Search Featured: Rick Schwartz

Mike Dammann: How did you get the idea to start the T.R.A.F.F.I.C. Domain Conference and Expos and how close are you to the search engine industry?

Rick Schwartz: It started as a 12 person get together at my home. When 35 wanted to come I hooked up with my Attorney, Howard Neu, and decided we needed a venue other than my house and an agenda of activities and discussions. When 135 signed up we got THRUST into the convention business. 6 months later we held our second TRAFFIC show in Las Vegas and this time 235 showed up. By the time we have another show in Florida a few months later, we were 350 strong. So it was never planned, it was needed and we just took the ball and ran with it.

After 10 shows we have established ourselves as the key event in the space and thousands of domainers and investors have come to one show or another.

As for the search industry, it is an industry having more and more in common with domain owners. In our show in May in Orlando we will have at least one SEO panel and in future conferences even more as our channels overlap more and more.

Mike Dammann: Rick, you have recently made your last blog post and announced that one of your main projects will be Property.com.
Are you getting more involved in the development process?

Rick Schwartz: Very much so. Property.com is one project, however the project I am going to put a lot of effort into is Widgets.com. Probably by the time this is published, the site will be up and running. I have put a team together that shares the same vision I have and want to make Widgets.com a very valuable Internet business. It is based on a very simple idea that will allow it to grow virally in a very quick and special way. We are going to tap into some of the brightest minds in the world and run contests that will bring widgets to a new and profitable level. Until now folks made widgets, gave them away for free and that was that. We are going to change that and in the process transform this channel into a profitable money maker.

Mike Dammann: One of the domain names I remember that you’ve owned was men.com which you have since sold, is a part of the reason for you selling it that you want to move away from the adult industry?

Rick Schwartz: Hell no! I sold Men.com because I got a $1.3M cash offer. I have never ran from the adult world. The adult industry has always been YEARS ahead of mainstream. When there was not a penny to be made in mainstream, millions could be made in adult. Yes, I know there is the stigma about adult. However nobody seems to care that all the big hotel chains make more profit selling dirty movies to their guests than they do anywhere else. Sex sells. Always has, always will. It surrounds us. The “Wall” between mainstream and adult on the net is the silliest thing I have ever seen. In the real world no such division exists. Proof is the hotel example I gave above. The adult world has always been ahead of the curve. Going as far back as the VHS or 900 numbers or even streaming video. It is the adult industry that pushes technology forward in many cases.

In my case I own many adult domain names, however I have no adult sites and no adult content. I leave that for others. I just supply the eyeballs. I think certain industries are missing a HUGE opportunity to target those eyeballs, increase their market share and find their demographics. Liquor companies, beer companies, cigarette manufacturers would do very well. Their target audience is sitting right there. But this silly wall and those on Madison Ave are preventing these companies from tapping into a gusher of new business. Just plain shortsighted. Imagine, when I go into the titty bar, their signs and brand are everywhere. They have yet to make the connection online. Shortcomings like these are why I am so bullish about the future of domain and the internet. Because in time they will figure it out. When they do, that unlocks a lot of new $$$ flooding into the market. Some of these companies will sponsor music and concerts that encourage you to kill your family or other violent behavior or other such nonsense but would not advertise on adult sites? That’s more than hypocritical. It’s uninformed business and it will take a recession to wake them up.

Mike Dammann: Being in the SEO industry, you always have the pressure to get and keep your websites ranked. Obviously your domain names and the domain names of your friends do provide a large amount of type-in traffic. How much of an additional push do search engines provide you with and how much time do you spend on studying the search engines?

Rick Schwartz: Very little to be honest. Let me go back. The ONLY reason I started to buy domain names is that I did not have the talent or the smarts to get search engine traffic. I had to look for an alternative way to get traffic. So I went in the back door. I KNEW about “Human behavior” via my involvement with Toll Free Vanity numbers. Those 800 numbers that spell things. I got in that industry at the tail end, but I was able to make the connection that if people surfed 800 numbers to spell things, and they did, that would be even better on the Internet. So I bet there would be a parallel and I was right. So I was late to one party and right on time for another party. Of course a lot of this was theory when it came to the net until I got Dick.com. That was a REAL turning point. I paid $100 for the domain. When I activated it, I made $200 the first night and since then it has pumped out hundreds of thousands of dollars. Now approaching $1m on this single domain. That led me to buy others like ass.com, porno.com, voyeur.com, orgy.com, sexo.com and many others. Those domains I just listed cost me about $80k. Folks thought I was insane. Crazy. Had more dollars than brains. The search guys really hated me. they did not believe in type in traffic back in 1997. It was as if I was cheating. But there was no denying that those few domains were getting 50,000 daily visitors and were making thousands of dollars a day. All along I would take my earnings and invest in mainstream domains even though at that point in time there was no way to monetize them. I knew in time that would change and that mainstream would be much bigger.

