No No No!! Don’t Develop That Domain

Back in August, I mentioned how I caught an episode of Morgan Linton’s live web show.  It’s great to see things done differently, and to get the know the personality of one of our industry’s enthusiastic bloggers.  I’ve caught the show several times since then along with the catch phrase “No No No!!  Don’t Develop That Domain,” and wanted to take a deeper dive into the domainer in front of the camera.

Mike:  It always interesting to hear how people landed where they are today.  When and how did you develop a passion for domain names?  How long have you been doing this?

Morgan: I started getting interested in domain names only three years ago in the summer of 2007. I had some extra money that I was looking to put in an investment vehicle that wasn’t the stock market. In fact Linton Investments was originally formed as a Real Estate investment company. I was planning on buying land in Maine and developing in an area that at the time was very inexpensive. However this was also when the market was just starting to dip and I’ve always told myself never to invest in a declining market. So I had to look for some other investment vehicle and I stumbled on Domaining after finding Sahar’s blog Conceptualist.com.

It only took a few minutes for me to immediately realize what a perfect fit this was for me. My background is in Engineering and I also ran a web development company in the mid-90’s so the idea of virtual real estate was very appealing to me. The only thing that didn’t make sense to me was Parking, I didn’t understand why people wouldn’t want to rank well in the search engines, so I took a different approach. The early success I had with monetization showed me the true passive income potential of domains, once the money started coming in it was hard to not be completely hooked!

Mike:  I’ve heard you say several times that you make most of your money through developed domains as opposed to selling domains.  Do you feel development is the best choice for domain investors?  What makes development a better overall strategy than flipping names for profit?

Morgan: I think that development is one of the ways that investors can make money with domains. While I personally like monetization more and use it as my own strategy I know plenty of people that make good money buying and selling domains. So I wouldn’t say that it is the best choice for domain investors, it really depends on what the investor is looking for. I’m a passive income guy, it’s in my family and something that’s been ingrained in my since I was a kid. In any business I like the model of building a system that will make money whether you are actively doing work or not. Monetizing domains means doing some work upfront to achieve consistent revenue every month. One of my most profitable months was when my girlfriend and I went on vacation for a month, I did no work and had one of my best months of revenue ever.

There is a lot of money in buying and selling domains and this is a good choice for some Domainers. First it’s a much quicker process to get money and usually comes all in one burst. The reason I’m not crazy about buying and selling domains is that to sell a name you really have to actively work. If you take a month off you won’t sell any names and your business will crumble. It’s not passive and so it’s not for me. It doesn’t mean I’m not a hard worker or I don’t like to sell, I love sales and have been doing it for years…it just comes down to what kind of income stream you want and I’m a passive income guy.

Mike:  I’ve recently become a regular viewer of MorganLintonn.tv after my first visit, which I previously posted about.  There is a huge difference between watching a video and being able to interact with the host and other viewers.  What are some of the benefits you have seen and experienced from running this live program?

Morgan: I have been blown-away with the initial results of MorganLinton.tv – it definitely is the most effective way I’ve found online to really interact with and engage an audience. It’s a lot more work than I thought it would be since I’m not only hosting the show but also producing, setting-up the lights, mixer, etc. In the end I think it’s allowed me to reach Domainers all over the world and the ability to chat and share comments and ideas in real time offers a unique experience that you can’t really find on a forum or blog. I have big plans for MorganLinton.tv and this is only the beginning, from what I’ve seen it’s independent television programs and channels like this that represent the future of broadcasting.

Mike:  Your company, Linton Investments LLC, owns a diverse collection of domains ending in a variety of TLDs, including com, us, net, tv, org, me and others.  What is your philosophy on the different TLDs for development and investment?  Are ccTLDs a risky investment?

Morgan: We do have a very diverse portfolio spanning over 25 different TLDs. I look at each TLD as an investment with a different time horizon. My .com, .net, .org, and .us names are oftentimes where my development and monetization time is focused. If I sell a domain it will most likely be in one of these four TLDs as well. Many of the other TLDs I invest in are for a longer term and like a stock, I have significant reason to believe the value will increase over the next 2-5 years depending on the TLD. I think you have to think both short-term and long-term in this industry. If you don’t think long-term then if a TLD turns-out to be a great success you’re buying at full retail when you could have bought at wholesale a few years earlier. I think markets like India have a ton of potential and investments in this space could be a good play in the long-run.

