Unique Content and Category Killer Domain Names – with Michael Castello

If you are thinking about starting your own geo-domain property, you should take notes from one of the best in the industry, Michael Castello.

In this interview, Castello walks us through how he purchased PalmSprings.com; how he and his brother run their company, Castello Cities Internet Network; and how you too can build an advertising-based destination website. Many secrets to their success, as well as novel sales tactics, are revealed in this must-see show.

Interview (70:42): Watch | Listen/Download Audio | Sponsors | Key Take-Aways | Read Transcript

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About Michael Castello

Michael Castello, CCINAn Internet Development pioneer, Michael Castello is the co-founder, Chief Executive Officer and President for the Castello Cities Internet Network, Inc. (CCIN).

The CCIN portfolio features some of the most recognizable Internet brands in the world including Adopt.com, Nashville.com, Bullion.com, Cost.com, Acapulco.com, Rate.com, Whisky.com, Kennel.com, PalmSprings.com, Manicure.com, LagunaBeach.com, Traveler.com and Daycare.com.

In 2008, Michael and his brother David were inducted into the Geo Hall of Fame at the Geodomain Expo in Chicago.

Sponsors of This Interview

DomainTools is the recognized leader in domain name intelligence, providing a powerful set of research and monitoring tools built on the industry’s freshest data. DomainTools offers the most comprehensive collection of domain name ownership records in the world. Over 1 million members rely on DomainTools to protect and grow the value of their web sites, their domain names and their intellectual property on a daily basis.

David E. Weslow, Attorney at Law – provides legal representation for clients ranging from individuals to Fortune 500 companies in relation to domain name transactions and disputes, trademark and copyright claims, and web hosting and content liability issues. A former software and web developer, he regularly assists clients with cutting-edge issues involving law and technology.

Page2Sucks.com provides the SEO advice you need to take your developed domain name from page 2 (or worse) to the first page of organic search results on Google or Bing. Ask questions and receive answers within 24 hours. Build long-term value – and generate monthly EFT paychecks from Google – by search engine optimizing your domain name websites.

Three Take-Aways From Michael Castello’s Interview

  1. Geo Opportunities Are Not Gone
    Top-tier geo-domains of destination cities – like Seattle.com, PalmSprings.com and Hollywood.com – are not available…or at least not for a reasonable price. Go for the next level destination sites. Is there a great town outside the top-tier location that has proximity (within 100 miles) to the larger destination, that has activities, culture, or another major attraction? Draw off of the major destination city/site to your satellite city/site.
  2. Build a Great Business Off a Great Name
    The market is going to become more saturated over time, with more businesses coming online every day. An industry-defining domain name will put you above everyone else, and make it much easier for you to differentiate yourself. $25,000 on a domain name to start up a business should be something that most companies should be willing to spend, especially on a brick and mortar business.
  3. Start Selling the Low Hanging Fruit First
    There are going to be sales opportunities in every city, you just need to figure out where they are. Most of the time you can focus on the big three: hotels, real estate and activities, like golf. Focus on what your city is best known for. In Nashville, focus on music; in New York city, focus on Broadway shows.

Michael Castello Interview Raw Transcript

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Watch the full video at:
http://www.domainsherpa.com/michael-castello-ccin-interview

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Here’s your program.

Michael Cyger: Hey everyone, my name is Michael Cyger. I’m the publisher of DomainSherpa.com, the Domain Name Authority and the place where you can learn how to become a successful domain name entrepreneur directly from the experts themselves.

Take the most premium geographic domain name, like PalmSprings.com, Nashville.com, Alcapulco.com, mix them with the most premium generic brandable domain names like Whisky.com, GolfClub.com, Traveler.com, build them out with a ton of great content, sell advertising across all of them and you have CCIN, The Castello Cities Internet Network, founded in 1995.

Joining us today to talk about some of his biggest successes to date and how you can do the same thing today is the founder and CEO Michael Castello. Michael welcome to the show.

Michael Castello: How are you doing Michael?

Michael Cyger: Great. It is great to have you. Michael I like to start off the show with a little background on the guest. Can you tell us how many domain names CCIN currently owns? And in what TLDs they break out?

Michael Castello: They are all; I’d say 99.9% are .coms, 1,500. You know we have a small portfolio but we have a rather large premium list of domain names, NGOs. So for the most part we actually started back on ’94 and that if there is something that reaches out to me that maybe I would have a passion about I try to register it. Or David tries to register it. But for the most part we’ve accumulated most of our sites probably ’95, ’96, ’97.

Michael: So for the most part you are done registering and buying domain names? The ones you have are the ones you are focused on? Is that fair to say?

Michael Castello: Well we did have to pick up Papua New Guinea about a year ago. It’s kind of sitting there. It’s one of those things where is it like we don’t have a country. Papua New Guinea popped up and we bought it but for the most part we have pretty much settled on…We have got a lot of names that we really want to develop that are sitting there and that kind of, for us, is something that we don’t want to do. We really want to develop out these things.

Michael: Okay so that is what your focus is?

Michael Castello: Yes.

Michael: And I read that you started collecting domain names in 1994. Back in those days the registrations were free which meant that they were worthless to most people.

Michael Castello: That’s right.

Michael: But not you. So do you remember the first few domain names that you registered?

Michael Castello: Yes I remember that there were five in particular but I would just say Berlin I did register, it was taken from me. Actually happened from me three months later. There wasn’t a lot of recourse back then. But no big deal I’m not complaining. PalmSprings.com, Whisky.com, Powwow.com (which is actually the name of my production company in music back then), and one other name which was Mattel.com and we can go into that later. My wife actually worked for Mattel and it was something that I felt would be good for her with the company. But that turned out to be something later and we ended up just giving it to Mattel.

Michael: Before we get into exactly how you built out some of your properties that you just mentioned you owned for…

Michael Castello: For a long time.

Michael: Yes for a long time. Can you put CCIN into perspective for our audience? Across the entire network how many unique visitors do you reach and how many page views do you display?

Michael Castello: Well that is a lot of information to come out with. I would just say that our sites, as I had mentioned, are qualitative traffic. We don’t really use gimmicks in getting traffic numbers up. Our numbers are simply if 8,000 people are coming to DayCare.com those 8,000 people are there for day care. Same thing with Palm Springs, we are about in the same numbers. Anywhere up to 10,000 a day in Palm Springs. Page views I really couldn’t tell you, obviously in the millions. Nashville.com is doing very well. As an overall I can’t really tell you. I would say millions of visitors per month. We would say we are like the geos, because if you are doing 250,000 qualitative hits a month that’s pretty good.

Michael: Yes and just one more question to put the network into perspective for our audience because you have mentioned some fantastic domain names like PalmSprings.com and Whisky.com. Do you feel comfortable talking about the revenue of the Castello Cities Internet Network as a whole?

Michael Castello: This is one thing I have to say is that when I say that we are making so much money it is actually money that goes into our pocket. We really have very little overhead. Which is very, very important about the way we structure out company. But I will tell you that we make at least $1,000,000 a year and no more than $10,000,000 a year.

