Tobias Ratschiller's Blog

Developing Web Sites for Resale

noreply@blogger.com (Tobias Ratschiller) — Thu, 31 May 2012 11:45:00 +0000

[ This post is part of a short series on Buying and Selling Websites]

Wow, how much easier this business got in the last 10 years. Developing web sites used to require programming skills, a good eye for design and expensive servers.

Today, you can actually focus on making money. The technical part has become a commodity.

That doesn't mean that today you can create money making websites without investing time. It just means that you can focus on what really brings the cash.

Here are some tips on how to build web sites that are meant to be sold for at least six figures.

Find a Good Niche

The start of your venture is to find a good topic. Maybe this is something you already have knowledge in or something that you are passionate about. Don't pay too much attention on what's hot right now. Question advise that tells you not to do something. If I had a Dollar for every time people told me not to start an AdSense business in the travel niche... I would still have less money than I made with the sites :)

A good way to get inspiration is to look at listings on website marketplaces. Start with Flippa.com, Latonas.com, WeSellYourSite.com, WarrierForum or QuietLightBrokerage.

This is also a good time to think about what you really want to do. For example, we don't have any adult sites, gambling, or health advice sites. I would suggest you ask yourself how you will feel telling your daughter or son in ten years about your sites.

Don't Reinvent the Wheel

When you intend to sell a web site, it is always an advantage when potential buyers see stuff they are familiar with. For example, buyers prefer standard content management systems like Wordpress over home grown solutions. The reasons are obvious:

There is no learning required.
Support is widely available.
Development is ongoing and not dependant on you or your developers.

What counts is usefulness for users, not innovation for innovation's sake. In most cases, today there is technology out there to do what you want. I would estimate that 90% of all web sites that are sold are based on standard software with few modifications - if any.

Should you use Drupal or Wordpress or Joomla or...? It doesn't really matter. Chose whatever you are already comfortable in or what suits you most. The important thing that you do actually use a ready made platform and don't start building things from scratch.

If for some parts you really need custom development, outsource it via freelance or other market places, I would advise not to spend more than $2,000 on an initial minimally viable product that you can launch with.

Chose a Good Domain

I have a history in domaining, the art of buying and selling premium domains. I know the value of premium domains for branding.

The thing is: You can build a successful website just as well on a freshly registered domain. In fact, in some cases a new domain may outperform a premium domain that you bought for big money. The premium domain might carry some history unrelated to your new topic. Even worse, it could have a penalty because of spammy SEO. If that is the case, your efforts will be an uphill battle that may not be worth fighting.

Here is an example of that from real life. We hand registered MisterEmpresa.com for a Latin American business directory and it has now around 20,000 unique visitors per day - compare that to VisitBrazil.net, a domain we bought on the aftermarket for a couple of thousand Dollars, launched at the same time, now stuck at only 50 uniques.

On the other hand there are three facts that speak for investing in a premium domain name:

A premium domain is a backup. It brings a value by itself, adding to your website worth. Even if your development fails, you should be able to recoup part of your investment by selling the domain (if you bought at a smart price).
If there was already some content on the domain, and that content is topically related to the site you are planning to build, it can give you a significant boost and shorten the time to traffic.
Premium domains are brands. It is much easier to sell an advertising deal to a hotel in Kyiv when you are Kyiv.com than when you are visitkyiv.co.ua.

In summary: Get the best domain you can get for your budget, but pay special attention in your due diligence on past use and past SEO.

Traffic, Traffic, Traffic

Whether your business model is advertising, affiliate sales, subscriptions or product sales - to make money with a website you need traffic. The more traffic you have, the easier it is to generate revenue. You certainly can make money with small, specific traffic, but then you will need to know a market well and be able to convert the traffic well. It's much easier to make money if you have vast amounts of traffic.

And it's much easier to make money if you have free traffic because then your user acquisition cost is zero. It's hard not to make money on zero cost. Free traffic is coming from search engines. So you need to learn about search engine optimization.

How much traffic do you need before you start making money online?

It seems a magic number is 10,000 unique visits per day. Once you are there, you are starting to be attractive to direct advertisers and you will make some decent revenue from AdSense or other advertising networks.

How do you attract such amounts of traffic?

Create useful, interesting content. As boring this advice is, as true it is, but there is an aspect that is often neglected. Say that you are writing an article and it gets spread virally - a single article attracting 10,000 visitors over 10 days would be a huge success. It's much more likely that an article attracts a couple of hundred visitors. That means you are better off having 1,000 articles with a regular audience than trying to come up with that hit viral wonder.

To make it clear - if I say article, it does not have to be editorial content. The important part is scaling up your content. Get creative: product descriptions or reviews, images, directions, symbol explanations, historical content, patents, whatever you can bring in large quantities that are useful to visitors and has not been on the Internet before.

SEO Explained; or the Million Dollar Question Answered

SEO? Really? Isn't that sleazy? Do you really want to be Google's bitch? Isn't it too late to come to that game?

There are many myths around SEO, and people both passionately love and passionately hate it. The matter of fact is that today search engine traffic is the easiest and cheapest form of traffic.

SEO is in fact very easy. It means three things:

Making your site easily accessible to crawlers (and you have to try hard to fuck that up if you are using a standard system like Drupal or Wordpress)
Coming up with interesting and valuable content
Spreading the word so that people will find, consume, and spread your content and return to your site

Here is the answer to one million Dollar question on what to do for SEO.

