Update on Domain Investing In My Back Yard

The other day I wrote about a domain investing company right down the road from me, here in Phoenix, Arizona. If you have not already read that story, please do so here. My business partners and I had plans to give DotVentures a call to discuss business and learn more about their company. We were also interested in possibly partnering with them to develop and/or sell our collection of 160+ domains.

Well, today, ironically enough, I received a phone call from Joel at DotVentures! He had read my blog and knew I was interested in their company. Joel proceeded to tell me a little about DotVentures, including about their $50 million inventory of domains and their plans to turn it into a billion dollar portfolio within a few years! As AnthonyC noted in my previous post, their company works kind of like a stock brokerage firm – you invest in domains they already own. Through this investment, they build an SEO-optimized website and proceed to split the advertising revenue with you 50/50.

This is an interesting business model. However, instead of investing directly in their domains, I am more interested in developing ours. Some of the domains in our collection receive a large amount of type-in traffic. We also own a premium collection of Internet marketing and iPhone-related domains. It is becoming clearer that the best way to make money in domain investing is to develop the domains into actual web sites, and then sell them after a few years. This way, your sites already have backlinks, are indexed by search engines, and most importantly, have a proven sustainable income stream.

Anyway, we are sitting down with the owners of DotVentures this Tuesday morning. It should be a very interesting meeting. These are people who have been in the domain investing business for 15 years. We are preparing a list of questions, and we will document the interview and let you how it goes. Let me know if there are any particular questions you would like us to ask these domain investing pro’s. We will definitely takes your questions into consideration.

Update – Joel at DotVentures has informed me that in fact, you do not split the monthly advertising revenue. The only profit split with DotVentures comes when the domain is sold after a few years. [See his comment below for reference.]

5 thoughts on “Update on Domain Investing In My Back Yard”

  1. Nate, I do appreciate all the hype. Yes this is a very big industry. Just wanted to inform you that when we build these sites for our investors we actually give our investors all the monthly revenue that the site throws off. We are 50/50 partners but this income is a perk for our investors and basically helps cover your investment (Leads to a very good ROI). It’s not that we are not intrested in this income it’s just a nice way to compliment our investors. What my company is intrested in is (when we help sell the site after a year or two) the profit, this what we split on a 50/50 partnership.

  2. This is very interesting,

    I’m beginning to think that conventional domain parking is dead and that revenue sharing schemes could eventually replace them and improve the quality of the net as a whole.

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