Michael: Great that is a great ballpark that I think a lot of entrepreneurs would love to be in that situation. So we are going to find out how you built a virtual real estate empire from your first free domain name registration to today. And we will spend some time digging into one of your major brands so that the audience can understand how you did it and then reproduced it on your other brands to build what you have today. So let’s jump right into this.

From my research it appears your success formula is to
1. Buy the industry defining domain name in the .com TLD.
2. Develop a website with tens of thousands of web pages in some cases.
3. Sell advertising to potentially every single business in the city or the niche.

How did I do summarizing your business model?

Michael Castello: All of that was fairly good. I think the last one is a little broad. We actually go for the low hanging fruit. As I was saying earlier we are a small company so we want a lot of return when we go out and get an advertiser. Let’s say for PalmSprings.com if they buy one of the spots on the front page it’s as much as $15,000 a month. Even more, we actually have some that pay $6,000 a month, those that have exclusivities on some of the bigger low hanging fruit. Let’s say real estate would be a big one. So the lower hanging fruit that is another area, let’s say the smaller businesses, let’s say the $100 a month listings. That is something that we are just touching on but we have a feeling that this is something that Dave and I have been speaking about the last year. That is something that we may bring in other parties to deal with. Again one thing about David and I is that we want this to be fun. We don’t want to be caught up in a 9 – 5 or a lot of time putting into it. We want to have a life span here of enjoyability. So for the most part we have been in it this long is because we have gone out there, we have got that low hanging fruit and we’ve enjoyed kind of the fruits of that labor.

Michael: Okay and just to back up for our audience, Michael you are the CEO of CCIN and your brother David is the COO and also leads the editorial across the network. And we are going to be interviewing David in a follow up interview who is currently in the process of moving out to Nashville.

Michael Castello: I think he is just arriving now. He actually took a van and a trailer and hauled some stuff out and I think he just got there today.

Michael: So he is moving to Nashville. Of course you own Nashville.com. You are — currently as we talk — you are in what city?

Michael Castello: I’m in Moorpark, up near Santa Barbara. We have offices in Palm Springs, Laguna Beach, and West Palm Beach and now we are probably going to move the headquarters to Nashville.

Michael: Interesting, we are going to get into that. Are there any other parts of the puzzle that I missed in terms of building out your business model?

Michael Castello: In the 15 years we have been doing this there is a lot that can be talked about. You have hit on most of it I would say that it is very, very important to have (especially in a saturated market that we have now) that you have unique content. And what I mean about unique content a lot of times people say oh the most amount I can get on a click through, the most amount I can get on this is by using this topic, this topic is very high on the Google search list.

Well I will tell you something – originally with PalmSprings.com I had put up the Star Walk. And the Star Walk is basically like in Hollywood you have a Star Walk. In Palm Springs they have a star walk. It has all the names, Bob Hope, Frank Sinatra, all the names that are out there. I took the time back in ’95 to actually go out there and create a page for each one and most people would say that’s a lot of work. Why would you do that? And really it is you are taking kind of a snapshot of what the star says and big deal. Well I found that a lot of people came when they were searching on (back then what was it? It may be Yahoo or InfoSeek – I forget what the search engines might have been in ’95, ’96, ’97).

Michael: AltaVista?

Michael Castello: AltaVista, there you go. That people search Frank Sinatra they were finding PalmSprings.com. Why were they finding PalmSpring.com? Well obviously that is where he lived but there are a lot of those stars names that actually come up in searches. And people would say you know Palm Springs that is beautiful. We are out in L.A. let’s take a drive out to Palm Springs. So there is a lot of secondary movement of getting traffic to your site. Just go with blinders on towards that one area, everybody else is doing it. It is a saturated market. You have got to use different techniques to build up a unique site of content. In the long run it will pay dividends.

Michael: Okay and we are going to dig into that content a little bit more because in my research I found some pretty phenomenal things. So David, your brother and COO, once said if you have the money, purchase the best domain name you can get your hands on but remember the golden rule. A domain name is only worth what you can do with it. We’ve turned down $5,000,000 offer for PalmSprings.com and didn’t think twice about it because we have monetized it so well. In your opinion is the domain name one of the most critical foundations to build a business on?

Michael Castello: Well for us it is. And I believe it should be for anyone that has a global approach in their business. And again even a local approach in your business. That one name could define a lot of future revenue and also cut down your competitive state later on. For us it is always – let’s say we have daycare.com, people who actually come and scrape our database. Now our database is at people who actually came in and signed up since back in ’97. They will come and they will scrape the information off. In the long run when you think about it they can’t get the brand and the brand is what brings in the traffic every day, new traffic every day. So for us that name is premium.

When you think about, when you were talking about PalmSprings.com the kind of revenue that it does make you know day after day and week after week and year after year that revenue comes in. And I truly believe it is because the trust factors that people place now in a name. I mean if you are going to go to Ford, Ford.com, Mattel.com, PalmSprings.com, Nashville.com it just has that trustability. And when you go to a grocery store and you see the shelves are piled with 25, 30, 50 different cereals brands and more than likely I mean you are going to look at a brand you have seen on TV, something you trust. And in a lot of ways that is really what we get inherently in those domain names – it that trust factor. Now what is that worth especially on a global scale? That is worth so much. It all starts and ends with us with the domain name. Hopefully it is a name that it is something that you have a passion in. Something that you would enjoy doing every day and I would really believe it all revolves around a premium domain name…The category killer name.

Michael: I want to dig into PalmSprings.com as an example throughout this interview. For other entrepreneurs who want to develop out their own city and I’m going to dig into some of the details of that, they will be able to compare their own city details with PalmSprings.com to see if that is something that they should pursue. So that is going to be my line of questioning here Michael. But is you have other examples like Daycare.com please do suggest those because knowing how other brand relate to the questions that we are talking about would be really useful as well.

Michael Castello: Sure, you know a lot of it is not cookie cutter, some of it is. If you think about it the difference between PalmSprings.com and Alcopoco.com, even in Nashville are really quite different. So you have to adapt.

Michael: Definitely, so let’s use PalmSprings.com as an example. So the general demographics of the people that live in PalmSrpings.com, I did some research and I typed in Palm Springs demographic and guess what was at the top of the search engine? Palmsprings.com because you got to see demographics of course. So I think there are about 42,000 residents in Palm Springs. It has a decent amount of revenue. You have got some SIC codes there and how much is being spent per year. As you would imagine I think the demographics are a little older so there was a decent amount of health care being spent in Palm Springs. Restaurants and hotels were biggys as well. How else would you describe the demographics in Palm Springs to your clients that are advertising on the website?