Understand that all search engines rank pages by relevance and importance. Importance is largely determined by popularity, and popularity is determined by the number of "mentions." How many people link to you? How many people talk about you on social media? Are the sources that mention you authoritative?

So it's clear that most important aspect is gaining popularity, spreading the word, building links:

Find influencers in your topic and get them to link to your content
Write guest posts, columns, editorials on other sites and include links to your site
Make it easy for people to share your content on social media
Engage with people on Twitter and Facebook and point them to your site (when appropriate)
Answer questions on Quora, Yahoo Answers, etc, with references to your site (when appropriate)
Run competitions that include something where people link to you
Come up with infographics, great photos, or videos that people naturally tend to link to
Make sure your videos on YouTube link back to your site
Ask for a link at every occasion. For example, we did a body painting for the Euro 2012 soccer championship. Of course we asked for links from the painter, the photograph, each model, and the studio. :)
etc etc

you are just starting out on SEO, make sure to read the Beginner's Guide to SEO by SeoMoz. For some more ideas on link building, check out this post on SeoMoz.

Remember, there are no short cuts. Gaining exposure takes both good content and time. Don't fall into the trap to try to speed things up by buying directory submissions, link wheels, spam blog networks, or any other tactics that are meant to deceive Google. If you want to get significant organic search traffic, you don't want to run the risk of Google taking you out of the index.

Passive Income is Key

My favorite aspect of making money online is that you can build up sustainable passive income. The dream of sitting at the beach and still making money is real.

One of the best ways to monetize traffic is AdSense. Buyers love AdSense because once set up and optimized, it requires no further work. Compare that to finding direct advertisers or optimizing your website for sales conversions.

With 10,000 unique visitors per month, you can expect to make $5,000 per month in advertising.That's a $200,000 sale right there.

Every bit of manual work that you have to do on the site detracts from its value. If you have orders to ship, customer inquiries to answer, or spam to fight, try to outsource as soon as possible to make the business a hands off operation.

Keep the House Clean

If you start he site with the intention to sell it, it is much easier to keep a clean house from the beginning.

Add Google Analytics, with AdSense tracking enabled
Have the site on a dedicated server or VPS with no other sites, so that you can pass the whole set up to a buyer, if he is interested
Add a URL channel in AdSense if you run AdSense on more than one site to make verification of income easier
Keep track of expenses and income in an Excel sheet
Document your supplier/vendor/outsourcing relationships

Take Your Time

Growing a site is like growing a tree. It takes time and care. There are no short cuts on the way to sustainable sites, and if anyone is telling you something different, they are lying because they are trying to sell you something which will get you penalized by Google sooner or later.

Buyers value sites with operating histories of at least 12 months. If in the trailing 12 months your traffic was stable or growing, you will have a good negotiating position.

Enjoy the Process

You will be stuck with your baby for a long time. You will have to work on it instead of going out, spending time with your family, or watching movies. Hopefully your site will be about a topic you are at least somewhat interested in.

I don't advocate that you have to be passionate about the topic of your site. I'm only mildly interested in Traditional Chinese Medicine, but I enjoy the money TCM.org brings. If I am completely disinterested in a topic though, it would be difficult to find the motivation to look at the site on a regular basis.

Most likely you will also be hit by setbacks. What if over night you lose half of your traffic because of a Google algorithm change? Will you be motivated to move on? Hopefully you enjoy what you are doing or the temptation to quit will be high.

Summary

Creating websites for resale and recurring revenue can be a sustainable business. Like all businesses, this takes time, determination, and the willingness to experiment and learn from mistakes. If you are getting started with this, good luck, and let me know if I can help (or buy your revenue site for cheap). :)

Thanks to my friend Herve Aubin for reading a draft of this article and providing great feedback.

Buying and Selling Websites

noreply@blogger.com (Tobias Ratschiller) — Thu, 31 May 2012 11:44:00 +0000

I often get questions about our business of buying and selling websites. People either don't want to believe that you can actually make money on the Internet or want to know all details at once.

So I wanted to write a short series to explain the basics and share some of the things we learned since starting this five years ago.

Developing Web Sites for Resale
Buying Websites
Selling Your Website for Six Figures
FAQ Me. Common Questions.

As a disclaimer, these are mostly tips to create advertising driven sites in a repeatable process that are meant for passive income and eventually a resale. These are not going to be the next Facebook or Twitter, but can give a sole entrepreneur or a small team significant income in the six or seven figures yearly.

Website Broker Wanted?

noreply@blogger.com (Tobias Ratschiller) — Thu, 16 Jun 2011 12:43:00 +0000

Domain brokers come and go quickly. A new one contacts us each week. It's the easiest way to get started in the domain business without upfront capital investment. Unfortunately, the people with no money to invest are usually also not the best sales people ever, so the actual turn over rate is low. Even if a domain broker is really good, there are a couple of problems:

The time investment is significant if you do it right. You would have to do market research, contact end users, advertise. Just sending the name to five of your previous buyers and putting it up on your mini site does not make you a good broker.
Most domains sell in the $1,000 - $15,000 range, making commissions unattractive for a single broker or small team. You have to turn over en masse and you would do that by building a marketplace platform like BuyDomains or Sedo, not by single-handily brokering names.

