A small section of the domain community holds the view that “geodomains” are a BIG opportunity area and the “right” development strategy can lead to big bucks. For market validation, the most cited example is that of PalmSprings.com, a property owned & operated by the Castello brothers, who’re de-facto poster boys of the Geodomain business. It is widely believed that PalmSprings.com generates annual revenues of over a million dollars (Yes, USD!). Incredible, IMHO for a rather rudimentary site with an unmistakable 90’s look. Sure, the business model is genius.
Other players in this business:
Dan Pulcrano (Boulevards New Media): LosAngeles.com, Seattle.com, Sanfrancisco.com, …
Skip Hoagland (Domains New Media): Atlanta.com, Portland.com, …
Nat Cohen (Telepathy): Maryland.com, Missouri.com, …
Each of the above mentioned business owns & operates marquee geodomains, with varying degrees of success. It would be fair to say that the geodomain space has not seen a BIG success story yet! In fact, if one is to benchmark the monies and ROI that domainers in the Domain-Parking / PPC space (the likes of Frank Schilling, Rick Schwatz, etc.) make, the payout and ROI in the GeoDomain space pales in comparison (with the exception of PalmSprings.com)
Do you see a common thread in the geodomain sites mentioned above?
They are ALL designed for a TOURIST, not the local RESIDENT.
There is an emphasis on Hotel bookings, tourism, etc. … which is good for non-residents seeking information, but there is very little on offer for residents of the city/state.
IMHO this business model has some major flaws:
1) Why would a majority of consumers prefer booking Hotel/Taxi on Atlanta.com instead of Expedia, Travelocity and the like? The online Hotel booking business is mature and consumers know where to go for travel deals & bookings.
2) For local residents, there is not a single use case to *return* to the portal: No compelling content, no compelling features, and a yellow pages directory not updated since the IRAQ war. (Ok, I just made up the last one!)
RETURNING visitors are the OXYGEN of an online business. If they dont return often enough, you’ve got some serious holes in your business plan. A good domain cannot be a substitute for a vibrant, loyal community.
So, should geodomain development be about creating content and compelling features to make the business model work?
The short answer: YES & NO!
SanDiego.com and Kelowna.com were geodomain properties in the top bracket. Aesthetically designed, rich in content, some cool features and they almost resembled “real” media properties. I gather that both portals had good traffic as (returning visitors) and decent revenues as well
A few weeks back there was some bad news:
- SanDiego.com and related assets are being foreclosed on
- Kelowna.com lays-off its entire editorial staff
Lessons learnt:
- It’s good to have quality, original content. Unfortunately creating quality content is an expensive affair.
- The media business is not just about content and features. Brand building & content marketing are important as well. Also, the media business has a LONG gestation period.
Bottom-line: Tourism templates (Denver.com) are not the best way to build out geodomain properties. Mimicking media companies (Kelowna.com) is not any better.
In the next part, I will share ideas that may work better. Stay Tuned!
PLUG! - Platform for building local (city) portals:
http://doublespring.com/localengine/
Tags: castello brothers, development, domain, doublespring, frank schilling, geodomain
[...] Shariff, founder of DoubleSpring Media (a web development company) got in touch on Twitter and pointed me to this editorial he has written about GeoDomain [...]
[...] Shariff, founder of DoubleSpring Media (a web development company) got in touch on Twitter and pointed me to this editorial he has written about GeoDomain [...]
You raise some excellent points and much of what you’re saying is spot on. However, until you’ve developed and monetized one of these major Geos you won’t know the full story because much of what you’re saying is from the outside looking in. Michael and I have been criticized many times about our sites. And every morning we cry all the way to the bank. Here are five things I’d like to point out:
1) Our Forums, Classifieds and Calendar of Events have a heavy local readership.
2) There are other Geos that gross more than PalmSprings.com. You can ask Frank and Rick and there is no parked site that comes anywhere close to what the top 10 US city Geos are currently grossing.
3) We worked really hard to make PalmSprings.com look that basic
In 1998 I decided that our priority was generating advertising sales and not graphic design awards. Our front pages have been called visual spam, but our advertisers love it. And guess who pays the bills?