Michael Castello: I believe that there are about 2,000,000 visitors a year [to Palm Springs, the city]. So it is very important that during the seasonal month, especially around January, it blows up there. When we started with PalmSprings.com there was no summer season. I mean it could be hotels and business that were closed down for two months. They leave town because it gets up to 100 to 115 degrees. When we put PalmSprings.com on the Internet the snowbirds, Canadians, Germans, love the heat. They want the heat. And what we found out was, I think some of it we can take credit for, but it is also the Internet you can take credit for, is that the Internet exposed the whole population to that town and created a summer season. If you go there now everything is open all summer long – which is crazy. And they have the misting machine and so it has its own kind of element there. There is a rather large gale element that also comes there. And that is a large part of Palm Springs. Not as much retirees as you would think. There is actually a much younger jet set crowd that goes to Palm Springs, and comes actually out from Hollywood also. It is the smallest big city in the world. I really believe that. It has got so much out there when you think of the tramway, the art, the culture and the golf courses. They have got over 100 golf courses, it is a golf Mecca. So I mean that is really the angle that we came at in the beginning was real estate, golf, hotels.

Michael: Real estate, golf, hotels. I’m going to come back to that. And when I was doing my research I also went onto the Google Ad Word keyword tool because I wanted to know the exact phrase Palm Springs and what the global and monthly searches were. The global searches were 90,000, the local monthly searches (meaning the U.S. searches) were 60,000 and it had a cost per click of about $1.10. Do you use those demographics when you are looking at other – No.

Michael Castello: I like that you do that. I know everybody today does do that. And I think as tools, that is very important for those that had maybe some of the long tail smaller sites. For us you could get really caught up in a lot of the new shelf of just stats and it can get very, very, how can I say – Some people really don’t worry about page rank with Google. I know that sounds crazy. We occasionally look at our stats. We do have clients that want to know what kind of page clicks they are getting which is very important to us. But for the most part we really don’t delve in that.

Michael: But, Michael, do you not dive into page rank and exact match searches and all the other statistics that can cause paralysis because you do have such a fantastic brand, PalmSprings.com, and because you get 2,000,000 visitors per would you say year?

Michael Castello: That is actually what the physical visitors that go to Palm Springs. As I was saying it demographically swells there from your 40,000 that live there. I forget what we were really talking about.

Michael: So do you not need to look at any of those demographics because you have enormous traffic to your website as you have the best brandable domain name. Nothing else is really important.

Michael Castello: That is right and I’ve got to tell you this really has a lot to do about what I may speak about, if we do speak about traffic in Miami we do have the geo-publishers expo that is coming up in October it is going to be very, very important for those who have city and geographical sites. But it is very, very important that people have fun, stay focused and make money. And again most people say wow $100,000 for a name, gee that is so much money. I think would you spend $1,000,000 on a nice house if it would pay for itself in three years? I think 99% of people would say yes. But they don’t look at it that way. And as I said over the last four or five years, and David has said also, there is a certain time period where these names could be had for relatively, I would consider it, inexpensive amount of money. Now it is a lot of money to people. But again it is like buying a car that pays for itself. A car is an expense. A domain name is an expense but something that you get a return on year after year after year. You said earlier about PalmSprings.com back in 2002 being offered for $5,000,000 for it. And most people say it takes $5,000,000 to retire. But if the site is making $1,000,000 a year in five years you just made the money so why not hang out and enjoy it? So again for me it’s, as you were saying, it’s the domain name. Get the domain name to make the money and have fun doing it. It is so important.

Michael: So let’s talk about the domain names a little bit more. So clearly we have talked about the importance of PalmSprings.com. What about PalmSrpings-California.com or PalmSprings.net?

Michael Castello: I think we have one of those. Again it’s if you were in Palm Springs and you love Palm Springs and you say all I can get is PalmSprings-California.org. I would say have a good time. You are out there. Put daily stuff up on there. Create pages. Create something. You might find out you have a great site that gets traffic from search engines. What we have we get both traffic from both search engines independent, I’d say 30% maybe doesn’t come from search engines. That is a lot. So let’s just say your search engine dependent. Okay use the search engines that is great. Get your traffic. You can make money. There is no reason why you can’t make money. At some point you might say you know what I’m doing such great traffic I’m going to go out there and see if I can get PalmSprings.net. Maybe I’ll buy PalmSprings.com. Who know? But the point of it is it starts putting the cards in your hands. You might find investors who say you know what – what you have got here is a great site. Let’s put together some money and buy the brand PalmSprings.com. Mike and David probably won’t sell but that is what you can get to that point. So give yourself options. What everybody has an abundance of these days and is very valuable is your time. Do you think of (20:27) your time. And on the Internet you can do that now. You can convert your time into money, because eventually that is what you are doing. That is really as simple as I can say with a non-premium name. There are a lot of ways to work your way into the Internet. A lot of ways to work yourself up to an area. You have options. You can say you know we can buy that premium name Smoothie.com.

Michael: Right but the person that actually buys PalmSprings-NCA.com let’s say because it is available to hand register or they can buy it off of one of the after markets for $500, they are going to get the search engine traffic but they are not going to be able to go to any of the business and likely sell spots on their website, because one they don’t have a brand and they are not going to have a ton of traffic for a year or two most likely.

Michael Castello: You put the cart before the horse. You’ve got to generate traffic. Traffic is the life blood of any successful site. I have people who say to me look I’m going to buy this site and I’m going to go out there can I get $500 in advertising? What is your traffic? Well we just started off and we are get maybe 200 and hoping to get to 500. You better get to at least 1,000 a day before you can even start asking for some numbers like that. So again if you have a love for the thing that you are working on you can take the time to convert some of that love into pictures and pages. And you actually start getting traffic from the search engines. And you are doing a good amount of traffic. You can go out to an advertiser and say you know what, we are doing so much a day and we believe we can drive a lot of traffic too.

The customer might say this is exactly what we dealt with in Palm Springs in the early days when we were out there. People were like the Internet is a fad we don’t want to deal with it. Well how are we going to convince them? Well at the beginning we were actually telling somebody we will put you on for two weeks. We will build you a splash page. It will cost you nothing. We just want to prove to you we can drive traffic to you. You better believe that after two weeks he says how much is it? Yes we will pay the money. So you have got to devise means of the traffic first and then you get the money from the client because you are driving traffic to them, and revenue to them. And at some point you start bringing in that kind of money you can start reaching out and grabbing a better brand. You don’t have to but at some point I think you are going to have to.

Michael: So do you generally use those numbers when you are building out other websites that you need at least 1,000 visitors per day in order to have enough traffic that an advertiser will receive referral and it will be worthwhile for them to sign up as a listing?

Michael Castello: Absolutely. If we are charging somebody $1,500 a month for a hotel they have got to be making at least $15,000 a month.

Michael: Really?

Michael Castello: That is the way I look at it. Now in the long run remember during the summer seasons they may go down in some geographical areas, but we do yearly contracts and they understand that people are creating their itineraries on off seasons as much as they are paying on seasons. That is one thing David and I have a lot of real world experience over multiple years so as an asset class we have a great deal.

Michael: And that is a great point that you just brought up. That anybody else thinking on developing a geo should be aware of. That people plan during the off season more than the on season. So advertising, when you are selling the advertising to restaurants, to hotel, to attractions they need to think of it as a yearly marketing budget. Not just a monthly. Let me try it for one month and see if I get anything.

