Now, no bullshit here… but you said:

“The reality is that as each year marches on, the Internet becomes increasingly inundated with websites, blogs, social groups, games, virutal worlds, cruft, and more. Some of these sites have great content – and they will and do stomp on holders of lightly developed 2nd tier generic domains in that same niche.”

You also stated that content was more valuable than the domain in most cases where a domain is not performing.

The problem with your assessment is that the domain, in fact, is the BRAND, and should be memorable, preferably relevant to the content. That in itself makes the domain valuable IN RELATION to the content you put on the website. You can’t put up “123Balloonblowing.info” up as the domain name for a website telling how to find great whitewater rafting spots. The logic of that is plain. Maybe “123whitewaterrafting.info” could work with the content, but you’re still looking at a memorable brand to help you bring in and retain customers.

You can’t just build out a site and put content on it and then put a hard to remember, longtailed domain on it and say “what a success”.

If you can prove me wrong, I’d love to see you post three or four of your successful “no bullshit” domains pointing to those websites so everyone can see there’s “no bullshit” in what you’re saying. No disrespect intended.

I agree in principle – because we create, own, and operate hundreds of built-out websites. (Parking has always underwhelmed us re: revenue.)

I also agree with you about the value of brandable domains. I guess my argument lies in the whole “valuation” arena. What some people consider brandable, I consider junk. (Visited eBay lately? Afternic? Sedo? NameJet?) I’m amazed at what some people call “premium” domains. I’m confident that you know many fellow domainers who own many domains that are “weak” at best. These names are a drag on their financials and they hold onto them for some future domain monetization event or tool that will propel them to riches.

The dirty little secret is that if you have to build out your site *because the particular domain does not generate type-in traffic, then it proves that the “domain” by itself is really not all that valuable. The content is. (I can hear the shrieks now!)

By definition, people don’t find you via the name – but the content via search results or inbound links.

The reality is that as each year marches on, the Internet becomes increasingly inundated with websites, blogs, social groups, games, virutal worlds, cruft, and more. Some of these sites have great content – and they will and do stomp on holders of lightly developed 2nd tier generic domains in that same niche.

Google considers the Internet a cesspool and they have their battalion of PhD.’s working on ways to skim off the best and leach out the rest. (Read: Poorly developed sites and domains with no type-in value.)

We’ve run scenarios ad nauseum over the years that show us that one developed site in a niche generates un-matched revenue compared to dozens or hundreds of parked or lightly developed domains in that same niche.

And to add insult to injury, it doesn’t really matter what the domain name is for that developed site. The content and the domain name create (to the dismay of the hard-core domainers) a real brand.

I know it’s a very unpopular position to hold! (Spit shield down!) But I thought it would be fun to discuss.

You don’t know the future of domain monetization if you aren’t up to speed on the new platforms for domain development. A lot of companies with large domain portfolios are seriously considering or already sending “non or poor performing domains) to content building companies, such as WhyPark, Evo Landing, TrafficZ and AEIOU. I think the rapid growth in this area of monetization for domains will surprise you by the end of the year or sooner.

Why? Because 85% of keyword generic domains still don’t get “typein” traffic from the normal PPC monetization model. However, these domains still are too valuable to just let expire. So, either sell, or build. This isn’t DBS “covering their posteriors”, this is just good business.

If any domainer owns domains that don’t perform under the PPC model, but still carry a great brand or generic description for a niche, then buildouts are reasonable, or selling them for a profit is reasonable.

I don’t see anything in DBS’s financial strategy that indicates they’re making mistakes.

DISCLAIMER: I am a Fabulous.com client, and the VP of BD at WhyPark.com.

Coming from the corporate publicly traded world, I have a completely different take on what DBS is really saying about domain valuations in their annual report.

Their #1 goal is to maintain shareholder value. There is a big squeeze going on behind the scenes. They are loaded to the gills with “assets” that are really considered (in an operational standpoint) as cost of goods.

Their huge cache of domain names that do not perform on a yearly basis absolutely kill the financials – and I’m sure many (shareholders) are wondering why in the heck they are hanging on to these “assets”.

In my opinion, they are rationalizing and justifying the model to keep the wolves at bay. Much of the rationalization can be duplicated by market data acquired by other means – all of which would never require them to hang onto a mountain of poorly performing assets.

Sure, I understand the lottery aspect of hitting big with a few domains. But let’s face it:

1. They have this data already via Fabulous.com’s customers.
2. If their data mining was effective, then they would be able to identify the winners and trim the losers from their portfolio. The argument for holding a huge portfolio goes out the window.
3. Single digit percentage sales on a huge under-performing portfolio would not be acceptable to me as the ceo.

Just my take. But then again, I have a nose for people writing to cover their posteriors.

Obviously I believed them since I use them and rate their services highly. However, my warning to any domainer is “don’t leave domains you want or are considering in a registrar’s shopping cart”. You never know who is tempted to buy what if they see your intelligent reasoning. Either buy the domain or delete it from the cart (although even deleting it may not clear it from the database).

A good domainer should be able to search for a domain OOTB, and buy it immediately if it’s available, especially if their gut and head say “good buy!”

This comment is not to demean any registrar, especially the fine folks at DBS. It’s just meant to teach anyone investing in a high-yield “guess” to either go for it, or remove it from the record.