Online Business Management
The following are articles related to Online business management from the
archives of Website Magazine. These articles are ordered by the date they appear
in the print edition of Website Magazine (the last article in this list is the
most recent). For daily coverage of all things Web related including online
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Daily Blog.
Articles on Web Business Management From the
February 2007 Issue of Website Magazine-
Pinpointing Search Performance with Analytics : A major benefit of
search marketing is its accountability through campaign performance
tracking. The returns on precise measurement can be significant when it
comes to campaign performance. For instance, you can track competitor search
performance to understand how to leverage their strengths and weaknesses to
your own advantage.
-
Capitalize on Your Data with Predictive Analytics : Attracting and
retaining customers is the primary goal of any business, be it a major
corporation or a small, at home enterprise. One of the advantages of
Web-based business is the availability of key data from which to measure
performance. There exists one of these processes that can analyze buyers’
profiles, allowing marketers and managers to predict consumer preferences on
an individual basis. It’s called Predictive Analytics.
-
Legal-Ease: Domain Name Rights : Website Magazine asks Jeffrey Cohen
(see bio below) some common questions about Cybersquatting and domain name
rights to help clear up the often murky waters of Internet law.
Website Magazine on Web Business Management - November 2007
Website Magazine on Web Business Management - August 2007
Web Business Management Articles From Previous Issues of Website Magazine
Attracting and retaining customers is the primary goal of any business, be it
a major corporation or a small, at home enterprise. One of the advantages of
Web-based business is the availability of key data from which to measure
performance.
There exists one of these processes that can analyze buyers’ profiles, allowing
marketers and managers to predict consumer preferences on an individual basis.
It’s called Predictive Analytics.
What makes Predictive Analytics unique is that it enables companies to customize
a marketing and retention campaign message for each customer. Predictive
Analytics is the only type of analytics that produces predictive scores for each
customer.
Businesses and Customers benefit by:
- Determining they types of items or services customers are likely to purchase
next, or which customers are likely to migrate elsewhere
- Churn is reduced and customer satisfaction is increased
- Products and services are delivered that meet the exact needs of the client
For a more in-depth review, I interviewed a specialist on the topic. Dr. Eric
Siegel is a former computer science professor at Columbia University and the
President of Prediction Impact, a Predictive Analytics consulting and training
company based in San Francisco, CA.
What is Predictive Analytics and what does it accomplish?
Predictive Analytics is business intelligence technology that produces
predictive scores for each individual customer or prospect. What you need to do
before employing Predictive Analytics is first decide which customer behavior
will be most valuable to predict – such as predicting which customer is most
likely to respond to an offer or which customer is most likely to cancel their
subscription. And the next thing you need to do is prepare the data. Your data,
which is essentially your organization’s collective experience, is leveraged by
predictive analytics to produce predictive models, and in so doing you’re
actually learning from experience.
What kind of investment in infrastructure required?
Well, you can start with a pilot initiative for very little, in the way of
hardware and software requirements. And this is also a place to start – to
achieve a proof-of-principle, demonstrating what kind of return-on-investment
can be achieved, such as improved customer retention or increased profitability
of a campaign. In this case, the core predictive modeling can usually be done
with free evaluation software licenses or with a free open-source tool.
Having said that, it’s important to note that you do need expertise in
Predictive Analytics – by way of internal resources, employing professional
services or both. This expertise is needed to optimally position the technology
in order to determine the kind of behavior that’s going to be most valuable to
predict on the business side. More technically, what data is required to achieve
that prediction goal, and how do you prepare the existing data so that the
resulting predictions you end up getting will be accurate and
business-actionable? And then you apply what’s learned by way of directing,
let’s say, a retention campaign. Or, selecting targeted content on a
per-customer basis based on what product or message each customer is most likely
to respond.
How do companies benefit?
The business case for a Predictive Analytics initiative is clear. Knowing which
customers are worth targeting for a specified offer is about as actionable as
business intelligence can get.
