The ups and downs of the domain name business.
Domain investor and web site creator Eric Borgos just published a list of the domains he has sold in the first half of the year. It’s quite interesting and worth a read.
But I want to draw domainers’ attention to another page on Borgos’ site that has always fascinated me. He publishes his revenue and net profit by year dating back to 1997.
To be clear, Borgos develops web sites on many of the domains he owns. But the sales of some of these web sites aren’t included in his numbers, which he reports as being mostly from domain sales.
Take a good, hard look at Borgos’ numbers. What do you notice?
What I notice is that domaining isn’t consistent nor easy. We’re looking at just one domainers’ numbers, but I think it’s very telling.
After a great year in 2000 as the bubble was bursting, his company only turned a profit in one of the next six years.
How many of you would have stuck through those hard times?
In 2011 Borgos’ company had net income over $1.5 million, thanks in part to a huge portfolio sale.
But don’t call him a “lucky” domainer. He stuck through some lean years, worked hard developing web destinations, and after fifteen years is finally seeing consistently good results.
It’s a great story.
Eric Borgos says
Because I bought almost all my domains back in the 1990s and they steadily increased in value over the years, I don’t think I have ever had an unprofitable year with them. Any year I lost was money was due to all the other websites I was running, plus I was putting a lot of my profits back into expanding my business.
In times when I had negative cash flow, I sold some of my bigger domains to keep me afloat. Looking back I should have kept those domains (like insurancequotes.com for example) and found other ways to get money, but at the time it was hard to know if domains would keep going up.
Also, the income figures I posted are a little misleading because from 2000-2006 I was a C Corp so if I showed any profits I would be taxed extra so I paid myself any profits. I basically tried to pay myself whatever profits there were, but I had to do that before December 31st each year and my accounting was never done until a few months later so I had to estimate what my profit would be and then pay myself that amount, so my estimates were not always correct.
I don’t remember all the figures exactly but from 2003-2006 I probably just broke even at best and took on a lot of debt (credit cards, credit lines, etc.) to keep things going.
Andrew Allemann says
Eric, thanks for clarifying some of this and your numbers. It’s really cool that you disclose all this information.
Nice insight, Eric.
I invested much more than I made in domains in 2009, 2010, and most of 2011 (while the prices were beaten down) and now I am reaping some of the rewards.
It’s expensive to play the domain game anymore and you have to find opportunities now instead of filling your bag as fast as you can with domains if you want a nice ROI.
Prices have got nutty again so I am really pulling back hard, but still buying if I can get great deals. I’m mostly waiting for the next crash that’s coming to load up again.
Eric Borgos says
Yes, I have found in 2012 I am getting a lot of offers on my domains. Not crazy high offers for more than they are worth, but fair ones at least.
Same here, I am also getting more offers but don’t see much increases if prices offered.
Btw, where do you park your undeveloped domains?
I remember you were developing your own mini development system in the past. How did that work out?
Eric is a great man. He is so helpful, honest and very kind person…
He deserves all the best…
I have to agree, Eric is a good guy for sharing all this info with everyone.
Dot Com Realtor says
Eric thank you for sharing your story and keeping us all hopeful 🙂
Payroll Management says
I really like the transparency and simplicity of Eric’s site. One thing a lot of businesses could learn is that by using such simple, clear communication via their site, they’d pick up more business. The average web user now can see past ‘slick’ and they want clear, useful information. Also, as Seth Godin points out in his book ‘the dip’, it really does pay to know when to quit and when to stay in the game. So many domainers quit the moment things got sticky and I have no doubt they’ll be quitting something else soon, whatever it was they moved on to!
Stephen Douglas says
It’s amazing that your office is just a few miles from one of my homes in Oregon. What’s also amazing is that you and I fought head to head regarding “vanity emails” because that was my company’s direction in 2000, and you hired one of my best “buddies” who went to work for you and revealed our business plan. Ultimately, that business model went out the door for both of us!