Earlier this year I tweeted a quick advice to all domain brokers out there: Specialize in website brokerage now! I believe there is a significant opportunity for any player entering this market. The leading market place Flippa is overfilled with low value and sometimes downright scammy offers, and domain market places like Sedo simply don't get the website business.

Indeed, Rick Latona switched recently to brokering revenue-producing websites. Here's though six things that I would like to see from a website broker (and this comes from a background of acquiring by now over 75 websites):

Verified Google Analytics, and earnings with a stamp of authenticity. Every website investor must still do their due diligence) but when reviewing brokered listing you should be able to assume that at least sources have been verified.
Informative offering pages with background on the business and owners. The one paragraph descriptions at Latona's just don't cut it. I would like to see a combination of owner-supplied listing text and a broker description similar to the Flippa-A-List mailing list.
Give uniform information about businesses. In an ideal world the broker should work with each owner to create a uniform set of financial data and traffic figures.
I'd suggest that brokers focus on high value names with asking price of $50,000 and above. Flippa is okay for the rest and if you want to do a good job as broker, the amount of work you will have to put in does not differ much whether it's a $10,000 or a $200,000 sale.
Brokers need to work actively to promote listings beyond their website and mailing lists. Please give details on how you intend to earn your 15 percent.
Be transparent. I would like to see your closure rate. Average sales price. Time to close. Team size. Etc.

South America Trip

noreply@blogger.com (Tobias Ratschiller) — Wed, 15 Jun 2011 11:17:00 +0000

Earlier this year in March I went on a trip in South America and visited Argentina, Bolivia and Peru. In terms of business it was quite an eye opener for me and I'm convinced that there are huge growth opportunities in Latin America's Internet sector.

It started with the travel preparations. Booking flights or trains in countries like Bolivia or Peru is a pain. To book a flight from Santa Cruz, Bolivia, to La Paz, Bolivia, I not only had to call to make the booking, but I also had to fax in scanned copies of my passport and credit cards.

In general tourism is not well developed except in the most common touristic areas such as Machu Picchu. When we took a boat tour across Lake Titicaca, we (two persons) were alone aboard a huge ship - dedicated tour guide included! For the price we paid (I think something like $200 for the day) this could only be a loss for the tour operator.

Obviously Internet penetration is low at around 25% but even compared to countries like Ukraine with similar penetration rates I was surprised that even for example companies in Lima do not advertise their websites much on their shop signs, flyers etc.

Of course, once you take a jeep and go for a few hours into the campo, you discover places like San Antonio: no Internet, no cell, no phone, and they got power last November.

While we have a sizeable business directory of Bolivia's Santa Cruz in our porfolio, San Antonio, or the next larger city of Concepcion (10,000 population) don't even register on the map.

The AdSense numbers reflect this general impression: CPM of South America is half of Ukraine, Ukraine is half of Europe. Still the growth of our Latin sites (we have, for example, a business directory of South America) is impressive.

Five Random Things for Entrepreneurs

noreply@blogger.com (Tobias Ratschiller) — Fri, 21 Jan 2011 14:09:00 +0000

How To Start a Startup - article
I would anyone looking to start a business to this article.
The End of Geocities - post
As a commenter on this post says "Struggling to meet the bills, having a dream, and pushing until you are successful." Everyone sees the successes, but few share the hard realities.
Why We Do What We Do - video
Legendary Tony Robbins TED talk.
8 Secrets of Success - video
Eight secrets, less than six minutes.
Ze Frank- video + bonus song
Save the song at the end for the hard times.

What a Ride. Shifting Gears for 2011.

noreply@blogger.com (Tobias Ratschiller) — Mon, 27 Dec 2010 08:27:00 +0000

It's that time of the year again. I love the time between Christmas and New Year's. Business is quiet and there is time to look back and plan for the next year (even if it usually comes down to the same Pinky And The Brain quote: "Gee, Brain, what do you want to do next year?" "The same thing we do every year, Pinky - try to take over the world!").

2010 was without big surprises in our business. I had said in the beginning of 2009 that crisis years are building years, and in 2010 we continued what we had begun in 2009. We bought over 50 developed sites this year on forums, Flippa, and via private deals. In addition, we started a promising cooperation with the Domain Developers Fund to develop some of their names in equal rights joint ventures, the first ones being TCM.org and Holland.net.

I hope we will be able to expand in 2011 both via natural growth, more acquisitions, and joint deals. It's certainly still a buyer's market out there, but maybe we will find the right buyers for some of our bigger sites, building on our first six-figure sale in 2010.

Some weird experiences from this year:

a hand registration, MisterEmpresa.com, outperformed all of our second market domains in terms of growth
we now have several PR6 and Alexa Top 10,000 sites for bragging rights
biggest fuck-up: sold a domain via GoDaddy and can't cash the cheque in Slovakia

PS: My 2010 predictions weren't off too far. Still holding on to my Apple shares too.

Triple Your Income: How To Optimize AdSense and Increase Your CTR

noreply@blogger.com (Tobias Ratschiller) — Wed, 06 Oct 2010 08:48:00 +0000

... or how we increased our CTR from January 2010 to August 2010 by over 300+%. You can literally double or triple your AdSense revenue just by optimizing the ads.

Here are some leanings that we found had the most impact on our revenue. This may be common knowledge among publishers, but it took us a while to come this far, and cost us tens of thousands of Euros along the way. Unfortunately, the AdSense Terms of Service disallow disclosing of the exact CTR or other figures, therefore limiting meaningful discussion - probably that's why we didn't find useful articles when starting!

