internet real estate

PPC Ian has been very busy over the past few weeks! Not only have I been working harder than ever at my PPC career, but I have also been developing domain names in my spare time. The more domains I develop, the more my Google AdSense, Commission Junction, eBay Partner Network, and Amazon Associates earnings rise. In short, I’m on a roll and have concluded that my 2010 goal of developing six domain names sets the bar way too low! I’m proud to say that I’ve already exceeded my 2010 goal and am therefore raising my goal to 20 sites this year. Longer term, I’m looking to develop 100 sites and then 1,000. Today, I wanted to share my thoughts around domain names and especially the parallels between domains and real estate.

Domain Names Are Virtual Real Estate

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In my opinion, domain names are the virtual parallel to physical real estate, a simple yet extremely revolutionary concept. Just think about it: There are only so many great domain names out there. What’s a great domain name, you ask? Simple! Great domain names are keyword-rich. They are exact matches to highly searched phrases as judged by Google’s Keyword Tool Great domain names are typically on one of the major TLDs such as dot com, dot net, or dot org. Great domain names, like great real estate, get a huge amount of free traffic. Free traffic comes via type-ins or from the natural results on search engines. My personal conclusion: Keyword-rich domain names on the important TLDs are the virtual equivalent of real estate. We all know that wealthy individuals own a lot of real estate. Over the coming decades it’s my hypothesis that the next round of wealthy elite will be virtual real estate investors (and I’m personally investing in this hypothesis).

How do you select the best names? Find high search volume phrases (exact match) via Google’s Keyword Tool, preferably in verticals where the CPCs are competitive. Then, hand register the domains if possible or acquire them on the aftermarket from a site such as Sedo. I actually bought the domain IJL.net from Sedo a few months back. You may wish to check out my post about buying domain names on Sedo.

Domain Names Carry Property Taxes

Another very interesting parallel to real estate: Domain names carry property taxes. With physical real estate, you pay property tax to the county. With domain names, you pay property tax to the registrar (such as GoDaddy or Moniker). A portion of your registrar fee goes to ICANN, the Internet’s governing body. Forget to pay your property tax and you could lose your virtual real estate!

Real Estate Investments Yield Positive Cash Flow

Those of you who have known me for a while know that I’m a huge fan of Robert Kiyosaki. I have read most of his books with my favorite being Retire Young, Retire Rich. Robert Kiyosaki eloquently points out that real estate can either be a liability or an asset depending on cash flow. Basically, real estate that takes money out of your pocket (revenue is less than expenses) is a liability and real estate the puts money in your pocket (revenue is greater than expenses) is an asset. I apply this very concept to domaining. I don’t want to own domain names that are earning less than their registration fees. I only want to own domain names that are assets. My friend Jason from DNPimping.com recently highlighted this very concept in his article about registering too many domain names. The point: Your domain investments should yield positive cash flow.

Why Not Lock Up As Much Real Estate As Possible?

Synthesizing all of this, I have personally concluded that it makes sense to lock up as many domain names as possible. As long as I can develop them (or work with others to outsource the work) and at least break even, it’s worth buying more and more domains. At the end of the day, I want to own an absolute empire of Internet real estate.

So far, I’ve been mainly focused on cash flow from type-ins and SEO. That’s for good reason: I’m all about cash flow as a measurement of investment value. However, we haven’t even talked about equity value and other added benefits. The beauty of all of this: Domain names are an investment vehicle that has proven to also exhibit rapidly increasing equity value. This was never more apparent than seeing domains sell for huge prices at the TRAFFIC conference. Another benefit: I can always build out my domains into full websites, drive pay per click traffic, and make a fortune in the future!

Outsourcing Is Everything

So you may be wondering, how does this corporate PPC guru have time for all of this? That’s an excellent question! I actually don’t. Between excelling in my pay per click career, working out, spending time with my wife, updating PPC Ian, and living life, there’s very little time left. However, that’s why outsourcing exists! Thankfully, I have built some amazing relationships with writers, web developers, and domain development experts. My strategy: I’ll work closely with others to build out my domain names while adding my own finishing touches on top, of course. Here’s to accumulating my Internet real estate empire!