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10|10|2007 06:19 pm EDT

Domain Strategies launches new Domain Development model

by Frank Michlick in Categories: Domain Development, Editorial, Featured, Interviews, News

Domain Strategies LogoDuring the Targeted TRAFFIC conference in Florida which started yesterday, a new kind of Domain Development company called Domain Strategies is being launched. The company will bring together domainers, investors and entrepreneurs in order to create businesses. Rob was so kind to take the time to talk to me about his new venture earlier this week.

Frank: Thank you Rob for joining me on this call today and for telling us more about your new venture Domain Strategies. So tell us what does Domain Strategies exactly do Rob?

Rob MonsterRob Monster: Well Frank, thank you for hosting. Domain Strategies is focused on creating a marketplace that brings together domain owners with visionary entrepreneurs with capital sources. The essence of what we are bringing to the table is to enable domainers who are sitting on valuable property to unlock the unrealized potential of these domains by creating real businesses that are run by real entrepreneurs and backed by strategic capital resources. Historically, and even presently, a real challenge has been to enable domainers to create liquidity. Conventionally the methods that are available through parking products as well as through domain auctions, don’t provide the retail level valuations that these domain owners recognize that these domains are worth.

Frank: Rob, basically you are planning on taking domain development to the next level by not just developing sites, but a real business based on a domain.

Rob Monster: Yes, that’s right Frank. We have some recent experience in partnering in the development of high value domains: Healthcare.com, where I am Chairman of the Board and also Patents.com, where I am also Chairman of the Board, and in a partnership with Internet Real Estate Group. Based on these experiences, as well as others that are not yet announced, I am confident that the approach of taking a parked domain and turning it into a business, is a replicable concept. What I think is important though is to differentiate between this approach and say, an incubator approach. We are not focused on, for example, using exclusively in-house staff to build out every concept. That is in fact where many of the traditional domain developers have failed. They put together a site based on their limited subject matter expertise, as opposed to taking a fully benchmark world-class approach as if it was their only business. I believe that for every domain there is an ideal visionary entrepreneur and an ideal source of capital. Assembling those constituent parts and putting them under the banner of an A-level domain name is really what creates a game-changing business. It is not enough to have an A-level Domain Name if the product that is beneath it is B or C level in its execution. So we intend to take this approach of assembling constituent parts to create A-level business that compete on a world-class level and can essentially deliver on the promise that will be inherent in a high value domain.

Frank: Okay, that sounds great Rob. I’m just trying to envision the process — So let’s say, I own some high-profile domains and I come to you. I submit the name with a proposal or something like that and you help me to find the right people through run and finance this business, is that correct?

Rob Monster: Yes that’s right. So in our typical approach we work in a consultative capacity for a particularly high-value domain. That domain may or may not have any existing content on it. We do not charge a fee, at least in the cash sense, for providing this. We are rather compensated in the form of a minority equity interest, typically in the range of 10%, for creating an equity entity that can leverage these various component parts in building a truly compelling value proposition. I also run a venture capital firm called Monster Venture Partners (MVP) that in some cases will invest alongside other potential capital sources in any given deal. The affiliation with MVP does not presuppose that Monster Venture Partners will invest in every deal. To the contrary, the assumption is that for every deal there is an ideal capital source and that the idea capital source may or may not be a venture firm that I am directly affiliated with. Nevertheless, we do know the various capital sources out there, not just venture, but also debt, and can bring that perspective and knowledge of sources of capital, both domestically and globally to a given venture.

Frank: That’s great. Now Rob you’ve already answered my next question, which would have been “what’s in it for you”. Let’s talk about something else you mentioned earlier – Healthcare.com. What exactly are you doing there at the moment?

