Is that a "Splinternet" that I see?

By Duane Higgins, ceo
xtradot.com

I have written a few articles regarding the relative prospect of the development of various types of  "Splinternets" appearing over time. Especially in conjunction with the (in process) release of upwards of 1000 new top level domain name extensions.

Wikipedia.org defines the "Splinternet" as follows:

The splinternet (also referred to as cyberbalkanization or Internet Balkanization) is a characterization of the Internet as splintering and dividing due to various factors, such as technology, commerce, politics, nationalism, religion, and interests.

Some of my prior articles on this topic are here:

One Thousand Splinternets?

Is the Age of the (Just One) Internet Over?

Given my interest in this area, I wanted to post information from a press release  this week from the National Association of Realtors. What is most interesting is not that the .realtor domain name is being released. It is how they plan to use the domain name extensions. Essentially for members only. I am now wondering if this doesn't represent the first salvo across the bow of of the "old" Internet and into the world of "Splinternets?"

From a press release dated 08/18/2014 titled:

NAR Announces Launch of .REALTOR Top-Level Domain

WASHINGTON (August 18, 2014) –The National Association of Realtors®’ new .REALTOR top-level domain will be available October 23, 2014 to members of NAR and the Canadian Real Estate Association.

According to this press release: NAR will provide the first 500,000 members who register for a .REALTOR domain with a free one-year license, and CREA will provide 10,000 free domains to members on a first-come, first-serve basis.

The top-level domain will be made available only to real estate professionals who are Realtors®, members of NAR or CREA. The domain will also be made available to state and local Realtor® associations, association multiple listing services, affiliated institutes, societies and councils and NAR strategic business partners.

The National Association of Realtors® “The Voice for Real Estate®,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

By the way,  just for some more interesting reading. Here is a May 2014 Washington Times article regarding the real prospect of "Splinternets:"   

U.S. domain deregulation could fragment World Wide Web into "Splinternets."

Domain Name Merchandising and Pricing.

By Duane J. Higgins, ceo
xtradot.com

Want to put some muscle in your domain name portfolio? Want to increase the overall value of your domain name portfolio from 50 to 100% with very little effort? There is a domain merchandising and pricing strategy that very easy to use and if often overlooked.

Increase the prices.

I will give some more information on this strategy below (see "graduated domain name pricing"). However, first a bit of information on (domain name) product merchandising and pricing:

From Dictionary.com:

Merchandising:

noun

1.  the planning and promotion of sales by presenting a product to the right market at the proper time, by carrying out organized, skillful advertising, using attractive displays, etc.

Now information on pricing a product from entrepreneur.com:

Pricing a Product:

Definition: To establish a selling price for a product. According this this definition:

No matter what type of product you sell, the price you charge your customers or clients will have a direct effect on the success of your business. Though pricing strategies can be complex, the basic rules of pricing are straightforward:

• All prices must cover costs and profits.
• The most effective way to lower prices is to lower costs.
• Review prices frequently to assure that they reflect the dynamics of cost, market demand, response to the competition, and profit objectives.
• Prices must be established to assure sales.

Comparable sales are a great place to start when considering how to price your domain names. I addition here are some factors below that I found on a nifty site called DNSalePrice.com:

Valuation factors to consider when researching comparable sales include:

Empirical: TLD (top level domain) Length Words (number of) Numbers Hyphens Misspelling

Soft: Commercial potential Brandability Memorable and pronounceable Ease and ambiguity of spelling Search engine potential (page rank)

Hidden (i.e. requires additional info): Site content Current traffic Source of traffic Current Revenue PPC rates

But of course, the fact is that a given domain name is worth whatever someone is willing to pay for it. That story will never change.

Here are some real (head scratching) examples of the beauty (of the domain name) being in the eye of the beholder:

For example, did you know that the domain name ireport.com sold for $750,000 in 2008?  Check the record.  What would this domain name get on the open market today? I would guess between 15 and 25,000 at the most. That's quite a difference from the 2008 sale price. Beauty certainly is in the eye of the beholder.

Or another example. The domain name Flowers.mobi was once sold for $200,000 at auction. It was sold a few years later for under $10,000 at another auction. Two different times. Two totally different valuations.

So we do generally employ what I call "graduated domain name pricing" strategy.

The objective is to increase the overall sales prices, profits and the value of the domain name portfolio?


Once we set our initial pricing (even if most of it is internal) we do gradually increase the price for  a given domain name over time. Almost without exception.


There are several reasons that we do this:

1.) Domain  names are a commodities that have historically increased in value over time just like most commodities. One of our objectives is to support that process of maintaining domain name values. Not to reverse it.

2.) We find that many of our domain names get multiple bids by the same buyers over time. One of the ways we protect against that with our assets is to increase the prices over time. The buyers catch on to that practice and if they are serious about the purchase this negotiation tactic gets their attention. Sometimes it does lead to missed sales (at the lower price) and sometimes it leads to sales at a much higher price. Maybe even by a different buyer. This process protects the prices of the domain name assets as well.

This technique can also be effective when soliciting offers to potentially interested parties. For example, if you offer the domain name to a party with a buy price of  $5000. That is your starting point. It is often helpful for the buyer to clarify the offer to let them  know that the name wont be offered for that price again. At least, not from you. If the party is not interested, that is fine. Nothing lost. You both move on. This strategy is helpful for the buyer and the seller with what I call discounted pricing. When I make offers at this level and there are no buyers I generally will double the price.