To be more specific, let’s say we generate scores to predict the risk each
customer has of canceling or defecting from a subscription-based service.
Targeted customer retention has impacts on such businesses — such as ISPs,
magazine subscriptions, online dating … you name it.
Retention offers - say discounts - are usually expensive. You can’t extend the
offer to all subscribers. The only way to target a retention campaign precisely
where it’s needed is with predictive scores that earmark which customers are
most likely to leave. When you follow these predictions, you don’t expend the
cost of the offer on customers that don’t need it. So, the campaign ROI is much
better, growth rates improve and bottom-line profit increases.
In general, with Predictive Analytics each customer’s predictive score informs
actions to be taken with that customer. You just can’t get more actionable than
that.
About the Author: Bill Cullifer is an Executive Director and
Founder of the non-profit professional association World Organization of
Webmasters (WOW). Learn more at
www.webprofessionals.org. For in depth interviews, case studies and more
visit www.predictiveanalytics.org.
By Paul J. Bruemmer
A major benefit of search marketing is its accountability through campaign
performance tracking. The returns on precise measurement can be significant when
it comes to campaign performance. For instance, you can track competitor search
performance to understand how to leverage their strengths and weaknesses to your own advantage.
But first, let’s describe Search and Analytics to bring new readers up to speed.
Then we’ll dive into the advanced aspects of intuitive analytics reporting by
interviewing a leading Web analytics consultant to answer the complex questions
about why traffic changed, rather than simply looking at what changes occurred.
Paid and Natural Search Synergy
Internet search engines like Google, Yahoo!, MSN and Ask provide advertisers
with similar opportunities on the Web. Natural search, as it implies, occurs
naturally as determined by search engine rules and mathematical formulas. Paid
search, on the other hand, is advertising. It is generally displayed as groups
of sponsored listings at the top and side bars, labeled as such and paid for by
advertisers.
Too often, marketers are overly focused on paid search results. After all, when
you’re spending money you want to see a measurable return. But even from a quick
glance at the above graphic, it is clear that implementing both natural and paid
search campaigns will empower you to more successfully gain traffic, brand your
website to users and accomplish your interactive business goals. Paid search
advertising is effective for increasing immediate traffic volume to a website,
while natural search is essential for your long-term presence in the search
engine results pages (SERPs).
Analytics Tools
Search, both natural and paid, has become a significant driver of traffic for
most websites. But as organizations and people invest more money and resources
in search marketing, there is a corresponding demand to prove the investment is
working. That’s where measurement becomes essential.
As groups of advertisers engage with search engines, analytics tools can perform
a quick analysis of core keywords in your industry – revealing those terms
important to your search strategy, while also enabling you to actively research
competitor paid-search advertising trends and statistics in that industry. These
tools can track and trend natural search results as well, modeling and
predicting the benefits.
When you measure search performance, your Web reporting tools typically provide
you with quite a bit of information right out of the box. You’ll be able to see
how much traffic your site received from each search engine. You’ll even be able
to see what search terms visitors used to view the paid or natural listing that
led to your site.
Tracking Natural and Paid Search
To dig deeper into how this process works, I went to Semphonic President and
Chief Technical Officer Gary Angel to ask a few questions.
Where is a good place to get started measuring search performance?
With just a little bit of extra setup work (adding some distinct campaign code
to your PPC URLs) you can learn the all-important split between natural and paid
traffic. If you don’t do that work, you’ll see all your traffic as natural – and
you’ll be unable to effectively compare the two. So that’s an important first
step.
What are repeat click-throughs and what does it say about your visitors?
Repeat click-throughs to your site can appear in two very different ways. Most
click-throughs will trigger a new visit, also called a session. But sometimes
visitors will click through to your site, go back to the search engine, and then
click again on the same or even a different search query. You might be surprised
how often that happens. Used correctly, your Web analytics tools can help you
understand how many repeat visitors came to your site.
Not all traffic is created equal, and search traffic is likely to vary in
quality by channel (natural or paid), search engine and keyword.