Glad to see you staying afloat, and that we’re both still working hard to promote domain name values after over a decade of knowing each other.
I wish you the best, and when you’re up here sometime, look me up and let’s do sushi!
cheers Eric! You are a true VETERAN domainer with class.
Eric Borgos says
As we discussed in May 2010 when you posted a comment on my blog (http://www.impulsecorp.com) about the vanity email situation, you are confusing me with a different company. I was never in the vanity email business (and never had any interest in it) and I never heard anything about you or your business plan. After I questioned you some more about it you wrote this is one of your emails to me:
“..your name never came up, just your company’s. Bill’s name did appear, and J. Fil____ worked for him. You might be right on this one! Sorry bout that. It was about 10 years ago… i no longer have the emails from it.”
The only vanity email I was ever involved with was @bored.com which were free email address I gave Bored.com users, but was something that many big sites did, it was not a business plan of mine to make money, it was just to help make Bored.com a bigger site. I never at any point had plans to do emails on other domains.
But at the time I had an office suite in CA even though I worked from home thousands of miles away, so I had a business friend (Bill) manage it for me since he had an office in the same suite. He had an employee named J. Fil_____ and their company did a bunch of different things, and one of their plans was to get into the vanity email business. You told me J. Fil____ signed a non-disclosure agreement with you, but he was with Bill’s company not mine. If you look at that NDA I am sure you will see it has nothing to do with me or my company.
The reason you are confused is because Bill and I later did a joint venture together where he marketed plush animals for my Adoptme.com website (see that interesting story at http://www.impulsecorp.com/how-i-invented-a-product-and-got-it-sold-in-stores ) and we hired J. Fil_____ to help run it. But, Adoptme.com had no vanity email and nothing about that business involved vanity emails.
So, it was Bill and J. Fil_____ and their company you had a disclosure problem with, not me.
Also, in the same email exchange with you in 2010 I also told you how my address in Oregon is just a post office box not an office and I actually live on the East Coast and have never been to Oregon.
Stephen Douglas says
Yes, we did talk a year or so ago about this, but a lot of it was rushed, and I don’t think we ever answered some questions I had. I double checked though, and yes, a friend of mine worked for one of your companies (or associates “Impulse Communications” who you later connected with with Adoptme.com project. He wanted to buy my domain “VirtualPetGame.com” a few years later, and I actually thought the purchase would be made by you. Of course, this could be the poor, or “confusing” communications from my “friend”… I thought J.F. actually took over that “Adoptme.com” enterprise, according to him. He’s in China now, almost six years at this point, and seems to be doing well for himself.
It’s hard to remember all the details from 2001, so the above info may be off here and there — no need to waste time attempting to detail it out! I do rmember this: the rush to success we were all on… lol.
Your answer here cleared up the final questions, but I never had any ill will towards you — in fact, at the time, Bored.com was one of my favorite websites!
keep up the good work, and if you want to connect with me in the NW or SoCal, give me a ring and dinner’s on me!
cheers and much success, Eric,
Eric Borgos says
I was not involved at all with trying to buy VirtualPetGame.com and if J.F. was trying to buy it, it had nothing to do with me and he never mentioned it to me.
I contributed the Adoptme.com domain/website into the partnership with Bill and J.F. to sell the plush toys, and when that venture failed 3-4 years later I bought the site back from the partnership. Several months later J.F. than tried to buy the Adoptme site from me because he had Chinese connections who wanted to do big things with it with him, so I agreed to sell it to him if he could raise the money, but he was never able to get the money for it.
So, J.F. may have been trying to buy VirtualPetGame.com for the venture he was working on.
None of this has anything to do with the vanity emails business, which was something he was involved in before he started working on the Adoptme.com toys with me and was not related in any way to anything I was doing.
I know it is silly to worry about all of this 10 years later, but I just wanted to clarify it so other people don’t think I was involved vanity email problem.