I assume you are familiar with the basics of optimizing AdSense, such as the AdSense heatmap, setting up channels for measuring your experiments, and Google's basic color suggestions.

Split test everything. The software mantra of "Don't touch it when it's not broken" does not apply here. With AdSense, continuous improvement is key. The best way to test is split testing (variation testing), which often leads to unexpected results. Obviously different sites and different industries have different preferences and requirements. It surprised me though how different sections on one website performed significantly different. Here is an example. The Danish business directory on Denmark.net performed much better (0.5%) with a red border than the English language version did - there the red border was actually detrimental to CTR.

How to split test AdSense: Here is a quick way to implement version that serves two or more different channels on the server side with a random distribution. This is easy to do in PHP:

mt_srand((double)microtime()*1000000);
$rand = mt_rand(1,2);

if($rand == 1)
{
// serve AdSense channel A
}
else
{
// serve AdSense channel B
}

You can then easily compare the two channels and see the winner.We split test everything. Font colors, font size, borders (rounded or not?). We actually automate split testing to automatically pick the winner and continue with that until it can't be further optimized via machines.

Color optimization: Should you go for a blended palette or for ads that really stand out? Again there is lots of conventional wisdom around this area which you may completely throw out of the window once you actually start testing.We have not found a single answer to this question - except that you should test!

Placement. Probably the single most important factor of the CTR is the placement of the ads. You have to give special attention to the publisher guidelines here, for example not to place ads too nearby navigational elements. However, it can make be an easy 0.5% difference in CTR if you place an AdSense unit a little bit higher above the fold than in the center of the page. Again, they key here is testing variations.

Best performing ad units first. Google displays the highest paying ads in the first ad unit of the page. So make sure that first unit is your best performing one! You may need to use CSS positioning to show ad units higher up than they are actually in code. For example, you may have a header ad that doesn't perform well and a in-content ad that performs well; you would now use CSS to position the header ad unit in the header of the page even if in the source code this ad unit comes second.

Section targeting: Using section targeting, you can highlight to the AdSense bot which parts of your page contain the main text body to which the ads should be targeted to. This can make a huge difference by serving ads that are actually contextual.

Direct placements: AdSense has two ways of serving text ads: In the first way, Google does all the logic of trying to understand your page and the visitor to serve contextual ads. The second way lets advertisers target your site directly and place ads in specific channels on your site (if they are enabled for it). It's important to know about this, since the CPM and CTR can be wildly different for the two scenarios. If you go to a channel in AdSense that is currently enabled for external placement, there is a link called "View 7-day earnings" which shows a report comparing the direct placement performance versus Google's. In our case, the direct placement was generally under-performing by 30-40% except on specific pages, so we disabled direct placement for many channels.

Heat maps: While basic heat map optimization is explained by Google, it took us awhile to apply it across different sites. Here is just an example of how a "minor" repositioning can add over one percent to your CTR.

Old:

New:

Just moving the information sidebar (company logo and some text) on our South America business directory from the left of the content to the right increased the CTR by more than one percent.

Demographic-based optimization: Since most of our sites have anonymous traffic, we rarely do this, but for web properties with many signed in/identified users, this is huge. I've seen examples where just serving different colors for men and women lead to a CTR doubling. I'm sure this is taken to excellence by the big portals.

Hire an AdSense optimizer: If an expert is able to increase revenue by 20% on an account, then for sites that have at least some basic AdSense revenue (5k/month plus) this would be a worthwhile hire.

Meanwhile, just keep optimizing, it's actually one of the fun parts of the online business because every bit directly translates to more money in your or your company's pockets.

Five Songs for Entrepreneurs

noreply@blogger.com (Tobias Ratschiller) — Wed, 22 Sep 2010 11:30:00 +0000

There is only way to do it: My Way, Frank Sinatra.
"Yes, there were times, I'm sure you knew,
When I bit off more than I could chew,
But through it all, when there was doubt,
I ate it up and spit it out."
Say it loud: We Are The Champions, Queen.
"No time for losers
'Cause we are the champions - of the world"
That's what we do. Build. Rock and roll. We Build This City, Starship.
"We built this city on rock and roll"
This song is for the n-th hour in the airport lounge: One Night in Rio, Louie Austen.
"Well after flying for seven hours in economy class
I was really mad, three crying babies
And no more liquor, and no sleep"
Need some energy? Yes, Yes Y’All, Sergio Mendes.
"And you don't stop, and you don't quit."

Domaining 2.0

noreply@blogger.com (Tobias Ratschiller) — Mon, 13 Sep 2010 14:55:00 +0000

Here are a few thoughts on the state and future of domaining.

1. Domains Sustain Brands
The primary use of a domain is to build or to sustain a brand. The primary goal of a brand is to drive sales.

A generic domain such as Candy.com is an instrument for a business to advertise them as category leader and to ingrain them into the mind of consumers as such. A brand thrives on resemblance, and a common word with ".com" at the end is easier to remember than an artificial name. Therefore, the more "common" a domain is (generic, .com), the more value it has for the brand. The less common it is (artificial names, less known TLDs, potential typo TLDs like .co or .cm), the more money has to be spent in marketing and advertising to achieve brand awareness.