How diverse is the performance between natural and paid search?
Natural and paid visitors on identical search terms often perform differently
because paid programs invest resources to create a custom landing page for top
performance. Whereas with natural search, the page is “selected” by the search
engine. So the difference is in controlling the landing environment. The entry
page makes a big difference in performance and can be a reason for using PPC
even when your natural positioning is excellent. Sometimes, your natural landing
page works better, and that can be embarrassing on the paid side, but it’s
easily fixed.
I’m one who believes most search marketers are overly infatuated with paid
Search and continue to underestimate the power behind natural search. Based on
user response, I’ve consistently seen SEO outperform PPC for the simple reason
that unpaid natural results satisfy user intent on a personal, non-advertorial
level. This user characteristic, within various website categories has built
loyalty, trust and repeat customers without controlling the landing environment.
Would you agree another reason for the variability in performance is the fact
that visitors who click on natural vs. paid listings can be from distinct
populations?
That’s right, some search users simply don’t use paid listings – and this
audience segment may perform differently than others. Visitors might also use
natural or PPC listings depending on where they are in the buying cycle -
information gathering, active shopping, buying, etc. At times, it may appear
that natural search visitors perform less effectively than paid visitors or
vice-versa, whereas it’s really a case of visitors simply being in different
phases of the buying cycle.
When this happens, many of your campaign tracking tools will attribute sales
only to the most recent campaign (and often lose visibility after 30 days). One
of the benefits of using a Web analytics tool to segment your search traffic is
the ability to get a better understanding of how your natural traffic performs
over longer periods of time.
Do automated solutions help in understanding the varied metrics?
Yes, automated reporting can help you solve this dilemma. To get quality
automated reporting, it isn’t enough to simply dump lots of data into a
spreadsheet and distribute it to everyone in the organization. Not only will
most people be unable to find the data they need to understand how search
impacted traffic, they probably will misinterpret a good chunk of the data they
find.
When this happens, it might be beneficial to hire a Web analytics consultant to
provide easy answers to the questions posed by colleagues in different
departments. Such firms have developed specific approaches to help you answer
the difficult questions without taxing your time schedule.
Gary, what’s your approach?
Semphonic starts with the construction of an analytic model of your traffic,
incorporating that model into your reporting. Figure 1.2 is a sample of a report
based on this method. This report is created by dumping all of the relevant
sourcing and site performance data from three monthly periods into Excel. An
Excel VBA script then processes the data and, using the analytic model,
automatically identifies the key factors driving traffic impacts.
Open in New Window
As search programs grow ever larger and more sophisticated, what is the
advantage of accurately understanding and reporting the impact of search
campaigns on overall business performance?
As you can see from the example above, key factors are clearly identified for
all decision-makers with analytics modeling. The model even tells the
decision-makers how much change each factor is responsible for. This type of
reporting answers many questions before they are even asked. And unlike
traditional reporting, it helps protect the decision-maker from misusing the
data or misreading the impact of irrelevant or non-causal factors.
The Benefits of Automated Reporting
The returns on precise measurement and analysis can be significant with
analytics modeling. You can better understand how to allocate your resources,
how to improve performance of individual programs and how to explain the impact
of your marketing programs to everyone in your organization. Automated reporting
is one way to help you and your colleagues understand the impact of search
marketing programs on your overall site performance. For more information about
Semphonic and their automated reporting solutions, visit www.SEMphonic.com.
__________________________________________
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Website Magazine asks Jeffrey Cohen (see bio below) some common
questions about Cybersquatting and domain name rights to help clear up
the often murky waters of Internet law. |
I own a domain name that someone is claiming I have to give up because they have a business with the same name. Do they have legal rights to my domain?Business names are not necessarily the same as Trademarks. Generally, domain name rights follow trademark rights under the UDRP. Simply registering a domain name gives you no rights of any kind by itself. Furthermore, a business may or may not have a registered trademark in its company name. Generally, a business by the same name as your domain name by itself is not enough to force you to give up a domain. But there is much more to the analysis.
