by Domain Graduate Staff

As a new entrant in the domain investment industry, you’re likely to find more opportunity in development than in parking alone. Generic names are often sold at high yearly-revenue-multiples (YRMs) based upon PPC revenues, which places them out of the price range of most investors. While the first chapter of the domain industry has unfolded, keep in mind that you’re entering at a stage where there’s still a great opportunity to begin developing names and doing well with smart keyword research.

When selecting names beyond prime-generics, it’s important to be selective and come to understand the potential in a given market. As a first start, since we’re targeting search-engine traffic, you’ll want to check out WordTracker (FreeKeywords.Wordtracker.com) which provides ISP-level data on search query popularity. Make sure the root keyword(s) in your domain reflect a popular industry and have market demand. Let’s take an example of forming a solid-two word domain around the accounting industry – suppose we chose [Word]Taxes.com or Taxes[Word].com where [Word] reflects your choice of prefix or suffix (these can be verbs, e.g. FindTaxes.com, adjectives, e.g., BigTaxes.com, or nouns, e.g. CityTaxes.com.) Wordtracker tells us that the term “taxes” is search 2,679 times per day – this is a strong industry, as we would expect.

Now that we have verified there is market demand, you’ll want to see the monetization potential in the chosen vertical. There are two aspects to this question: advertiser prevalence and SEO-competition. Google provides us with two proxy metrics for each of these questions. To determine advertiser density (the number of PPC advertisers for a given keyword) we can check: http://www.google.com/search?adtest=on

This reveals there are 50+ advertisers on the term “taxes” – this is a green light. However, it’s also important to analyze the difficulty of ranking for such a term – so we analyze the title tag prevalence of the term (how often developed sites use the term “Taxes” in their meta title tag – a prime component of SEO targeting.) We search for intitle:”taxes” on Google to find nearly 2 million competitors for this prime generic term – chances are, when developing a new site we’ll have a tough time ranking for such a top-level term.

Taking the next step, it’s important to analyze the WordTracker data to find “long-tail” keyword that we can target – these will have fewer searches, but will be more directed in user intent, and will certainly have less competition. When choosing domains to begin development keep in mind that Google looks for quality keywords as well as domain age (ideally you want to purchase solid, aged domains at good values on the aftermarket, but when registering a new domain for development, register it for at least 2 years). In the next article we will hone in on how to begin targeting prime niches and choosing a platform for development that is cost and SEO-effective.

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• Should You Sell Your Domain Name? (2)

As the value of good generic names keeps increasing, there is very little reason to sell your domains names at this stage at the game. Yet, people do. You would do well to learn one thing concerning the domain name market very early: PATIENCE. If you are eager to spend money then there will be sharks salivating and lining up, happy to take it from you. The point is, that you don‘t want to spend money just to spend it, you need to make sure the buys you are making are quality buys.

However, if you do come to a time and place that you want to sell your domain, you need to keep a few things in mind.

If you are going to make a business out of domains and you are going to open your own company, you need to make enough to pay any taxes that may be incurred. This is a big area of debate and I’m not a tax expert, so consult your tax advisor.

You obviously need to make enough to cover the original purchase price, but you may also need to factor in other expenses such as renewal fees, how much PayPal, escrow fees (sedo or other escrow company) are going to take from you when you make the domain sale.

Can your domain names make more money if you wait a bit longer for a different person who may want this more? Is there a big enough market to where other people would be willing to buy this name so they had an “edge” on the competition? Or are you selling to a “reseller” (a person just as yourself who is buying the name to hold and resell later).

Is it really the “right” time to sell your domain, if you wait will the product/service/etc become more widely known or will the domain bring in more traffic? (E.g. HybridRVs.com).

Do you really even “need” to sell or do you just want to? You may need money for other ventures, but if you don‘t, then what is the point?

Is it an offer that you just cannot refuse?

I have had offers on domain names that I could not refuse before, it’s not common but it happens. I had just registered about 20 .us domain names and shortly thereafter a guy got a hold of me and offered $500 off the bat for one of them. Considering that I just registered the domain name, and the mere fact that the .us market has really not picked up, it was probably a good decision to sell. I sold him the domain for $500 total. That sale paid for the purchase of the other 19 .us‘s and also the renewal fee for them along with some money to spare.

In a case like the above, unless what you just registered is a true gem, there is probably no reason to decline the offer. But before you sell make sure a transaction will even be worth your time. If the same guy came to me and said he would have given me $40 for the domain name (and that would be as high as he would go), then there would have been very little reason for me to sell.

Remember, your time is worth money too. However, if you are a “time” person, then these are the types of sales you need to target and you need to target them over and over again until you reach a healthy base with domain name parking revenue. Once you become a “money” person, these types of things are not worth your time at all in the slightest. Remember, you want to become a money person as soon as possible.

So if you decide to keep your domain names or not which is completely up to you. Just be sure to make a well thought out decision.

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