Michael Castello: That’s right and in the long run they are going to get, if you have got the kind of numbers that we talk about, that you are driving to your clients they are going to – the toughest part, I know people who have pre-sold which is amazing, advertisement. The toughest bid is on the year because on the year when you are up for renewal they are going to say how much money I made from you. And that is either where you are going to fall or you are going to rise. We’ve compounded so that is great. Every year we have compounded which means we have kept businesses in business. They have got to be there with us. And in the long run you get more clients and more clients, you just compound that money every year.

Michael: I’m going to dig into a whole bunch around your clients and how you are able to sell them year after year but I have one more question regarding domain names. So when I go to CCIN.com and I look at the domain names that you have in your network many of them have hyphens which reduces the brand value of the property. It is not PalmSprings.com it’s Palm-Springs.com or what have you (not that example per say) but you have some others. So those sites that have hyphens do you have plans to build? And I have visited many of them. And I see that they are in some cases single page websites that then link to your network. What is your business plan for those websites? Are you going to build them out? Are you looking at them to connect into other sites that generate more revenue? Do you focus only on search engine optimization? Are you holding them until you can get a better equivalent without a hyphen? How do they fit into your vision of your business?

Michael Castello: I don’t mind telling you things that have worked and have failed. I don’t mind telling you that. The reason why David and I go speak at many of these conferences, we are not selling a product. We are there to simply tell you we have experience. We know what works and what doesn’t work. There was a time back in 2000/2001 when each of those mini sites was doing fabulous traffic. Some 10 real estate leads a day. Think about that. Okay it’s changed. Why has it changed? And this is not to knock mini sites but for those who put up lots of mini sites (we have maybe 200/300 mini sites of these dashable type names) if you don’t work them every day, if you don’t work them every week you are going to lose out. We only have so much time.

As an experiment it worked great at the beginning. But at this point what we really have is names like Smoothie.com and Bullion.com, some great names. Are we going to spend our time on mini sites or are we going to spend time on the major sites? So for us we are somewhat limited by one: our attitude that we want to have time for ourselves. We don’t want to have a 9 to 5 corporate job. And also that is where we are at. Those names are there. They do bring in leads occasionally. We do convert them occasionally but they are nowhere where they were ten years ago.

Michael: That makes sense. So what is your top geo domain name in terms of revenue for the entire network?

Michael Castello: Well it would have to be PalmSprings.com because we started back in ’95. And as I said we’ve – it’s also as a geographical area those clients will pay big money more than I see almost any other city. We have taken the time because it is close to us. We were able to go out there. We were able to work the method we told you that we have some great methods that we used over time when we would have a client say back in ’97 you know we tried it we are not really getting any traffic. That is crazy, you are getting traffic from us. No, no, no. Well where are you getting traffic? We are getting fabulous traffic from our website. We have a website and it is called such and such .com. Oh our webmaster tells us we are getting fabulous traffic. Well wait a minute, now since nothing is happening tell you what we are going to do. Would you mind if we put up a PalmSprings.com 10% discount? They were like well we don’t give discounts. Yes but you are not getting any traffic from us anyway can we just put it up anyway. We’d like to try it. Sure if it is not going to…why not.

So we put it up there. We ended up doing…why we did that was because everybody was calling up saying we want that PalmSprings.com discount. Before they would just say oh we came through the Internet. Where did you come through? It was a Yahoo thing, they couldn’t tell that PalmSrpings.com because they would click through from whether it was a search engine or whatever. When we started the 10% discount it not only branded people to our site. It helped with the client realized that everybody, 90% were calling because it was PalmSrpings.com. Boy did that change a lot of things.

So for us the Palm Springs vehicle, the model, we’ve really cut our teeth in a lot of methods that we have actually helped other city sites use – that have worked for them very well. And again if it works for us on that market then that market is going to work for others. So Palm Springs would be the best and the biggest. But I think that Nashville with setting our headquarters out of Nashville, Nashville could probably be our biggest site.

Michael: And these methods they are gold. I’m loving these. You talked about developing out a free page on the website for a couple of weeks so they could experience how much traffic, and some leads, are coming in. You talked about offering a 10% discount so that it is definitely trackable. People would say I have your 10% discount. Those are some fantastic methods for bring in new customers in a geographic region to you directory. What other methods do you have?

Michael Castello: Well let’s look at Daycare.com. You will probably find this quite interesting. There is 250,000 daycares in the country. When I first put up Daycare.com I offered free listings. We would get 3,000 a year. That is a lot of people signing up for daycare. But a lot of those leads, or a lot of those listings were not quality. People say oh I want to start a daycare and put up a free listing. Kind of like in a lot of ways what Craig’s List does -free listings. What we started doing is charging for listings. And when you start charging people for listing they start caring for their listings more. And those listings are usually tried and true, they are not transient. We also, from a lot of states for Daycare.com, a lot of states will give us their data bases. And what we will do it this, we will insert let’s say 8,000 listings from Michigan. Now the people that are paying are always at the top of the search results in our registry. Which is great, that is how it should be. They should be able to see that. That is what they are paying for. But a lot of times when we put in the information they only give us very basic information from some of these states. So we will put in let’s say the daycare times from 6:00 a.m. to 6:00 p.m. Let’s say children are from 0 years infant to 12 years. That may be incorrect information, but you know what ends up happening? When it is incorrect information people are calling saying we saw your daycare and you are open at 6:00. Oh we don’t open at 6:00. Where did you find that? Oh we found it with Daycare.com. So we get emails from people saying that your information is wrong. We are glad you are listing us and we always send them back saying ‘non-members only periodically come up. It’s only $5.00 per month.’ It is a way for us to make contact with them.

Michael: That is gold, Michael. That doesn’t sound crazy at all.

Michael Castello: If the information is correct they don’t notice it. They don’t know it. So nothing wrong with leaving something a little erroneous so they have to contact you.

Michael: Fantastic. So I’m going to jump down to a question that I had. Elliot Silver is I believe a friend of yours correct?

Michael Castello: Yes he is a great guy.

Michael: He posted just a few days ago a blog article entitled Directories Can Be a PITA. You know it is a pain in the you know what, because you have to deal with people that are contacting you. That are saying you have incorrect information. Some of them are going to be irate with you, some of them are going to say get me out of that directory, others are going to say what you want to charge me to fix this information? They are going to email you five times before you get $5 a month out of them. It is eating up all your profits. They can be a PITA. And I’m sure I’ve been a PITA to some other directories. What is your viewpoint on that?

Michael Castello: Well again to grow with your audience and I think it is very important that you cater to your audience. What your audience wants you give them. I mean you own that audience. You take care of them. At the same time as you are saying and Elliott is saying it can be a full time job. So you have two options and I think you should do either or. I don’t think you should ever discard your traffic. One you have a system that automates it. You pay the time to have a turnkey system or have somebody implement in your system something that allows the client to take care of it. As a last resort they can always email and somebody can take care of it.

The second option is that you spend the time and the money to put together a brick and mortar. At least an in home kind of service where people will take care of that traffic but I would say paramount you always take care of your traffic because they always have the option to go to somebody else. They always have options to go to somebody else. They always have options to get better service. The one thing with PalmSprings.com at the beginning and I did this at the beginning, is that feedback option at the bottom. And believe me people would write or they would write and say I’m trying to figure out when this tournament is. Simply back then I would call the local visitors office and get the information emailed. I would always email them back. Believe me it makes a huge difference. You have to cater to your audience. They will keep coming back and they will stay with you. It is very, very important. And I agree you have to be very careful not to get caught up in that making it a 9 to 5 job where you punch in a job. You can’t do that.