In part, the analysis includes some consideration of how the domain name is used. Under the UDRP, in order to prevail, the complainant must establish that you have registered or used the domain name in “bad faith.” For example:
- Registering or acquiring a domain name for the purpose of selling,
renting or otherwise transferring the domain name registration to the
complainant who is the owner of the trademark or service mark or to a
competitor of that complainant, for valuable consideration in excess of
your documented out-of-pocket costs directly related to the domain
name; or
- Attempting to prevent the owner of the trademark or service mark from
reflecting the mark in a corresponding domain name, provided that you
have engaged in a pattern of such conduct; or
- Registering the domain name for the primary purpose of disrupting the business of a competitor; or
- Intentionally attempting to attract, for commercial gain, Internet
users to your website or other online location by creating a likelihood
of confusion with the complainant's mark as to the source, sponsorship,
affiliation, or endorsement of your website or of a product or service
on your website.
The analysis is not always straightforward. In the face of a claim consultation with legal counsel familiar with the UDRP and the Internet is strongly recommended.
I have formed a company (LLC or corporation) but someone else own the domain of the same name. Do I have any legal rights to the name?It depends. If the domain owner has used the name in commerce and registered the name (Mark) with the United States Patent and Trademark Office (USPTO), your coming along and forming a company with the same name will not be sufficient. Furthermore, by doing that without checking first, you are likely in violation of the rights of the Trademark owner and may likely receive a letter along the way demanding that you stop using the name.
It is always important to consider intellectual property rights before selecting a domain name or a company name?Once you have registered a trademark with the USPTO — whether it is your domain name, your company name or both, you have two ways to protect your mark if someone comes along and registers a domain name that is identical or confusingly similar:
- Proceed into Federal Court by filing a complaint alleging the
appropriate violations of Federal law to recover the domain name and
monetary or other damages.
- File a UDRP claim to recover the domain name only. Depending upon the
exact circumstances either option may be more appropriate than the
other.
What is Cybersquatting and how do I know I am not in violation of any laws when I purchase a domain? The Anticybersquatting Consumer Protection Act (ACPA), provides against Registering or Using an “Internet domain name or other identifier of an online location that is;
- The trademark of a person or entity other than the person or entity registering or using the identifier; or
- Sufficiently similar to a trademark of a person or entity other than
the person or entity registering or using the identifier as to be
likely to –
- cause confusion or mistake;
- deceive; or
- cause dilution of the distinctive quality of a famous trademark."
Keep in mind that the ACPA is only one Federal Act out of numerous State and Federal Laws that prevent various actions with respect to the registration and use of domain names in conjunction with US Trademark law. Before making a substantial investment into any domain name or, for that matter any business name, a thorough search of the prior use of that name or mark should be conducted.
I own mysite.com, but someone else owns mysite.net. What are my options? Most domain names are registered and quite a few co-exist with one company owning one top-level domain (TLD) and another company owning another without difficulty. Where the two companies are competitors, this can be problematic and can lead to confusion or dilution of the mark.
Registering a domain name in and of itself will not necessarily be sufficient to establish any trademark right. However, when you offer products or services and use a mark to distinguish your products or services from those of your competitors, then you may likely be entitled to secure registration in the United States. Once registered you should be able to prevent someone else from using the mark for the sale of similar goods or services and may well be entitled to force them to turn over the domain name, either via Federal Court action or UDRP action.
Absent some right, your efforts could be considered to be nothing more than reverse domain name hijacking.
What steps can be taken to prevent others from squatting on variations, misspellings, etc?- Register your Trademarks
- Register any obvious typo names to avoid any disputes.
- Consider various trademark watch services to protect valuable
trade-marks. (They notify you upon the registration of any similar
name.)
- Enforce your Trademarks on and off line.
- Retain the services of Internet Savvy Trademark counsel to recover any
domain name registrations in violation of your rights. Act quickly upon
discovery of any such violation.