At the end of the day I always remember that I’m running a business. I put a majority of my focus into the things my business does to make money which is developing and monetizing domains. I pick targeted long-term investments with no expectation of immediate revenue but the belief that the value will rise dramatically in the future. As a Domainer you have to always stay focused on revenue, if you’re not making money you really aren’t investing. At the same time you have to look at where your business will be 2, 3, and 4 years from now and plan ahead.

I don’t see ccTLDs as a risky investment as long as you do your homework and buy ccTLDs that make sense. Don’t buy a US city name in .MX, don’t buy an English colloquialism in a .DE. Buy domains that make sense and really focus on premium names in the ccTLD space. I usually look for one-word premiums that had their corresponding .com sell in the six-figures. These are the names that I think have the most potential of being valuable in the future.

Mike:  I’ve also heard you mention lead generation as a monetization strategy for developed domains.  How does lead generation work and how can it produce revenue for a site owner?

Morgan: Lead generation is a new strategy I’ve been working on this year. The idea is that you can put a simple form on your website and when a visitor fills-out the form you get paid. The thing I really like about lead generation is that in some niches the payout per lead can be quite high. Just think, if each patient a Doctor gets makes them an average of $50,000 over a few years how much is that client worth to them?

The challenge with lead generation is that there are a lot of players in the hot spaces so if you want to play you have to bring your A-Game. I’ve found that the guys with a lot of success in most of the hottest lead generation niches use some major SEO to rank well and beat their competitors. While there is money to be made a quick mini-site won’t cut it in most lead generation spaces. Right now I’m working on getting a DWI site that I have performing well before replicating the model out to other sites.

I always recommend that people spend time getting a model right before perfecting it. I did this with my Adsense sites, then my affiliate sites, and now I’m doing the same in the lead generation and direct advertising space. If you’re not taking the time to find-out what works you could be replicating a failing model!

Mike:  What is your primary strategy for acquiring domains?  Do you hand register, drop catch, buy from auctions and other domainers?

Morgan: Most of the domains I buy now are through drops. I spent some time every evening on Snapnames and now focus mostly on buying .com names. When I hand-register I usually focus on .us and picking-up long-tails in niches I want to dominate in the search engines. I have bought a few names from live auctions this year as well like at TRAFFIC Vancouver and think there are some good opportunities there as well.

What I like about buying expired names is you can get the exact-match domain with a bit of age which really helps a site rank well quickly. Also if I can snag a great .com I have the option to develop or sell it whereas you have much less resale potential with a .us or .org name.

Mike:  What is your advice to someone starting out in domaining today, or maybe someone who has been in it a while and is just slow moving?  What is the most effective means to develop a small portfolio of profitable domains for investment or development?

Morgan: I recommend that everyone starting in this industry NOT buy domains initially. Spend the first few months reading Domaining.com and learning what people do and how they make money. I think it is so easy for people to get excited about Domaining and just jump in without learning the basics. Registration fees can add up and if you’re not making money with your domains you really are collecting rather than investing.

I get emails every week from new Domainers with large portfolios of garbage, all things that sounded great to them at the time but really have little potential for development or resale. To get started learn the basics and reach-out to someone who is making money in the area you want to make money. The great thing about this industry is that many people are more than happy to share their strategies. Learn what other people have done to be successful and replicate that. Don’t start-out with hundreds of domains, buy five or ten max and make money with every single one of them. If you can do that then you can buy more because you have a successful model.

This is the biggest mistake new Domainers make, they don’t look at how they will make money with a domain before they buy it. Find a model you like, prove it out, then repeat, if you start with the repeat part before proving your model you might end-up with a collection of domains that gathers dust over the years.

Mike:  What skills do you feel are essential for domainers to possess in order to be successful?

Morgan: To be honest with you I think the only skill someone needs is persistence, everything else can be learned and is readily available online. People looking for a get rich quick scheme should stay far away from Domaining, everyone making money in this industry does so because they’re working hard! You can’t be afraid to fail, instead you have to keep working at it and find what works for you. Some people might be great at buying and selling domains but terrible at development, you may like building geo-domains but nothing else. We’re all different and it’s finding the model that works for you in this industry that is the key. Once you find the model persistence will bring you success, I know hundreds of successful people in this industry, all with different skills-sets but every one of them is persistent, never give-up, this is the future!