4) There are at least three very important reasons why SanDiego.com failed. I tried to warn Mark Burgess many times (do you see many ads on his front page?). Mark is a genius and a purist - and he had SanDiego.com taken away from him. However, he never failed to remind me how “basic” PalmSprings.com looks
5) With the Geos we own like PalmSprings.com. Nashville.com, LagunaBeach.com, etc, we own the BRAND for these cities on the Internet. This has an immense psychological effect on our viewers that translates into an extraordinary revenue conversion factor. The only people who disagree with that statement are the people who’ve never owned one. These Geos have many inherent marketing powers that no other domain name will ever have. My suggestion is that you acquire ownership in a significant Geo such as a US city.com. Then you will know why someone would book a water taxi through Atlanta.com instead of Travelocity or Expedia.
I look foward to the rest of your article.
Some very good questions raised. I have over 40 geos that i want to develop and create a steady income from so any information about geo related sites are most welcome.
A very nice come back Dave.
David,
The real estate business has an ecosystem consisting of land owners, architects, agents, builders & contractors. Each party brings something to the table. An architect does not need to own a large chunk of prime real estate to demonstrate that he understands the business.
Most of us wish we could own “a significant Geo such as a US city.com”, but everybody does not have the resources to make that happen. The few who do own significant geos, believe they have it all covered … the question is: do they? and should others follow them?
If you owned a prime piece of land around Manhattan and you built a ONE Floor coffee shop, would you be a profitable business? OFFCOURSE you’d be profitable. Anybody can be profitable selling coffee, pizzas, pancakes at that location. Why? Because its MANHATTAN
Im sure you’d agree: If a business is about maximizing profits … The “ONE Floor coffee shop” is a bad idea. A twenty-floor office might be a better option.
Lets take the example of LosAngeles.com
- Newspaper: LA Times pays the salary of 660 people (its entire staff) out of revenues derived from only its “WEB” operations:
http://www.guardian.co.uk/media/2009/jan/12/la-times-online-advertising
The number is rumored to be $75 million
- Radio: Clear Channel CHR KIIS/Los Angeles was the #1 billing station of last year, bringing in $55 million.
http://www.fmqb.com/article.asp?id=1743493
You rightly assert that those who own a city’s .com : “own the BRAND for these cities on the Internet”. Should’nt LosAngeles.com’s revenues then be in the same league as the media properties mentioned above?
I have absolutely no insight into the revenues LosAngeles.com generates but I’d be pleasantly surprised if its even 10% of the two media properties mentioned above.
David, I have great respect for how you’ve built PalmSprings.com from a concept to an incredible business. I suspect that the nature of the geodomain combined with your sales & marketing acumen have made it possible. Its easier for people like me today to look at a business model, recognize its strengths, identify its weaknesses and come out with better solutions. It must have been really hard for you to build the entire model from SCRATCH … and make it work. Its not for nothing that the Castello brothers are recognized for being pioneers in this space.
I’d differ with your views on design … you said owning the pure city geo has “immense psychological effect on our viewers that translates into an extraordinary revenue conversion factor” similarly an aesthetic design creates a better user experience for visitors and has similar psychological effects
I cant see how it will make advertisers unhappy either!
@Shuhaib:
The problem with LosAngeles.com and the rest of Dan Pulcrano’s portfolio is that he literally has too much of a good thing. He owns 20 of the largest US cities and, in my opinion, will need to partner with established media in each of those cities to get them where they need to be.
If you look at some of our other projects like Bullion.com, Daycare.com, Manicure.com, Suntan.com, etc you will see that they are more modernist in their designs than our Geos. The problem with our Geos is that we monetized them first and quickly discovered that local advertisers were willing to pay top dollar to be on the prime real estate of the front page. Every re-design that someone has suggested has asked that we remove many of the the front page ads - which would be financial suicide. Believe me, Michael and I are always open to a re-design, but we need to protect the formula that has generated so much revenue for us.
[...] About « Geodomain Development: What works | What doesnt (Part-1) [...]
[...] Shariff, founder of DoubleSpring Media (a web development company) got in touch on Twitter and pointed me to this editorial he has written about GeoDomain [...]