Interesting, but I think he's way too late to that party.
These short, generic domain names (like perfume.com) had some value 10 years ago, when Internet search was still much more of a chaotic crapshoot.
Today, you could practically run a thriving ecommerce site from just a static IP if you spent a little bit of time on SEO. People go to google, type in "perfume" or "buy perfume" and go off to either the text-ad sites, or the top organic results.
Users have been trained on the idea that "domain guessing" is hopeless, and more than likely to land you on a pr0n site or ad site (like those domains are currently configured).
Also, for many of these e-commerce related sites, there is a large percentage of people who are looking to buy perfume+something else. If your site is so tightly optimized around 1 product class, I think you'll lose a lot of business to people who want to buy 3 products from 1 vendor, not 3 products from 3 vendors.
IMO, the majority of these domain squatters have so thoroughly skewed or ruined how people find products of interest that they have no hope of suddenly turning things around by turning these domains into what they should have done from the beginning.
You're going to cite a USA Today article as some sort of conclusive proof of your argument?
The "value" is perceived, often by people who have no idea what they're doing (much like the examples in your USA Today article).
This is a lot like the "value" of various antiques, where antique dealers constantly buy and sell pieces amongst themselves. Did you hear the joke about the 3 antique dealers trapped on an island with a single King Louie VIII chair? They all managed to make a living...
Although it didn't break it down further, the article said that the other 24% of people trying to get to Google "...either completely failed to get to any search engine or ended up running their query on a different search engine". So, some of that 24% were able to execute a search, just not on Google. Let's be generous and say 10% used something else (like the MSN search that comes up by default in IE).
My personal non-scientific experience is that users who are so internet-clueless are also e-commerce-phobic... They won't put their credit card and personal data "into the intarweb". So, the value to a retailer of this group of folks that can't master ANY search engine is probably much less than the cost of developing and promoting these sites based on such great domain names.
Now that's a good point I hadn't thought of! Hmm. OK, now I'm less optimistic about the Auctomatic deal. [that wasn't sarcasm, that was sincere]
I think the Plenty of Fish model (lots of traffic, high priced sponsorship ads and affiliate links to more targeted or efficient sites) is a better bet for high value domain names, given that characteristic that you pointed out about the people unable to find a search engine. They might not know what they're doing, but you can be darn sure they click on ads!
[Sigh] I didn't feel like digging around for the better articles out there that I've read so I grabbed the one linked to in Wikipedia. Serves me right for being lazy.
Monetization techniques are improving (Auctomatic might be the next step?) but even just with AdSense they still bring in a lot of money. Factor in the minimal effort required to milk them for cash and increasing resale values and they become very attractive investments.
Yeah, well a lot of SEO people are just parrots who repeat what they've heard.
Does "Amazon" equate to a massive multi-product marketplace somehow? How about "ebay"? "Flickr" is so much like "photo hosting" that you can see why they're such a popular search result. And so on.
Having key search terms in your domain name lends a tiny bit of weight to the overall result ranking. The link text, page title and H1 tags will do more for you though. So will text in the url itself (www.foo.com/these-are-my-keywords).
All valid points on the SEO stuff. One thing to keep in mind is that the age of the url is important too.
One thing I would point out is that everything else being equal a good domain name will generally get more clicks. The higher CTR will eventually lead to higher results in both the natural and paid results. A good domain name is also important for branding and other forms of advertising.
I am not going to remember an IP address unless my dork quota hasn't been met that week.
"each site will cost him between $1 and $3 million a piece" - are you kidding me? Just to build it out? Wouldn't you build a "test" site first before you invested a million dollars?
Buying up vast amounts of prime real estate in an extremely overcrowded town and then wasting the property just to earn pennies a day while others desperately need it is not squatting either, huh?
the domains were bought almost 10 years ago. Geoff has only just joined and immediately
y stopped the trading/squatting and started putting together a team to build products that leverage the domains. Hence the re-branding.
A farmer creates something. What do you create? You happened to be the first person to think of registering a certain domain name, and won that lottery. Well done.
These short, generic domain names (like perfume.com) had some value 10 years ago, when Internet search was still much more of a chaotic crapshoot.
Today, you could practically run a thriving ecommerce site from just a static IP if you spent a little bit of time on SEO. People go to google, type in "perfume" or "buy perfume" and go off to either the text-ad sites, or the top organic results.
Users have been trained on the idea that "domain guessing" is hopeless, and more than likely to land you on a pr0n site or ad site (like those domains are currently configured).
Also, for many of these e-commerce related sites, there is a large percentage of people who are looking to buy perfume+something else. If your site is so tightly optimized around 1 product class, I think you'll lose a lot of business to people who want to buy 3 products from 1 vendor, not 3 products from 3 vendors.
IMO, the majority of these domain squatters have so thoroughly skewed or ruined how people find products of interest that they have no hope of suddenly turning things around by turning these domains into what they should have done from the beginning.