2. Type-In Traffic Is Dead
In the early years, domains had type-in traffic - people typed generic names into the browser address bar and the browser appended the ".com."

If you type a generic keyword into the address bar today, IE will try to go to http://keyword, Firefox will go to the first Google search result, and Google Chrome will search Google for the keyword.

Even if you consider direct navigation traffic as type-in traffic, users only type domains they remember very well (twitter.com, google.com) directly into the browser, and they do so at an decreasing pace. Many users default to using a search engine even for direct navigation. Some studies say such navigational traffic is 15% of all searches.

On most large websites, direct traffic is less than 5%. Anyone with a nephew who is half skilled at SEO can produce more targeted search engine traffic than even the best undeveloped domains get.

If you have a domain portfolio with thousands of targeted names, type-in traffic will obviously amass to decent, yet shrinking traffic numbers - a thousand drops will form a puddle eventually. Money with type -in traffic is only made at scale.

For anyone else, type-in traffic is just not a relevant factor anymore.

3. New TLDs Need Branding

If we believe that the goal of a domain is to sustain brands, new generic TLDs will have to become brands themselves. If nobody recognizes "newyork.restaurant" as a web address, marketing money spent promoting it is in vain. This is a factor in favor of .brand TLDs (such as .canon), which, together, may change consumer adoption at a faster pace.

4. Applications Before Brands.

What makes the Internet interesting are its interesting applications. If you have a great idea, like Twitter or ChatRoulette, and can execute it well, the brand will be built virally and the name and domain don't matter. It's advisable that you don't get a really stupid domain like flickr.com or you will waste millions of visitors on flicker.com. But that's about it - you don't need a category killer, multi-million Dollar domain if you have the idea and can execute well.

5. Domain Investing Is Here To Stay

There always was and always will be money flocking to marketing and branding. Since good domains are finite, they will stay valuable assets and continue to attract money in the secondary market.

6. Domain Values Will Continue To Rise

Since domains are part of branding and marketing, it's ridiculous what amounts of money we are talking about when we look at most domain sales. In a corporation's marketing budget, $100,000 is a rounding error. Even private people blow $50,000 or $100,000 on a new car, Small businesses spend hundreds on letter heads, business cards and USB stick gifts. Yet a domain that can make an entrepreneur's marketing life so much easier is not seen to have value by many. The actual value of the fundamental structure that a domain can be to the branding process cannot be overestimated.

Much of the increase in value will come from end user sales, though, as established domainers continue in a wait and hold position, or even sell select names. Auctions and insider aftermarket will continue to be weak.

7. Parking is Bad, But It's Nearly Dead

Fortunes got built on parking, but really, a parked page is as useless to a consumer as a one way street plastered with billboards. Today, parking only makes decent money on typo and trademark infringing names. That's not going to get better and even large portfolio holders are moving away from parked to slightly more useful models such as Demand Media's or Epik's.

8. There Is No Such Thing As A Developed Site

Domainers talk about developing sites but in reality you need to develop businesses. Cash-earning, income-producing, profit-making businesses. This is actually quite hard and many domainers simply have skill sets (analyzing, collecting, investing) which are not natural fits for starting a business. Even worse, the curse of easy money from parking got many domainers lazy and unwilling to invest in learning new business development skills.

9. The "Domaining Industry" Will Remain Stagnant

Actually what calls itself "domaining industry" is composed of 70% run-alongs who couldn't tell a good name if it was delivered to their house with a gift wrap, 30% domain squatters who live off typo and trademark domains, 5% people who try to find real investment opportunities and 5% professionals. Probably there are less than 250 professional domainers in the world who live from pure domaining income. Conferences in the industry are ridiculously small with 200-500 attendees at best - compare this to SEO or affiliate events, heck even with gaming, adult, or geek conferences, all of which draw larger crowds regularly. Not to mention that half of the domain conference attendees are sponsor employees.

Unfortunately, for every one of the 70% wanna-be-domainers who leaves to greener pastures, there are five others who come to try their luck at domaining. The barrier to entry to this market is the $10 reg fee.

Most of these gamers have no real purchasing power, so they are not even influencing the secondary market. Further, there is minimum correlation between purchasing power and where you fit in the industry (the 70% idiots end or the 5% pro end), so often money is spent on non-assets like trademark domains in land-rushes (like $7k on porsche.me, subsequently lost in UDRP).

Most of those 5% with a significant interest in finding opportunities will move or at least get more involved in other web marketing industries (SEO/SEM/affiliate/tech).

What actually makes up the bulk of the real domainining industry is registries and registrars.

10. Registries, Registrars Will Remain Cash Cows

While nobody knows at this point how successful the new TLDs are going to be, one thing is for sure: those who will make immediately money of them are the registries themselves and the registrars. Those who already distributed 200 million domains will continue to do so in new TLDs. Registrars don't particularly care which TLDs are in demand as long as their absolute sales increase. Registries on the other hand will continue to suck the money out of domainers with creative land-rushes and auctions.

Domainers Are Not Developers

noreply@blogger.com (Tobias Ratschiller) — Wed, 28 Jul 2010 12:02:00 +0000

Domaining, while highly profitable, is boring to me, like all investing in virtual assets (stocks, etc). My passion is creating stuff.

Out of the Alexa Top 500 websites, just twelve have what domainers would call premium, generic domains. There's along road ahead if domainers want to show that they can develop successful sites too.