Michael: So let’s come back to PalmSprings.com. We talked about the importance of the domain name and creating the brand that also has benefit of search engine optimization where as a domain name that has a hyphen may only lead to the search engine optimization traffic. We talked about PalmSprings.com being your top geographic domain name. How much revenue does PalmSprings.com generate per year?

Michael Castello: How much revenue? I’ll be honest with you there was a point where it was making over $1,000,000 a year. And since the turn down of the economy we have probably maybe taken a 20% hit on that. But for the most part our return is great. I mean like I said it is money in our pockets. We have no overhead. I believe the server only cost us $500 a month. What other overhead is there except for our time and commission base with our sales people which are very few. But that is about where we are at.

Michael: You don’t have an editorial team, a customer service team that you are paying on a regular basis to keep the website up and running and answer questions do you?

Michael Castello: No but that is something that we should consider in the future and I believe we are. Dave and I are considering a lot of options here this year. That could be very broad – some big changes mainly because we have to take care of our audience. Our audience in the past was always 100 miles outside of the geographical area. Locally there they pretty much have the newspaper, they knew where to go and they had what they needed. More and more now locally they are reaching in to their iPhones and their Smart Phones and looking in for what is happening. That is something that will take time and money and that is something that we are looking into drilling down more into local. Definitely local is where we have to go and that is going to be a major change for us.

Michael: Do you consider PalmSprings.com to be primarily a directory where you sell directory listings?

Michael Castello: Let me go back to the beginning. I don’t really look at any of our sites as being a directory. I think of it as a virtual place. I think this is very, very important about that people tune into this logic because the world is changing dynamically in a huge way. People for a multiple of reasons whether it be social, whether it be economic, they are finding themselves home more. And people need an avenue to meet people, to feel like they are escaping, going someplace. I think it is very, very important that we try to create these sites as more of an entity as more of a virtual place, an experience. So I really don’t like looking at them as an inanimate object. I like them being like a virtual place so they are not really directories to me. When somebody goes to PalmSprings.com they are kind of seeing in our advertisements what Palm Springs looks like. They kind of get a feel of it. And I think that it is very, very important that you deliver that emotion to people. Or else it is just like any other magazine or a book. It’s nothing. It has got to be something that you can get in return.

For example (I’ll be quick with this) but on Daycare.com we have a form and that form gets a lot of traffic, a lot of providers and a lot of people who are looking to start a daycare, even parents. And people come there and say I am so glad I found this form. I’m so glad I’ve got people like me. They create relationships there. They are there every day. And we’ve converted a lot towards where a lot of these people who come, who have experience in daycare who write articles for Daycare.com. We will actually moderate the forms. And what we will do in return is if they have over 100 posts we will give them a free listing in our registry. That is converting something – something tangible. We are converting their time into something that that would normally pay for because they are engaging in our site. They are there every day so I think it is very important that it becomes something alive.

Michael: Michael certain parts of PalmSprings.com are sellable like a directory although clearly you are building out the entire site as a destination to create a full user experience. Could you walk us through which sections of your site might be sellable to companies versus which ones are necessary to meet that destination like experience?

Michael Castello: Evert geographical area is different. I would say with Palm Springs it would obviously be golf, the hotels, the real estate, restaurants, usually people are coming to – they want to rest their head somewhere and then they want things to do, they want places to eat and if they really like the place they will buy there. The other areas are a little tough to gain access to as far as money at this level. I think in the future when sites can actually offer their own templates and pages to be part of a Nashville.com or PalmSprings.com. I really believe that is the future. You have sites like Whippley and Wiks (Spelling 39:28) are doing it. I believe at some point the city sites are going to need to do that. I believe that will include the smaller businesses because a lot of them don’t really want to spend money. You know it just is how it is but you want them to be incorporated into this site. They are a part of Palm Springs. They should be in PalmSprings.com virtual. So that may be the future for us but it is just that low hanging fruit that we are mostly dealing with.

Michael: Okay so it’s the hotels, the attractions, the sporting events like golf, the restaurants, real estate, things to do like day spas, manicures, pedicures…And so creating other experiences like discussion forums or a calendar of events or like you discussed earlier the stars walk through Palm Springs, things like they have in Hollywood, those are the things that add an experience that somebody is going to come and reserve a hotel but they are also going to figure out what to do during the day.

Michael Castello: Let me expound on that a little bit. With Daycare.com that is a site where we do take the time with the forum to acts and manage. With Whisky.com we have someone who actually takes care of managing the forum. That is why those forums do well. But I will tell you that just having up a forum you actually have to have people managing it every day. If you do you get the return result. If you don’t it will anguish I don’t care how good the domain name is. Some things you have to erase, certain things you have to employ people for and again we are just on the cusp of whether we want to venture more into pay people for that now.

Michael: So if I go to Palm Springs, and I’m not sure if this is even a metric that you measure but how of the businesses and attractions and hotels in Palm Springs can I find on PalmSprings.com?

Michael Castello: That is a good point. As I told David earlier in 1997 I said because we were running into a lot of resistance out there, I said all you have to do is get a fraction of the businesses out there to make us a fortune. And that is true. So I would say in the area of the hotels probably a pretty good percentage of the larger hotels. I couldn’t tell you that. It is probably something David is apt to answer because he lived out there. And he managed most of those businesses. But I would say truthfully, off the top of my head, hotels maybe 50%, maybe more.

Michael: What about golf?

Michael Castello: Golf is a little bit different. Golf we have a licensing on the golf section. Same thing with the real estate section. So we actually have an outside party company that pays the licensing fee to get all of that revenue. So what we do is we have a business that comes to PalmSprings.com, they go to the golf section and they either call the number that goes to these offices, someone handles it and they process those tee time, but don’t directly deal with the golf courses directly.

Michael: So that makes sense on the golf courses. So if somebody else buys another destination, location that has a fantastic golf course. Let’s call it LincolnHeads.com from South Carolina, tons of golf out there. Could they also contact this company and license them the property so they could get all the leads form people interested in reserving tee times on golf courses?

Michael Castello: Yes I think that would be the smart thing to do locally. I don’t believe a company in Palm Springs is suited to really handle Hiltonnet. So there is obviously other companies that are saying Hiltonnet. And I would say that is a great way to doing it. And the reason why I say that is that we get a lot of tee time reservation through PalmSprings.com, somebody else handles it. We at one time were GulfClub.com. Did a purchase a brick and mortar, had offices, boardrooms, cubicles, accountants, the whole nine yards to give it a go. And we were doing $1,500,000 in tee time reservations a year from PalmSprings.com and even though David and I didn’t pay ourselves a paycheck for two years we lost $200,000. So what came to mind was you know what if we can’t be there every day working it you are going to lose money. But it is important that – look wouldn’t you rather make $6,000 a month if somebody is saying we’ll license out the real estate section or the golf section. And it is just money in your pocket. Do you really want to go through the hassle of having a brick and mortar and employees? I mean you could do it if people want to do it. Plus we will go on to say you know what here’s a company they are going to give our visitors exactly what they need on hand experience. They are out there they know golf. That seems like the right thing to do.