Rob Monster
: Well, Healthcare.com is a great case study. You know, a year ago, it was a a parked domain name acquired and incorporated by two visionary entrepreneurs, Matias de Tezanos and Jose Vargas who previously had success in building Internet businesses that have been sold to Interactive Corporation and Fox Interactive respectively. Yet, they didn’t have a lot of Domain expertise in healthcare. I joined the board in April and in the meantime Healthcare.com has assembled a solid management team, an advisory board, has launched its beta products, and will shortly launch the full commercial version of the site. We are also in the final stages of securing an investment at a valuation that is materially higher than where it was earlier this year when healthcare.com was still in concept stage. So healthcare.com is shaping up to be a very exciting success story in the $6 trillion global healthcare economy, and is doing it with a fully novel, product approach that is comprised of a global care provider directory and also a global search engine for health care and wellness content. Healthcare.com is also able to leverage a number of my other affiliations and investments in the capacity of Monster Venture Partners, most notably a company called World Lingo, which is a leading provider of machine translation technology. They have got 12 million unique visitors, who are often translating complex technical documents. This technology is being leveraged in the context of healthcare.com where healthcare.com will be one of the first, if not the only content provider for health content that is delivering highly accurate translated results for health-related content. So you can imagine a health care consumer sitting in say Japan or Thailand or Latin America looking to get information about, say diabetes and smoking cessation. That content, particularly for more obscure conditions, will not be available in their native language. Being able to tap into content in their native language is a huge benefit that is not provided by any existing provider. This is a good illustration of bringing world-class capability together with what is obviously a world class domain name. You really have to create a game-changing value proposition that matches up with the outstanding domain name itself.

Frank: I actually like the global approach, it’s a great differentiator. Especially in health care you will today find that businesses are still very local when it comes to health care and even the information that we can find is very local. So, if I have an illness or ailment, it would be a great advantage to be able to access global information about it. So users can actually profit from research that has been done elsewhere, information that would not otherwise have been available.

Rob Monster: Yes. Exactly right.

Frank: You mentioned patents.com earlier. That is a property that is owned by Internet Real Estate, is that correct?

Rob Monster: Yes, that’s right. In fact, concurrent with the announcement of Domain Strategies, I am also pleased to announce that I joined Internet Real Estate Group as a partner of the firm. In that capacity I will support current efforts to launch Patents.com. Most notably, last Monday, we closed on the acquisition of an operating company called PatentMonkey.com. The company is based in D.C., about two and half years old, and has developed some pretty novel products, some of which are launched and some of which are still under development. That will provide functionality that will fit into the new Patents.com web property, which we will launch in the middle of November. Concurrent with that development, there’s also been, once again, progress on the localization front where World Lingo, a company where I serve as a Director, will take the lead in translating some 30 million digitally available patents into 15 different languages, creating more than 450 million source documents for indexing by search engines. And once again, that is a scale of functionality and capability that is unmatched in the marketplace today. The strategic affiliation with WorldLingo creates a unique opportunity to bring superior functionality to a very global economy, which in this case is the market for intellectual property.

Frank: It looks to me like the relationship with Internet Real Estate is just getting started, especially if you look at your plans for Domain Strategies. So I assume you might be developing additional domains from their portfolio? And as I know you also have your own domain portfolio, will those names be developed as well?

Rob Monster: Yes, that’s right. I personally control about 5,000 domain names and Internet Real Estate Group controls some 600 plus domain names, some of which are listed on the Internet Real Estate Group website. We obviously can tap into those domains and in the same manner as I’ve previously described to you in the context of Healthcare.com and Patents.com. But more importantly we are about reaching out to the domainers around the world and starting the dialog with individual domainers who have high value domains that can be developed, and are looking for assistance in creating world-class companies that can leverage those domains. We have clearly identified that there is a need to bring together domain owners, and entrepreneurs and capital sources in a convergent manner. In many cases, the entrepreneur, him or herself, may or may not have the capital to pay that individual domain owner what they believe is fair market value for their domain. So here is a path to creating meaningful liquidity, quite possibly, with much greater leverage involved in the event of a sale of a domain for cash.

Frank: One of your first new hires at Domain Strategies is down at the Traffic show which is starting tomorrow as well?

Rob Monster
: Yes, that’s right. Part of what we have done in forming Domain Strategies is to acquire a company called DNFolio, led by Jeff Kubarych based in Greenwich, Connecticut. We’re also actively looking to bring together other firms that are experts in developing domains. So, Jeff is representing the company at the Traffic conference. We are very keen to start the dialog with individuals who may be represented at the Traffic conference to the extent that individual domainers are looking for assistance in development of the domain. But look for Jeff (jeff at domainstrategies.com). He will be attending the conference starting on Tuesday the 9th.