Jeffrey A. Cohen Esq. is a Partner in the law offices of Chapman, Glucksman & Dean a.p.c. in Los Angeles. He chairs the firm’s Internet & Technology Practice Group and represents Internet companies Worldwide on all Internet business law issues. He is also the director of InternetLitigators.com which is a unique on-line information outlet for Internet businesses which has a unique client membership program. The information contained herein neither constitutes legal advice nor creates an attorney client privilege with the reader. You should not act or refrain from acting based upon this article. Mr. Cohen can be reached at jcohen@InternetLitigators.com.
Who They are and What they Want to Hear__________________________________________
By Jim Butz
|
In 2006, the US
Small Business Administration (SBA) estimated about 650,000 new
businesses were created. But just a fraction of those were supported by
financial backers. Angels invested in 51,000 new businesses while
Venture Capitalists made about 1,170 early stage investments. That means
only eight percent received Angel or VC funding. While it’s safe to
assume that not all of the startups looked for funding, it’s clear that
the competition for backing is significant.
You might have a great idea for a new business, but to really get it off
the ground you may decide that you’re going to need some financial help.
Essentially you now become a salesperson and the potential investor is
your customer. And as any successful salesperson will tell you, it’s
wise to get to know your customers. If you’re thinking about seeking
investment, find out everything you can about your potential investors
and what’s important to them. |
While there are many investment sources, this article focuses on Angels (usually privately wealthy benefactors, friends or family) and Venture Capitalists (corporations whose business is to identify and invest in startups). If you decide to look at other alternatives beyond friends and family — such as banks, the government or corporate strategic investors, you’ll go through the same process.
When talking with investors, keep in mind, that they’re always listening for “WIFM” (What’s in it For Me). They want to hear facts, figures and strategies from entrepreneurs who signal mega potential — that means deals they believe will produce five to ten times return on their investment in three to five years. Investors hope that, every so often, one deal explodes and returns 30 times return or higher — think the next YouTube. Knowing what money they invest and how they get paid will help you understand some of the questions and processes each use.
Angel or VC?Depending on how much funding your idea requires will largely determine what type of investor you need. Angels do investments up to about $1.5 million, while VCs, on the other hand, usually start at about $5 million. So, if your needs are between $2 and $4 million, you are starting out in trouble. You should either think about how to start with less funding or pumping up the opportunity to justify an investment of $5 million or more.
How Investments and Payments DifferGenerally, Angels are high net worth individuals and successful business people who invest their own money. Most have put aside assets for early stage investments. According to a June 2007 Wall Street Journal article, “How the Rich Invest,” people with a net worth of greater than $20 million, invest about 39 percent of that in startups. So, even though the total amount of funds may seem substantial, they are somewhat fixed and, once funds are placed, have to be returned before new investments can be made. These funds, plus any profits, are available for other investments.
Unlike Angels, Venture Capitalists invest other people’s money acquired when they put their fund together. Although they receive a small management fee, they make their real money on so-called Carried Interest.
The best way to describe Carried Interest is by example. Let’s say that a VC makes a $5 million investment in a startup which, at the time of liquidity event, or exit, brings a $50 million return. The VCs return $5 million to the fund itself and then split the remaining $45 million (Carried Interest) between themselves and their Limited Partners based on the terms of the fund. If the terms were 70/30, then the VCs would get 30 percent (or $13.5 million) and the Limited Partners would get the remaining $31.5 million. This should give you an idea why VCs are very interested in hearing about Exit Strategies.
The two positive exits are merger/acquisition (M&A) and Initial Public Offering (IPO). VCs used to look for companies that could generate sufficient revenues to justify an IPO. However, restrictions associated with Sarbanes-Oxley have companies rethinking this type of exit. Guy Kawasaki, of Garage Technology Ventures uses the 400-90-10 rule. This states that every year about 400 VC-backed companies have an exit — 90 percent via M&A while 10 percent are through IPO.