Michael: Definitely. So if I start up a geographic domain name and I build it up with a ton of traffic and I want to go after real estate agents, because one of my areas where I’m selling listing why not go out after 50 real estate agents and try and figure out what their differentiation is versus doing your exclusive deal like you have done on PalmSprings.com with one broker agency?

Michael Castello: Well for us it’s giving the visitor pretty much a streamline way to find what they want. It’s giving our broker a way simply – see in Palm Springs Lorenzo Lombardelli was our first account. He was actually the guy that said I get it, I get what you guys are doing, I want it for 30 years. And we were like we can’t do 30 years, can you do 20? I mean that’s basically where we are at. And we had it on a scale that actually went up every year. Again let’s say my Mom she is a broker. Let’s say simply we had our own agents in PalmSprings.com do it. We would have made a fortune doing it but we would have had a business on the side. So for us it was better matched that we had somebody every year that pays us more every year and it is just a win/win. Okay are there other brokers out there saying we wish we could have had it, yes.

To be honest with you David went out there. He went to a lot of different brokers and they were like we don’t need you. PalmSprings.com is not worth a dime to us. That was their attitude. One guy who came through was the guy who really deserves it and he’s doing a fabulous job for not only our visitors but for himself in this business.

Michael: And I can understand why he believed in you. He gave you the revenue in order to continue to build out the business otherwise who knows what could have happened. So that is a fantastic story. And I think I actually remember reading the story, probably on Ron Jackson’s site about how your Mom told David to go out to Palm Springs and to approach the real estate agents because she was one herself and she understands the value of it. And he flew out there and he met with real estate agent after real estate agent until you found your exclusive real estate agent.

Michael Castello: Well it’s a better story than that. I’ll make it short but back in the day when I started Palm Springs I said there are so many beautiful houses out here I’m just going to put a page from the MLS of the best looking houses. People loved it because they could see what the houses look like out there. I had a guy that wrote an email to me saying I really want the house at such and such drive, or whatever, and I want to come out and see it. And this is all gray area. This is all new to me. So I’m like the first thing I do is pick up the phone and I call the guy and I say PalmSprings.com. He says wow I just sent that email. It’s incredible I just got a response. I says we will have somebody contact you tomorrow. It’s a little late, it’s 10:00 at night his time. He says yes I’d really like to speak to somebody about it. So I call my Mom and I say Mom what do we do? She says well I’m a Florida broker. That is a gray area, I don’t really know. I said you know what? It’s the Internet. Why don’t you try something? She ended up contacting a broker in Palm Springs, got a referral contract, which she could do and they ended up connecting to this person. The guy came out, he spent $800,000 and bought the house. And we got a nice referral fee.

So David when he went out actually came out with dozens of leads to the agent that sold that house and offered it to that agent for $1,200 a month exclusivity. And the guy said let me talk to my broker. David was in the office and the guy came back and said my broker doesn’t want to do it because we are going to have to hire somebody to handle all of these extra leads. David couldn’t believe it. We just made the guy $50,000, he couldn’t afford $1,200. So he is actually the one who sent us down to Lorenzo and let me tell you what that company has done in the last 10 years…You should see the building they are in now. I’m telling you they have done, during that boom, they were doing hundreds of leads coming in a day.

Michael: And that is another fantastic tactic. So build a site. Take the leads. Print out those leads and go business to business and say I’ve got these leads, they are coming in every day, every week do you want to be the exclusive handler of these leads?

Michael Castello: Absolutely. When you come in with proof…In Nashville the other day we had somebody what was looking for 500 room nights for a company on a meeting planner. The first thing you do is you go to obviously a hotel that has a great meeting planner, a meeting area, a conference area. You walk in with those kinds of leads and say these are the kind of leads that we are getting. Do you want these? What is the deal that you can work out on this level and plus the hotel is going to say the hotel is going to advertise on there too. You bring them in. That is David’s forte. When he does the interview with you he’ll explain that in detail.

Michael: Michael, you have a lot of different types of businesses advertising on PalmSprings.com. You have restaurants, attractions, hotels, real estate agents…How much does a company pay for a listing on PalmSprings.com?

Michael Castello: It depends on what is the area. If it is hotels it is probably about $1,500 a month. What they get with that is they get a listing on the front page and also be able to do what we call Splash Page, benefits Splash Page. And that is good for them and it is also good for us. It gives them visibility on PalmSprings.com and it also gives simple content information for the visitor. What we found out with PalmSprings.com a lot of visitors want to see a lot of different hotels. We control the format; we control the tempo of the page. It’s always we have got enough information, we have got the pictures, we have got the prices, very simple. And we reduced the I can see for the visitor. If you have a lot of different businesses and a lot of different pages it gets crazy. We keep the uniformity, people go to it and it is very efficient, it works very well. It works very well for the advertiser too.

Michael: So when you bring on a new advertiser you say we are going to give you a graphic on the front page, we are going to give you your own dedicated page. Did they ever push back and say I got a website, just link it through to my website?

Michael Castello: Well that is okay. We can from the Splash Page. I mean this is something better off. David deals directly with the clients on this. I don’t have a problem linking them on the pages. One thing that is very important, and David will explain this: is that you have to keep control of your website. If you allow the advertiser to start controlling too much of it, you know what is best for your website – at least I know we do, because we get great returns.

Michael: Okay that makes sense. So when a company like a restaurant buys a listing they get a banner on the front page, they get a dedicated page on your website, and if I go to Google and I type in PalmSprings.com and look for how many pages are in text I can actually see about 34,000 pages. So you guys have a ton of content. So if somebody is actually looking for Mexican Restaurant Palm Springs often times they are more likely to find your dedicated page with their listing rather than their website which may not be search engine optimized on a highly value domain name in the eyes of Google.

Michael Castello: Absolutely. There were instances where (Inaudible 51:50). Our page was ranked higher than their page. Mainly because we had it there longer. It was on PalmSprings.com. And again when you fill those Splash Pages because it works well for the client but as you say it drives more content to virtual aspect of this.

Michael: Okay so with the traffic that you have today you are able to charge about $1,500 per month for a hotel. What about a restaurant that – you know margins on restaurants are pretty small? Some restaurants only make 1-2-3% profit.

Michael Castello: Restaurants (Inaudible 52:20). Restaurants are going to be a lot less. Again it is whatever the market will provide. The restaurants will pay a lot less no doubt. You have to decide that as a businessman/businesswoman. In the area that you are at what kind of money you can generate from the traffic and from the clients. Then again Nashville is going to be a lot different because (audio garble 52:46). The same with West Palm Beach, a lot different. But we will find what the market will bear and that is where you have got to (Inaudible 52:52).