Frank: So, after the conference, how does somebody who has a domain portfolio and wants to submit some of those names to work with you, how do they do that?

Rob Monster
: Yes, go through our website, DomainStrategies.com. There’s a place in the website where you can submit the list of domains for review and then we will get back to you promptly with an assessment of which domains are developable. Important to note that we may not take every domain for promotion on Domain Strategies. As an alternative, the affiliate division DNFolio, which is now a wholly-owned operation of Domain Strategies, can promote names that may not be of the top tier, but may have a development potential. Domain Strategies focuses on the mid and the high end of the domain market, DNFolio will focus on the lower end on the development side. So individual domains that may or may not be suitable for forming entire companies around, can still be developed or sold to a retail buyer.

Frank: So you have got all the areas covered for anybody who wants to investigate development. How exactly do you go about finding the passionate entrepreneur to build the domain into a business?

Rob Monster: Yes, that’s a great question, and all I can say is that because of my history in building companies myself, and being connected to a community of successful entrepreneurs, I think I have a pretty good network and have an ability to identify talented leadership that can be brought to bear on an individual opportunity that may emerge. So, I would say that it’s validated and proven through the history of past developments that have been successfully developed and launched.

Frank: Thank you so much for sharing all of this information with our readers. It sure sounds like an interesting venture, I wish you lots of success with it.

I think that’s all that I have from my side, is there anything specific that you would like to mention before we end this interview?

Rob Monster: No, Frank. I think you’ve done a great job and love what you are doing with the publication and look forward to continuing to track your progress. So, thanks for providing such a useful public service.

Frank: Thank you so much for taking the time to talk to me today and I am sure we will be revisiting soon to see how things are developing.

Rob Monster: Thanks Frank.

[Domain Name News exclusive]

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11 Comments

Dan

October 11, 2007 @ 6:51 pm EDT

WOW!

One of the best things I have ever read about the Domain business.

Thanks for a great interview Frank!

BTW: Domain Name News new look is also very nice!

Peace!
Dan

Frank Michlick

October 11, 2007 @ 7:08 pm EDT

Thank you Dan for your kind words.

I think in general new services like this are a great way to move the industry ahead, and also provide better value to the internet.

Scott

October 11, 2007 @ 7:30 pm EDT

Frank,

Kudos on the interview! I hope you don’t mind, but I featured the entire article here on my new blog at http://onspec.typepead.com.

I must have been one of the first to submit a list of domains to them for consideration.

Keep up the great work!

Scott

Frank Michlick

October 11, 2007 @ 7:41 pm EDT

Scott,

Thank you for featuring my article and for the kind words. Could you please add a link to the original article to your blog?

Looking forward to seeing you again at the next DomainerDinner in Toronto.

Thanks,
/Frank

Steve M.

October 11, 2007 @ 8:59 pm EDT

Great looking site; nice job indeed.

Even used the back button to be sure I’d reached the correct site.

[…]More on the strategy from DomainNameNews, which has a Q&A with Monster.

Anonymouse

October 16, 2007 @ 12:45 pm EDT

I suspect people should read this entire page (mostly the comments section) before jumping into bed with Rob Monster:

http://blog.seattlepi.nwsource.com/venture/archives/117037.asp

Frank Michlick

October 16, 2007 @ 1:18 pm EDT

Anonymouse:

Where those comments written by you? It’s unfortunate that you would not reveal your identity, what’s there to be scared of?

Anonymouse

October 16, 2007 @ 7:05 pm EDT

The comments were not written by me. I am a domainer who is interested in working with these guys, so I did some research. If you look about, it’s not the only controversial stuff written about Monster.

Bob

October 16, 2007 @ 7:43 pm EDT

This site is looking great, I like the new layout, good job!

Frank Michlick

October 16, 2007 @ 8:53 pm EDT

Anonymouse: Thank you for the clarification. Of course everyone should always research who they work with. Another truth to keep in mind that where there’s success, there’s usually jealousy. Domainers certainly know all about it.

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