I'm an entrepreneur through my company Senza Limiti. We build, buy, operate and monetize websites.
My wife is Alicja Ratschiller (alicja @ ratschiller.com) and our kids are Lea and Benjamin Ratschiller (without email until they learn to type properly).
I've been dealing with software, web applications and domains in start-up environments for the past fifteen years, mostly as technical lead, consultant or founder.
In a prior life, I created the initial version of Open Source tools such as phpMyAdmin or phpAds that are now, thanks to the great teams behind them, used by millions of people.
Today, I am back to trying to create interesting things on the Web.
Domain investing and trading.
Investing in domains and operating online properties from launch to exit.
Enterprise tools for web application development.
IT Consultant advising corporations on web technologies, content management systems and large scale web deployment. Clients included Ford Motor Company, BP, Deutsche Bank and ADIG Investment.
Co-Author “Web Application Development with PHP 4.0”.
One of the first web agencies in Italy.
[ This post is part of a short series on Buying and Selling Websites]
[ This post is part of a short series on Buying and Selling Websites]
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.
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:
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.
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.
... 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);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.
$rand = mt_rand(1,2);
if($rand == 1)
{
// serve AdSense channel A
}
else
{
// serve AdSense channel B
}
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.
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 |
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.
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.
I just posted a commentary on iPad usability on iPadManiac.com.
Thanks, Apple, for throwing us back to a beautiful 1999.Read the complete post.
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.
While working on our travel sites, I came across these beautiful pictures of South American landscapes.
1 Machu Picchu
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.
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.
... 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:
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.
Five things that will happen in 2010.
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.
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.