Michael: Are there any benchmarks that you can provide so that others might be able to compare traffic if they are going to build a similar type site. For example can you say restaurants are going to be tougher than hotels so we only are able to charge a few hundred a month or something in that…

Michael Castello: Yes I can say that. The restaurants, let’s say it is $100 per month, $200 a month, $300 a month, it is not going to be $1,500 a month.

Michael: What about shops like clothing shops and Katki shops.

Michael Castello: Same thing. Think about their overhead. In the long run they are not making the kind of return that they will on a hotel or on real estate. So again it is going to be a lot less. That is why it is just the low hanging fruit which is usually the hotels are the big one that comes to the Internet source for four months.

Michael: Okay so start with the hotels, potentially real estate and maybe something major like golf if you can set up a relationship like that.

Michael Castello: That’s right and let’s say if it was National Robertsville Music. Let’s say in New York City obviously Broadway would be an easy way to make money. Every town I believe has it’s attractions.

Michael: Alright, great advice. So we are saving some of these questions for David who handles the sales process and when we get David on we will ask him how he sells advertising specifically. How the contracts are structured. How they are renewed. The kind of sales force you have. So we will save all those. So we have talked a little about domain names. You have got 100 – 150 or more geo domain names in your networks, at least listed publically. And so what separates a PalmSprings.com from Petaluma.com, from a PortSalerno.com? Is it the city size, is it the tourist, you know the quantity of tourists coming in? Knowing what you know now about PalmSprings.com what does your lens look like when you look at other opportunities when you look at other cities like Petaluma or Port Salerno which are two other domain names that you own?

Michael Castello: This is the point. There are different levels with geographical names. The gems of that industry are the destination zones. And a destination site is something like you know New Orleans has got a Mardi Gras, Nashville has got a music row, you know Palm Springs has got a golf course. So they are destination sites. Destination sites are really I believe Branson is another good one, which is really where you can make a lot of returns from them. The other side Petaluma, nice area, a quaint little place where you have got the wine area around it you can reach out into. But for the most part we look for the destination site to delve into. Petaluma again it is not a site that you spend a lot of time on…If you live in the area, absolutely. We have got to divide our time between some of the sites.

Michael: I live up here in the Seattle, Washington area. I’ve looked at Seattle.com. It’s part of a geographic domain name empire like CCIN. Is it even possible for an entrepreneur today to buy a destination site like Seattle.com or Hollywood.com, or PalmSprings.com for…Let’s start with is it even possible to buy it anymore?

Michael Castello: Everything is sellable for a price. As you are saying…Let me put it this way they can be very, very expensive to buy so to be able to talk about how it can make you a huge return. It is the best time I believe in the last ten years to buy NPO sites. There are a lot of people out there that may be outstretched from their real real estate and either don’t want to let a domain name like that but maybe are not getting the return that they want because they are not spending the time to (Inaudible 57:00). I would say if there is a way find a way. Is it possible? Anything is possible. Dave and I right now could probably buy into it. A great super name somewhere, I’m sure we could but like anything you have to take time…

Michael you seem like a person who really takes time to looks at the numbers, really delve into the numbers and that is what you have got to do. You have to contact people separately. Is Carmell.com available? I know the guy that just sold it because he called me just recently. He hung onto it for 15 years. What a great price – Same thing with Pebble Beach, great price, for a very reasonable amount of money. So I believe it can be done. I believe you just have to be in love with it and you just have contact people. Find out what they are willing to sell it for. You probably get some great deals these days. And use in general the money we have been doing. You can put the time, any one site, I could make a great amount of money on that one site and having a great time. I’m not saying I’m not having a great time and I am not making a lot of money now but you realize where the industry has gone. So much more needs now than we put up to all these sites that we have launched. So even if that one site what a great time for somebody to do.

Michael: So if I want to go after a geo domain. So I can’t buy Seattle.com but I know Microsoft and Redman and Google is coming up to Seattle and maybe I’m going to look at some of the other geographies around Seattle. Or maybe I live down in Florida and I know that Disneyworld is expanding and I want to buy, I know that it is going to grow up, cities are going to grow up around there and so I want to get in early. How do I value geo domain names (not the top of the line geo domain names not the Seattle, the Palm Springs, the Hollywood.com) but sort of the – I don’t even know if you can call it the next tier down. How do I put a value on a geo domain name?

Michael Castello: Well that is a great question. What you have to do is – let’s say with like Cuba. We’ve got a lot of great profits in Cuba. We have spent a lot of money to get great profits in Cuba. Not really knowing if it would open up with the (Inaudible 59:25) profile. So those are the gambles. Like Cuba I think would be a great place to do business in. You have to look at, let’s say around Seattle, if your great path was Seattle you could play one off the other because as I was saying before somebody comes to L.A. they might find out about Palm Springs and that is very possible because they do that with (Inaudible 59:47) I would look at a tab that has proximity to a much larger destination. It is in the hundred mile area. Does the town you are looking at, does it have activities, golf courses, culture, does it have singing? Think about it. There are a lot of things that you could put up about that town. You should draw off of that other major attraction. Whether it be Seattle, Vancouver. But you are around the area. Some of those satellite cities around those areas, in fact that was what we told Elliott, the same exact thing and others. You could draw off of those major destination sites to come to your site, to your city. And I believe that is a great way to evaluate a name that is a golden jewel that is out there that you could take advantage of the destination.

Michael: So that makes perfect sense but how do I figure out a price?

Michael Castello: A price? Is there a name around Seattle that you can come up with to give me a demographic as far as in the numbers? Give me some numbers. Let’s say it is a town of 25,000. It is 25 miles from Seattle. Let’s say it has railroad tracks, a small airport, it’s got golf courses I would say you would probably get that for anywhere between $25,000 and $75,000 or less. It is a single word name, maybe people have heard of it. Actually it is very, very doable from $25,000.

Michael: But is that worthwhile if they only have a population of 20-25,000 and in comparison to Palm Springs which has 42-44,000, but Palm Springs has an enormous amount of tourists and a smaller city around Seattle might not have as many tourist.

Michael Castello: Again remember if you are near a destination of that place you can generate traffic for that site. When I said that Palm Springs is 40,000 a year of residents that live there but it sold for $2,000,000. Again it could be what you bring to that town. I think you would be surprised what you can do if you do the right kind of approach to a geographical city that has potential. Like we did with Palm Springs. I mean I put every other place, every other store is for lease or for rent. And it booms in the (Inaudible 01:02:00). I believe with the right kind of resources…like the things we talked about before. I believe we could do that because we could tell. We could have that kind of leverage. I mean $25 rent to own let’s say Calabasas.com. What a great town close to you. Right near L.A. Totally to bring that money back in 2 to 3 years.

Michael: Okay so bringing that money back on buying Calabasas.com for say $25,000 to $30,000 is going to require that you build out a destination website focused on that content, it has a lot of information on wineries, residential, on living, on culture, sports, the scene around Calabasas and the surrounding cities. So you are developing a lot of content which is then going to drive traffic to the website for people who are moving to Calabasas or visiting Calabasas or visiting family there or what have you. And once you have that traffic you are going to go to the lowest hanging fruit that you can, the advertisers that are the lowest hanging fruit and you are going to say I have this much traffic, I’m generating these kind of leads, let’s do a free trial on Calabasas.com and if you like it then we will charge you $100/$1000 per month for a listing.