Domain	Alexa Rank
Ask.com	57
About.com	67
Weather.com	103
FastBrowserSearch.com	120
Answers.com	134
SecureServer.net	244
Uploading.com	251
BlogCatalog.com	314
TheFreeDictionary.com	319
Match.com	380
WordReference.com	418
Goal.com	482

An Introduction to Drupal

noreply@blogger.com (Tobias Ratschiller) — Sun, 25 Jul 2010 17:00:00 +0000

Almost exactly ten years ago I wrote an article titled PHP From an IT Manager's Perspective for the Intranet Journal. Today PHP is widely established in corporations and accepted as Java's little brother. The downside of that evolution is that for rapid web 2.0 development technologies like Ruby on Rails have somewhat overtaken PHP in geek popularity.

Generally, these days I'm much more excited about frameworks such as Drupal than about base technology like PHP. We use Drupal extensively in our websites. I love its simplicity, flexibility and the great community behind it.

From time to time I'm advising corporations, state organizations or start-ups on what technologies to choose. Last week, I was in Vilnius at the European Institute for Gender Equality, talking about their use of Drupal. Here is a slightly modified version of the presentation I used to give their management, editorial and technical staff an idea what Drupal can do.

The Day The Traffic Died

noreply@blogger.com (Tobias Ratschiller) — Wed, 30 Jun 2010 13:08:00 +0000

What would you do if you owned a store that is normally visited by 100 people a day, and suddenly, starting on a random day only 10 visitors come in?

You are fucked, that's what.

And still, this is what happens to small businesses and start-ups so often that you would almost call it normal. An important customer cancels their contract, the webserver goes down, a snafu messes up your inventory, or Google decides to stop sending traffic to your website. And with small overall revenue of maybe a couple hundreds of thousands to one or two million per year, all of these events have the potential to significantly affect your revenue.

Most of these have already happened in my businesses in one way or the other. Most recently, the traffic died on one of our websites. This is your worst nightmare if you have a website that is depending on organic search traffic. One day, you wake up to virtually no traffic.

It does not even have to be a Google penalty (which would be unwarranted for in our case since we always follow the webmaster guidelines), but a simple hiccup in the Google algorithm that leaves you with a shop and no customers.

So how do you prepare against potential massive drops in revenue?

The theory is easy, of course. "Secure revenue streams are diverse revenue streams", the saying goes. The ideal situation is that no income stream makes up more than 20% of your overall revenue. In start-ups and small companies, this is easier said than done. Would you turn down a customer just because the contract is 40% of your income? Of course not.

As I see it, as a small business, you should look at diversification as buying time in case one income stream goes foul. How much time do you have when your most significant income stream vanishes to find a replacement? In general, I would shoot for more than six months.

Let's say your company has 100,000 income per month, 40% of that coming from your largest customer. Your expenses are 70,000 per month, leaving a net profit of 30,000 - or a minus of 10,000 per month if your big daddy goes away. After cutting expenses, you should be off to a modest monthly loss that hopefully you can sustain for at least six months with your company's savings.

Another strategy is to "insure" against income loss by hedging against potential losses. For example, as company and investors, we hedge against the risk of traffic loss by buying stock in Google, Apple, Microsoft, etc. As site developers, we hedge by running many websites in unrelated niches.

In our case of the Death Valley of traffic, there was a Happy End, by the way. On May 19th, traffic suddenly came back to the site. Thanks, Google. :)

iPad Usability

noreply@blogger.com (Tobias Ratschiller) — Sun, 30 May 2010 11:20:00 +0000

I just posted a commentary on iPad usability on iPadManiac.com.

Thanks, Apple, for throwing us back to a beautiful 1999.
Today, web usability is largely a solved problem. We know what works, have experimented and conducted field tests, and routinely optimize websites to increase conversion metrics.
Then comes the iPad. Some apps remind me of the web in 1999, just more beautiful. Remember the web a little over 10 years ago? Some websites that wanted to be especially avant-garde toyed with Flash or large image maps. On those sites, your mouse became more of a discovery device than a point and click device.
Today it is the same with iPad apps: anything can be a user interface element. There are no standards, and it seems Apple is not doing a good job (yet) defining and enforcing guidelines.

Read the complete post.

Seven Beautiful Landscapes in South America

noreply@blogger.com (Tobias Ratschiller) — Wed, 05 May 2010 14:29:00 +0000

While working on our travel sites, I came across these beautiful pictures of South American landscapes.

1 Machu Picchu

Photo by ntnyc of Machu Picchu, Peru.

2 Iguazu Falls

Photo by Kaj Bjurman of the Brazilian side of the Iguazu Falls.

3 Lake Titicaca

The same Flickr user took this great HDR picture at Lake Titicaca.

4 Huayhuash

Photo of the Huayhuash mountain region, Peru's trekking and hiking paradise, by haddock.

5 Easter Island

Chile's Easter Islands, photographed by JC Richardson.

6 Salar de Uyuni

The Salar de Uyuni, Bolivia's largest salt lake. Photo by Vinícius Assis.

7 Torre del Paine

Torre del Paine in Chile, photo by Stuck in Customs.

Directory Sightings: Funny Names in Austria

noreply@blogger.com (Tobias Ratschiller) — Wed, 21 Apr 2010 13:02:00 +0000

Looking through our Austrian business and people directories, here are a few names I just had to share with you.