The graduated domain name pricing is certainly a sales tactic. Just as when any merchant would dramatically reduce the price to a discounted level. With the buyer and seller understanding that prices wont stay that low and will return to a much higher price.

The strategy generally does result in holding domain names for much longer than you originally planned and you need to be prepared for that. Say you start a domain name price at $5000 and it doesn't sell. You increase the price to $10,000 and it doesn't sell. You then increase the price to $20,000 and it does sell. What did this process accomplish?

Two major things:

1.) Supports the domain aftermarket and maintains domain name values.

2.) Helps to maintain and enhance the value of your domain name portfolio.

 
Before you sell a domain name you may consider a quote by famed motivational speaker/author Tony Robbins who once (famously) said that "Everything you do is a cause set in motion."

Selling a particular domain name may seem like a simple little transaction that is relatively easy to do. However, there could be longer term ramifications to your sale that aren't initially apparent.

That being said, holding onto a domain name and spurning some offers is not always easy to do. It is comforting (and sometimes necessary) to take the quick money and perhaps let a domain name go for much less than what it is likely worth on the open market over time. That is ok too.

So how do you determine what a given domain name could be worth in the open market. There is one answer to that question that is the best one that you will find.

Hold on to it and you will eventually find out. Just be prepared that it may sometimes take years to sell a particular domain name.

I would suggest my "graduated domain name pricing" strategy if you want to give that a try. Pricing an merchandising strategists will tell you that sometimes the higher price point is better and even more likely to lead to a sale.

The Domain Market Economy.

By Duane J. Higgins, ceo
xtradot.com

I have written extensively in this column regarding the relative prospects of the success of the (upwards) of 1000 new domain name extensions. Many new domain name extensions have been introduced and many more are yet to be introduced. We now have .buzz, .events, .guru and .loans and soon we will see .web, .shop and .app and many, many more.

Who will be the winners and losers of the new domain name extensions in the end?  Well the answer is that only the free markets of the market economy will decide. 

Here is a great definition of the "Free Market" from Wikipedia.org:


A free market is a market system in which the prices for goods and services are set freely by consent between sellers and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. A free market contrasts with a controlled market or regulated market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or directly setting prices.

Also regarding the "Market Economy" from Wikipedia.org:

A Market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand,^[1] and prices of goods and services are determined in a free price system.^[2] The major defining characteristic of a market economy is that decisions on investment and the allocation of producer goods are mainly made through markets.^[3] This is contrasted with a planned economy, where investment and production decisions are embodied in a plan of production.

Why do I take the time to post what are generally well known definitions of well known market dynamics?

The answer is that because the winners and losers of the new domain name extensions will be chosen just like any other free market venture. Through the free market economy.

In my previous column titled One Thousand Splinternets,  I speculated regarding an imaginary conversation taking place around the water cooler say 10 years from now. The point of the exercise was to demonstrate some of the inherent potential of  just a very few of the new 1000 domain name extensions that are flooding the marketplace as we speak.

From this column:


Imagine if you will the following conversation taking place between three friends at the water cooler in say 10 years from now:

Mary: I haven't heard anything from Steve in a while. Someone told me that he's spending all of his time on .web. You know, the Google owned Splinternet that offers free domain names and free websites. Apparently nearly everything is free there. Free and easy. Just like the 1960's. No wonder Steve likes it there. He never grew out of the sixties and I guess he met a girl on .web. I wouldn't take much of anything seriously that goes on there though.You get what you pay for right?
 
Joe:  I know what your saying. For me I've been using .secure for almost everything. With the encryptions and extra security measures that they take with all of the sites there. I've been thinking that I may just do everything there. That domain is growing so rapidly they say once you try it you wont use anything else.  However, I do use .bank for all of my banking and financial stuff. I do like that too. My wife likes .books, .music and .apps. I'm not really interested. However, they say the apps at .secure are like Fort Knox as far as security goes. So I use some of them.
 
Johnny: All I can say is thank God for .com. With all of these splinternets and new domain name extensions popping up like candy I think we could all go crazy if it weren't for the old standby .com. Dot com is still the standard bearer of everything that is on the Internet. Good, bad and indifferent. Dot com keeps taking these pot shots from the new domain extensions and keeps coming back stronger than ever. I'll take .com anyday and that is all that I need. I has everything that I need and everything that I don't need and sometimes sample if you know what I mean.
 
Mary: I'm with you on .com however I do have a confession to make. I probably spend 80% of my time on .shop. The way that they have integrated all of the shops and malls there the last I heard they had 100,000 stores and counting. Their top stores are apparently JC Penny and Best Buy. Who would have guessed that?  They also have this really  neat point system where you get points for buying at any shop there. The savings are unbelievable.  I heard on the news the other day that .shop was projected to overtake Amazon in overall sales by 2025. Wouldn't that be something. They have alot more than shopping as well. Just about anything related to it.
 
Joe: My nephew tried to get on the Chinese Splinternet just for the fun of it. Then he found out that it's all in Chinese and you need permission from the Chinese Government or or something like that. I guess its bigger than all of the other Internets added together. Too bad its so isolated.
 
Mary: Well back to work for me. Just between the three of us I may be taking a job with the .shop homeworker program. With their direct selling and network marketing programs, I earn points from everyone that I recruit as well. I can cash out the points for a discount and I am making more money there than I do here.
 
Johnny: Good for you Mary.
 
Joe: Maybe I can get a job with .secure.