For M&A, you should research at what price similar companies in your industry were acquired and the basis for that price. Usually it is some multiple of sales or operating income.
A Common Problem Investors HearMany times I listen to presentations (pitches) by entrepreneurs where the financial projections are very low considering the overall opportunity. When I question them, presenters admit that they either decided to use — or were coached to use — conservative numbers. A deathnell to an experienced investor.
Early stage investors know that startups are risky. They know that some number of them will outright fail, others will survive but not produce the desired results, and then there will be the winners who provide the five to ten times or maybe even the grand slam 30 times returns. Does this sound like someone who wants to hear conservative information?
Now, this doesn’t mean that you should make ridiculous projections describing numbers and results that don’t make sense based on the realities of your market. You are best off presenting a realistic vision of what you believe you can do if you get the money and any support you are requesting.
I mention support because you should be thinking about raising “smart money.” This is when you get coaching, introductions to higher level investors or other help along with the funding. When talking with investors, especially Angels, you should ask about their network.
Tips to Keep in Mind when Talking to VCsThere are a number of people involved with each fund. You find titles like Managing Partner, Managing Director, Venture Partner and Associate, among others. When talking to someone in a venture firm, it is important to understand the position they hold.
- Managing Partners or Directors usually are the ones who decide which deals actually get funded.
- Venture Partners find and “mind” deals, provide coaching and direction to the startup.
- Entry-level Associates do the leg work. They research to determine how target market sizing and competition estimates stack up.
Often, I hear entrepreneurs thinking that VCs are arrogant or lack focus because they stop paying attention to them when trying to explain their opportunity. Well, if that’s happened to you, it might be because in your presentation you said something that got the VC to mentally come to a “no.”
Here’s the problem from the VCs perspective; an active VC firm gets several thousand opportunities (business plans, phone calls, and referrals) thrown at them each year. They deem around 100 worthy of taking a closer look and then do due diligence on about 10 and maybe invest in one.
Because of the large volume of deals, each VC has their own process for paring down to the precious few. It focuses on getting to “no” as quickly as possible.
Potential Restriction within a FirmMost firms have restrictions on the number of companies each partner can manage in their portfolio at one time. Partners are continuously involved with portfolio companies and they need to ensure that they have adequate time to allocate to them. It is usually somewhere between five and eight companies. So, if you run into a firm that has six partners, you can expect that they can manage relationships with approximately 30 to 48 portfolio companies — although the math is never that clean since partners also specialize in various areas like life sciences, Internet companies, wireless or enterprise software. So, if your business is enterprise software and the partner you are talking to already has a full plate, he or she might not be able to take on another investment until one of the portfolio companies has an exit.
Remember WIFM when Talking with VCsWhen you finally get a chance to talk (pitch) to a VC, remember they are listening for the WIFM — they want to hear a crisp description of six key points:
1. What is the business opportunity you’re offering?
2. How big is the market?
3. What pain are you solving?
4. How much money do you need and how will you spend it?
5. How long you need the investment?
6. What is the projected payout to the VC on your exit?
If you start the conversation talking about why you created the product or too much about the technology before you get to your business model, the VC’s filtering process kicks in. They get to “no” and stop listening.
Finding InvestorsHere are some ways you can learn about Investors and do a better job of preparing for conversations with them:
- Find out about Angel Groups by visiting the Angel Capital Association
site at http://www.angelcapitalassociation.org. The directory provides
a list by region.
- Look for Angel Groups in your area and contact them to find out about
the organization’s process and if guests are invited to entrepreneur
presentations.
- Try to talk to some investor members and find out about the types of
investments they make, the average investment size and other members.
Ask them about the last few investments they made.
- Find out about investment timing — not just the average time but the longest time.
- Check out their website. Most firms’ websites describe their
philosophy, specializations, partner bios, and even list portfolio
companies. Looking at their portfolio companies, try to have coffee
with one of the CEOs to get his or her perspective on the VC firm.
- Manage your expectations. Entrepreneurs are more optimistic about the funding than is the Investor.