Of course I wouldn't go so low to make fun of psychologist Dr Killer or dentist Dr Dick. Never would I laugh at names like Hermenegilde Fucker, Reinhold Titz, or the many people in Austria called Harasser.

But I thought it was quite weird that a hotel would call itself Pension Wanker. I'm not sure about the pub Dick Macks in Vienna, neither.

Then there are the city names. There is a city called Egg in Austria. And one called Rottenegg. In Tyrol, you can find Mutters and Natters. Or Rum. The shortest city name in Austria is Au.

The most common names in Austria are Bauer (7,942), Gruber (6,884), Huber (5,974), Berger (5,659) and Eder (4,942).

Nine people are called End. Six are Last. None called One, unfortunately, but there is a One Up marketing agency, the One Touch fashion store and One and 2, whatever they do.

Say somebody databases are boring.

Five Productivity Tools I Can't Live Without

noreply@blogger.com (Tobias Ratschiller) — Sun, 14 Mar 2010 14:47:00 +0000

Over the last year I've obsessed about productivity. As I became a dad, I needed to squeeze more into less hours. Here's a few tools I found and today I can't imagine being without them.

LastPass. Rule number one for any Internet user is not to use an easy to guess password. Rule number two is not to use the same password for more than one service. So you need something to manage your passwords and store them securely. I used to use KeePass, but LastPass is so much better with its tight Firefox integration and an iPhone application.
Remember the Milk. If I am to use todo lists and shared task management, it has to be extremely easy and efficient. Remember the Milk is. You can add tasks with a Google-Calendar-like command prompt, saying for example "remember to buy milk ^today #shopping" to give the task a deadline of today and tag it with shopping. Adobe AIR-based clients and Google-Calendar integration make interaction a breeze.
Synergy and DisplayFusion. At work I have a four screen setup using two computers (one desktop, one laptop). Synergy lets you share one mouse and keyboard for multiple computers - I can use my desktop keyboard and mouse to control my laptop. Unfortunately, sometimes the mouse or keyboard gets stuck, and the software was last updated in 2006 or so - still it's an indispensable tool until I find something better. DisplayFusion is an utility to expand the Windows taskbar and wallapers to multiple monitors.
SugarSync. I regularly use three computers (desktop at home, desktop at work and a laptop). Pretty soon I will add an iPad to that. I barely remember life before SugarSync, but what a hassle it must have been! I actually used to email myself important documents so that I could access them from home. SugarSync keeps my "My Life" folder that stores all documents and pictures synchronized between all computers that I use. Plus, it has an iPhone version, version control ("access the document version from two days ago") and file sharing.
LogMeIn.com. In my company, we deal with large data sets, such as directories with millions of companies. Sometimes it's handy to leave the work PC on to do some number crunching or complex SQL queries - and with LogMeOn I can access it from my browser at home to see the results.

47 Country Logos You Maybe Didn't Know

noreply@blogger.com (Tobias Ratschiller) — Wed, 03 Mar 2010 20:19:00 +0000

Since this month we had to develop and launch our newest batch of country tourism websites (Visit Brazil, Visit Argentina, Visit Chile, Visit Peru, Visit Bolivia and Visit Paraguay), I wanted to see some official country logos and asked a colleague to compile a list of country tourism brands.

Here it is - enjoy! I think my favorite is France.

The Trouble With Outsourcing

noreply@blogger.com (Tobias Ratschiller) — Mon, 08 Feb 2010 12:09:00 +0000

... is that misunderstandings are frequent.

I asked a designer for references on illustrations similar to this:

(source: theoatmeal.com Twenty Things Worth Knowing About Beer)

and this is what I got:

Five Funny iPad Things

noreply@blogger.com (Tobias Ratschiller) — Thu, 28 Jan 2010 19:23:00 +0000

iPad Mini:
Hitler doesn't like it.
No women in the iPad team?
Big iPhone:
The real iPad:

Ten Things I Learned in 2009

noreply@blogger.com (Tobias Ratschiller) — Tue, 19 Jan 2010 11:06:00 +0000

Inspired by my friend Herve, let's do a review of 2009.

This was a very important year for me in many ways.

Most importantly, I became dad in June. In business, a big change was from pure domaining to site development.

Big lesson: When you switch to development, focus on building up revenue, not on selling your site.
Compared to selling domains with no revenue, selling developed sites with revenue is very difficult. Revenues and statistics need to be proven, there is limited capital on the market buying large developed sites, and end-user sales happen only if there is significant revenue on the site. We have largely given up trying to sell sites and concentrate on making money with them.
It's easy to build sites with a couple of thousand daily visitors. It's harder to achieve more organic traffic with repeatable processes.
The easiest way to monetize is still AdSense. Direct sales lead to much higher income, but require lots of effort and hand holding for customers.
I need to learn about more monetization options. For example our hotel bookings revenue sucks.
Becoming father is great for productivity.
Vienna is more fun than Bratislava (the girls are hotter in Bratislava, though. Since I'm married, I have to discount that factor).
SEO = getting back links (but I can sell you The Ultimate Guide To Get Your Site Ranked Number One for a special price, today only, of ~~$99~~ $49).
I read the Four Hour Work Week only to realize that I already spend less than four hours per week on admin/boring stuff.
I learned how to change diapers, that babies don't really speak until they are a year old, and that I can live with 5 hours of sleep.
Finally... I want to get tanned in December too!

