples of some of their work?

  5. Definitely a good article…I have about 90 niche sites right now with 5-15 pages each…it is tedious to write unique content then try to promote all of them…i need a team of at least 10 to keep up πŸ™‚

  6. Great piece and congrats on creating those partnerships Nate.

    I have a question for you, we are based in California but are looking to get LLC’ed. Any recommendations as to where to get LLC’ed. I keep hearing we might have to do it in California because some of our income will be coming from Google, which is based in California. I’m not looking forward to paying the $800 in taxes with CA. I would like to do Nevada, but don’t want to still pay CA tax. Any suggestions?

    1. Hi Jane. Here is the web site we used to get our LLC: IncFile. As far as avoiding the CA taxes, I am not sure if that’s possible if you are based in California. Where in California are you located? I am going to move to San Diego in the next year.

      1. I’m currently in LA. But I will be relocating to San Francisco this summer. I’ll still be working on CR and a couple of other sites. What’s taking you to San Diego?

  7. I think that domain parking is going to change. Obviously it will evolve with technology but I have my doubts as to how useful these guys can make a site that is auto-generated.

  8. You are right but so wrong. Yes companies want to buy and biuld around a high traffic Macdonalds type ste . But we warriors are starting to outsource our new site specs to India were they are made fast and cheap. Than we collaborate with partners to drive traffic to the new slick site. Volia.

  9. I know I’m late to the party, but I must say that I love the analogy to the 123 Pine Street brick and mortar shops. I’d love to see domain parking become less prevalent on the net, if only because I hate typing in an address of a site I’d like to develop only to see it’s taken and I have to keep thinking before I get to one that’s not developed πŸ™‚ In this day and age, a domain name isn’t the most important thing ever. It’s not even in the top 10. Digg and Flickr alone have shown that misspelled names or simply weird ones are A-ok with people as long as the site itself is useful and it works.

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