- Most VCs admit that the best way to get their attention is to be introduced by someone they know and trust.
VC Bloggers (IMAGE)Another shortcut to learn about the venture community and some specific VCs is to begin following VC blogs. You may be surprised to learn that there are a number of VCs who actively blog and write about their funds and strategies on a regular basis. Most are Managing Directors or other senior level members of their firms. If you know about blogs, then you know that most bloggers provide a list of who they follow and read on a regular basis. It makes sense that VCs follow other VCs and it’s a great way to learn about their networks. See the table below for a few to get you started.
One last place with information on mainly VCs but include some Angel groups is at www.thefunded.com, a Web community of entrepreneurs who rant about their VC experiences. You can only join if you are an entrepreneur and investors are not accepted. Since it is a rant and rave site, you have to factor this into your own thoughts, but it might raise a flag in your due diligence.
Get to know your investors, and they might just want to get to know you and learn about your ideas.
 |
About the Author:
After a Fortune 50
Telecom/High Tech career, Jim Butz founded Resonnect where he has
provided “Gray Hair” perspectives to numerous startup companies. He is
also a member of the Southern California Chapter of Keiretsu Forum Angel
group and a Venture Partner with California Capital Partners, a venture
debt fund. Jim also has a blog on Southern California business issues at
http://socalbuzz.wordpress.com. |
 |
Establishing a domain portfolio is not as
easy as it was in the past. According to the Domain Name Industry Brief
from Verisign, there were more than 120 million registered domains as of
December 2006. This means a lot less domain availability across the
board and it’s getting increasingly competitive. There are more domain
extensions now, such as .net, .us, .tv and others, but top level domains
(TLDs) .com and .net are still the most widely sought after and
respected extensions.
|
So why would you concern yourself with building a portfolio of varying domain names? Because your competition probably has more than one domain. In some instances, they could have hundreds if not thousands of domains. Some of which may be variations on your own domain name. Worried yet? Good. Let’s get you started on establishing a domain portfolio that will secure your brand and generate revenue.
Whether you elect to buy a domain name directly from an aftermarket seller or purchase a new domain name entirely, there are a several things you should know. Domains define Web enterprises by providing a valuable branding opportunity inside the browser and outside the Web realm. Since every Web enterprise needs a domain name, or two or three, consider the following as a brief best practice guide to establishing a domain portfolio and managing it for long-term brand sustainability and profit.
Buy Existing Domains:
A quick search of desired domain names can be discouraging. But just because someone owns your top choices does not mean they won’t be willing to part with it — for a price, of course. Here are some helpful tools for researching the value of domains:
■ dnScoop: A free resource offering insightful information on any domain; age, inbound links, Alexa traffic rank, Google PageRank and an interesting appraisal feature.
■ PagerankPredict: Predict the future Google pagerank for a domain. Free, but queries are limited to five per
hour.
■ SearchStatus: A Firefox plugin that offers quick access to valuable data such as backlinks, keyword
density, whois information and more.
Find a Reliable Domain Registrar
It is important that you find a domain registrar you can trust, with a decent balance of price, features and control. While many companies often try to bundle additional features such as hosting and email on the individual sale of domains, keep in mind that there is no reason to ever pay more than $10 per year for one new domain. The registrar you elect to help manage your domains should offer features such as privacy control and an intuitive control panel to manage the DNS records of your domains.
Utilize Coupons or Become a Reseller
Getting a competitive price on domains is important if you plan on buying in bulk and for extended periods of time (more than one year). As with ordering anything online, search for coupons or stay abreast of deals by monitoring hosting company blog feeds for the most recent deals. GoDaddy frequently offers coupons and sale events.
Another option for establishing a domain portfolio on a budget is to become a domain reseller or an affiliate of an ICANN accredited registrar. Doing so will mean that you, as the portfolio owner, will be able to secure domain names at cost without any significant markup. Two popular reseller solutions are Wild West Domains and Directi.