Five Predictions For 2010

noreply@blogger.com (Tobias Ratschiller) — Sun, 03 Jan 2010 09:08:00 +0000

Five things that will happen in 2010.

The Apple tablet will be the most interesting tech product of 2010 and be the same to netbooks as the iPhone was to mobiles. Apple shares will go to $300.
The economy will linger. Even tough in fact 2010's numbers will be worse than 2009's, people will speak of a slow recovery.
New TLDs will continue to be a hot topic (even though the first round will only be introduced in 2012) and the expressions of interest will show that there is serious demand from businesses. Nonetheless, .com will hold steady and we will see similar .com sales as in 2009 and 2008.
The already very small domaining industry will continue to fade out as domainers move to development, startups, SEO, affiliate marketing, etc.
The days of search engines presenting a page with 10 links are over and gone for good. Search engines will aggregate more data in more verticals, which will rock some industries (hotel and flight bookings, comparison shopping, and a wide variety of content sites come to mind). I'm sure there will be plenty of opportunities in this, but sure as hell I'm buying a lot more Google and Microsoft stock this year to hedge.

Kicked Out of Sedo Pro and Happy

noreply@blogger.com (Tobias Ratschiller) — Sat, 31 Oct 2009 13:29:00 +0000

I am happy to report that I met one of my 2009 goals: The end of parking - unpark all of our 600 domains. I never liked parking and I figured it would be time to walk the talk, even if it meant giving up 4 figure revenue per month.

Instead of parking names, our goal was to develop sites that offer real value to visitors. Back into web development after a couple of years! And it's been going well, with growing visitor numbers on all sites.

The good thing is that the infrastructure that we used for our sites is scalable and can be applied to many more domains.

As intended, this was a year for ground work, and I expect at least the first half of 2010 to be the same.

A Declaration of Love to Our Industry

noreply@blogger.com (Tobias Ratschiller) — Thu, 17 Sep 2009 09:37:00 +0000

I have a deep passion for the software and Internet industry that started when I got my first computer 15 years ago. With all the stress due to the crisis, it's sometimes easy to forget why we are in this game. So here it goes: Ten reasons why I love our industry.

Because this is an industry where a few geeks can create something that affects millions of people.
An industry that brings out services with 300 million users in five years and three year old companies with a 1 billion Dollar valuation.
An industry with a creativity that is unlimited.
Where nobody knows you're a dog.
That inspires "an urge to make dreams come true and the tendency to miss lunch" (TBL).
And forces you to learn and adapt, with an obsession for the new big thing.
Because the barriers of entry for new participants get lower continually.
Because the world's smartest people work in it.
And still is most suited to generalists - versus rewarding specialists and narrowness.
Because one of its first books ended with "A future so bright you'll need to wear sunglasses" and the most important magazine declared a Long Boom.
And bonus reason: Because it brings people together, globally.

Working Summer

noreply@blogger.com (Tobias Ratschiller) — Fri, 24 Jul 2009 17:30:00 +0000

This is a good post by Sahar and reflects the sentiments expressed in my last post.

Indeed, for almost every entrepreneur I know, this is a working summer. Maybe a couple of days off, but not the 2 week vacation.

And that's good. Great businesses get built when you work hard. We see the first results of our labor. Advertising increase on average 50% per month on our sites. Traffic increase 30%. Revenue from the domain businesses increase 30% month over month.

That's just the start. We need to keep on fighting for every customer and Dollar we can make.

Time Management Troubles

noreply@blogger.com (Tobias Ratschiller) — Tue, 30 Jun 2009 15:02:00 +0000

Since I got a little baby daughter a week ago, I'm obsessing about time management.

My consulting company is almost on autopilot due to my fantastic team, and requires only financial monitoring and the usual rain making or memo writing. But we do have a few different projects that are time intensive mostly in marketing.

Before the birth of my daughter I used to work until 21.00 and then have dinner with my wife, read some books or watch TV.

Now, I would like to spend time from 19.00 on with my family (coincidentally, the little girl has an active phase then!). Somewhere, I also have to fit in my dog. :)

So, if I want to get my work done, I have to be more productive during the shorter day. This post serves to remind me of that goal!

I stopped looking at my Google Reader until the evening. I may even switch to read the feeds on the iPhone. I read quite a few feeds and I used to do it around lunch - but it's so unimportant really that I moved it to the late evening.
Same for news. I don't need news during the day.
I noticed I get pissed off when people show me the usual bullshit videos, funny pictures, and other nonsense. I started to just ignore these.
Facebook is a waste of time. I stopped going to it a while ago and switched to Seesmic Desktop, with notifications disabled. The business we get from Facebook is miniscule, so I'll just keep it at it.
Same for Twitter, but we use that for business.
I stopped using all IM except Skype.
Most "social" business meetings (networking, status updates, etc) can be moved to a lunch meeting.
I know I'm old, but my primary method of communication is email. I need to unsubscribe from all the BS mailinglists and newsletter that accumulated over the years and that I routinely delete today after a quick glance.

I work with a three monitor setup, having Skype on the left, my main workspace in the middle, and Thunderbird on the right monitor. I don't really use a note taking software - I tried Evernote but didn't get addicted. Maybe it's time to revisit that and to have it on a dedicated monitor.

Do you have any productivity tips for information workers?