So if not for my ignorance, I would have never done so well. Like they say….”Ignorance is Bliss” and I am living proof. Sometimes the less you know can pay big dividends.

Mike Dammann: One of your keynote speakers at the Miami Convention was Steve Forbes. How much of an open-mindedness have you witnessed from Wall Street and major business moguls and how much of an impact do you believe you have on each others?

Rick Schwartz: Having Steve Forbes coming to speak at TRAFFIC was a great moment for the entire domain industry. He understood domains in seconds and for years before he ever met us. He was able to make the connection between the real world and the virtual world long before most. When he spoke about Forbes.com there was no doubt that he understands the net inside and out. He too was a pioneer as Forbes.com went live in 1995 while his competition was yet to get it. Steve articulated a challenging future for domain owners as he tied the sins of the past to the sins of what is yet to come. As domains get more valuable and even become priceless, predators will do everything in their power to STEAL what you have. Laws, lawsuits, whatever.

As for Wall Street…they get it. Venture Capitalists showed up at TRAFFIC in mass. But they are also looking at things differently. They basically have a 5 year window to get in and out and make a killing. That’s a tough road to hoe when the time frame as I see it is more like 20 years.
We also had back and forth with Madison Avenue advertising agencies. For the most part, they just don’t get it. The ones that do, don’t want to talk about it. They don’t want to share their successes. But one only has to look at Baby.com owned by Johnson & Johnson, Loans.com owned by Bank of America, Books.com owned by Barnes and Noble. Disney, Proctoer and Gamble, others. But NONE of the ones that “Get it” are willing to talk.” They don’t want the others to figure it out so I don’t blame them. Their counterparts meanwhile are so blinded by “Branding” that they lost sight of the FACT that the ultimate branding is MORE SALES. When corporate America or any business goes to Madison Avenue it IS for branding. But it is also to do more sales. MORE SALES. When a Madison Ave exec shrugs his shoulders to “More sales” I think he is doing a great disservice to his client. I have an extensive blog post about Madison Ave. Those guys should read it everyday until they wake up and figure it out.

http://www.ricksblog.com/my_weblog/2007/04/how_madison_ave.html

Mike Dammann: Let’s say you don’t own any domain names. You know what you have learned in the past few years, but nobody knows who you are and you have limited resources. Where would you start to get into the domain business and which personal mistakes would you avoid making this time?

Rick Schwartz: 1. Stay with dotcom
2. Focus on domains from $50-$1500
3. Make sure it is easy to spell and easy to remember
4. Make sure it MEANS something. 4 words just stuck together does not make a domain name.

The single biggest mistake folks make is getting a .net and not owning the .com version. If you base your business on a .net, chances are ALL that world of mouth traffic will end up on the guys site that has the dotcom version. You will make HIM rich. Additionally, if you were to advertise on TV or radio etc, you would again lose about 25% of your traffic to the other guy. So you basically just hand over 25% of all the dollars you spend and all that effort you put in to your competition. That makes no sense. You end up growing his company more than your own because he did not spend a penny to take advantage of your efforts. This is probably the biggest sticking point with the search industry. They just don’t believe it. They are right in the sense that search engines does not make the distinction between a .net and a .com. However they are 100% wrong when it comes to advertising as I described above.

Mike Dammann: The last word is yours. Is there anything you would like to announce, get off your chest or share with our readers?

Rick Schwartz: I think while the search industry and the domain industry were once diametrically opposed to each other, that is no longer the case. Domainers and the SEO industry have a lot in common and both groups can help each other make more money and that is what it is all about. As this development phase kicks in, the search industry will find out they can do very well with an expanding domain industry. Every domainer I know is seriously looking to develop and expand their prime properties. What few don’t know is that domainers can make decisions on the spot and have the funds to pay the bills and can be great partners with search folks. I always hear the comment from search guys just how easy it is to work with the domain industry. Fast decisions, quick payments and repeat business. A real trifecta!