Expand Your Domain
There’s .biz, .org, .edu and the list goes on. Which ones should you buy? Well, TLDs .com and .net, at the very least — those are the most widely used domain extensions. Buy these so that no one else registers them and mooches off your hard-earned traffic. Having an active domain out there similar to your site but unrelated also causes confusion for your visitors. When you order these, be sure to forward them to your main website —don’t just have them lead to a “Server not found” or “404? error page.
Misspellings & Typosquatting
Many of us frequently make mistakes when typing a URL directly into the browser address bar. Misspellings occur more frequently than you may think and there are many professional domainers out there that are actively capitalizing on these typing anomalies, often referred to as typosquatting. By registering domains that are spelled incorrectly or on different TLDs, traffic intended for your site is getting lost. Most professional domainers don’t utilize common misspellings for domain names, as tyopsquatting and copyright issues are coming to the forefront, but buying such domains to protect your own brand may be in your best interest.
Buy Thematic Domain Names
If establishing a domain portfolio to support an existing company and build up some capital, it is important — some would say imperative — that you purchase domains to match or at least meet the company name and its products, services and even advertising campaigns. Much like establishing product or brand names, you will want to make sure the domains you keep have value to others. So, in addition to buying domains that match what you are offering exactly, consider buying domains that support your overall mission.
What is Domain Tasting?
Domain tasting is the practice of exploiting the grace period of a few days (provided by ICANN) at the start of a domain registration to test its marketability or whether the domain has any existing traffic through type-in traffic or outdated links. The grace period provides a full refund on domain purchases, should the buyer change his/her mind. Domain tasting, while considered by many to be unethical, is employed frequently by professional domainers.
Become A Rigorous Domain Manager
One of the inherent problems with buying hundreds or thousands of domains is managing them properly. One oversight could cost you a good domain — which is why becoming a rigorous manager of your portfolio will benefit your enterprise. Consider setting auto-renewals or at least automatic reminders to prevent your domains from expiring without your knowledge. Many professional domainers also opt to synchronize their domain expiration dates, making it easy to renew all expiring domains once and not several times throughout the year. But miss that expiration date and you could lose all of your domains.
Show Me The Money!
The reason that most people develop a domain portfolio is for the revenue. There are hundreds of wayws to profit from the domains you have added to your portfolio. Here are a few of the most popular.
• DIY Advertising Arbitrage: Whether you purchase a new domain, recently expired domain or one directly from someone else, the most popular method of generating revenue for professional domainers is advertising arbitrage. This practice capitalizes on direct type-in traffic or misspelling by profiting from the visits and clicks of end-users. Static pages are loaded with ads that resemble links and sources.
• Lead Generation: If the domain names that you purchase directly from a seller have existing communities or a reasonable amount of traffic (whether it’s through links or natural search traffic) consider setting up a lead generation network in tandem with an appropriately-themed affiliate program.
• Create a Community Portal: If planning on using the domain you have bought for your portfolio, you may want to begin building a community resource that supports your other sites. For instance: You sell auto parts. Consider building a community site where members can ask and answer questions about how to install those parts.
• Paid Domain Parking: To monetize new or under-developed domains, many professional domainers utilize domain parking services. There are hundreds of services available, all working in a similar way — displaying advertisements based on the theme of the domain (or domain owner keyword prompts) and, in many instances, paid-search functionality. Some popular services include Sedo.com and DomainSponsor.com.
• Redirect: If you are serious about promoting one, and only one company then simply consider permanently redirecting your recently acquired domains to the core site. If the domains in your portfolio have any existing traffic, the core site will naturally benefit by receiving a flow of traffic from their existing listings in popular search engines.
Get Started … Yesterday
Let’s face it — buying domains can be a lot of fun. Telling people you own thousands of websites will instantly make you the center of attention at almost every geek party. But beyond the shopping spree rush and having a good conversation starter, establishing a domain portfolio can be a serious asset to your business or your own personal income. And get on it now, because good domain names are flying off the shelves every day.