Michael Castello: That would be a lot for Calabasas. I would say for Calabasas maybe $200/$300 per month. Something like that. Unless there is a Ritz Carlton or a Fairmount or something like that. But you are going to be gaining all with the mom and pop businesses. The big corporate are going to be a little tough to deal with. The small mom and pops you are going to give them an avenue out. You are going to give them global audience. So it is very important that you attract goals to those businesses what Calabasas.com can do for them. That is something that you can do if you put the time into it.

Michael: Go to the local companies I say for $100 a month here is what you are going to get. I’m able to bring on 20 companies (let’s say) of various industries, that is $2,000 a month or it’s about $24,000 a year. Is that a good place to start would you say, if I was able to bring on 20 customers for $100 a month a good first year? Looking back on what you did with Palm Springs.

Michael Castello: Well think about it. I mean you just paid for the name in one year, right? Imagine if you replicated that with other towns. I mean that would be a great formula for success I think. I would go for the real estate section. I would try to get $500 out of them. I would be specific to that. You just made a doable potential right there. Just think of that. You charge really very little money when you think about it. I think it is totally doable. One I think anybody can do and I think it is a great investment.

Michael: alright, Michael you have been very generous with your time. I want to leave the audience with an action plan of some sort. Spotting opportunities is a touch profession. Clearly you were able to spot a fantastic opportunity in 1994. If you were starting out again today what path would you take? Or what paths would you look at?

Michael Castello: What I would do it is I would…Money, the dollar is being worth less and less every year so I would put whatever I had into something much more tangible and it would be a primary name. I would try to buy a primary name between $25,000 and $100,000. If you could do more great. But I would try to get a great name like let’s say graphicdesigner.com. If you could get that for $50,000 and you are a graphic designer, please spend the money and get it. You could always get the money and return on that and more in the future. It’s and return on that and more in the future. It’s a category tour name it will put you at the top of search for a great searchable term that is what I would do. Everybody affords a car. If you can afford a car try to get that one name that will define you and your future and even your fantasies. You can build a great business off of one great name like that. It is a simple form. It is going to start with it very saturated out there, there is going to be a lot of people coming into this business. I see all the time on Daycare.com, people actually buying their daycare names. It is interesting how they are doing it. And they are out in the boonies, they are out in nowhere and they are doing this. It is better to be above on the mountain top above the clouds because it is going to get so saturated it is going to be horrible overcross. That one name will but you above the clouds and into the sunshine and make it so much easier on every single term. That is all it is going to take. It will make your life so much easier. $25,000 for a name like that is nothing for a business, anybody starting a business is softball mode is saying yes, I believe that. Put the money back into your home, the money you make.

Michael: Great advice. If you are watching this and you have a follow up question please post it in the comments below. And I will loop back with Michael and see if he might be able to answer any of the questions that I haven’t asked in this interview. Michael if somebody wants to follow you, what you are up to, or what CCIN is up to what is the best way they can follow you. Are you on Twitter?

Michael Castello: The best thing to do is, and believe it or not I answer everyone who has a legitimate question just go to CCIN, there is contact us [form]. Just put your question in there and I’m sure one of us will answer it.

Michael: That is very generous of you. Michael, thank you for taking the time to come on the show.

Michael Castello: Thank you very much. I enjoyed the interview.

Michael: Thank you. Thank you all for watching, bye.

Watch the full video at:
http://www.domainsherpa.com/michael-castello-ccin-interview

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31 Responses to “Unique Content and Category Killer Domain Names – with Michael Castello”

  1. NEIL says:

    Thank You, Michael for a great interview.

    Thank You, Mr. Castello, for sharing your great experience. I will take your advise.
    My thiswhiskey and thiswhisky are getting more and more targeted traffic every day. I am waiting for the right number to make them a portal.

    Thank You. Kind regards, Neil

  2. Emmanuel says:

    Hello Dave,
    What do you think about buying a geodomain of african cities. Such as in Nigeria. The internet usage is limited compared to the US. However, theres a lot of money in Nigeria and lots of buusinesses, oil companies and it companies and lots of hotels.. I tried to purchase Ikeja.com but i registered ikejaLagos.com instead. Ikeja-lagos is usually the way people refer to ikeja. so i tried to be clever and i purchased ikejalagos since ikeja.com was not available.. I hope to buy ikeja.com at a future date.

  3. Allan says:

    Hello, I am the owner of the domain name Osaka.com

    What I am interested is in Michael & David’s opinion on the domain development potential and value of the domain name of a major non-US city .com ? Also, what is the best way to go about developing a non-US city domain?

    I hope Michael will get to read this comment and respond, cheers

  4. Great interview yet again. Good job.

  5. Awesome interview! Can’t wait to hear David’s as well. I am doing something similar with geo domains but with service industry. Create the website, get it to top of Google then sell the advertising to one sponsor, chiropractor, plastic surgeon, etc…

    Really great advice in this interview and looking forward to using it!

    Peter

  6. Avraham says:

    I want to add that I watched the interview 3 times now, and I could not fail to hear that he has 200 hundred mini sites. What registrar does Costello use?

  7. Dave says:

    Great interview.

    Curious to know what your thoughts would be of acquiring a solid GEO .net/.org

    Granted most of the destination .com GEO’s are extremely pricey or just unavailable.

    Would you consider these to be a good alternative to the .com?
    for example newyork.net is for sale

    Yes you will be missing out on the type-ins, but you should be able to pick these up for much cheaper prices if they are available …

    • Michael Castello says:

      Dave, you get what you pay for. I understand you point though. You can give ANY gTLD value with your time and unique content inserted into the site. Go for building a great site and always keep your eye on the best domain name. You might be able to acquire it at a later date and will already have the content to make it pop.

  8. Zonqor says:

    Great Show guys, thank you for sharing, much appreciated. I noticed that your sites are still in 90’s design and not updated. Not in content, as they are quite rich and informative. But it seems to be working for you, does this mean that the site design is not that important?

    • Michael Castello says:

      Zonqor, It IS important. That is why we keep many of our successful sites simple. Works well also for sites like DrudgeReport.com and Google.com.

      We also have global brands and there are many countries that still don’t have the bandwidth to easily download database driven sites like WordPress. David and I recently spoke in Uruguay. Our simple sites came right up while our more complex, modern sites dragged.

      It’s about the money and visitor experience first. They want information and that is what drives revenue. The pretty stuff can always come later.

  9. Gnanes says:

    Great interview yet again. Good job.

  10. Steve says:

    Great interview to both of you, seems there were all the right questions and all the right answers.

    See you in Chicago Mike.

  11. Also, Domain King, Schwartz will be a great interview, Keep them rolling in, Michael!

  12. Phoenix Dude says:

    Michael,

    Thanks for the great interview.

    I am just implementing some of your content advice on my site now (P-h-o-e-n-i-x.org)

  13. The Cypriot says:

    Bravo!

    Brilliant interview, salute for not holding back and sharing your knowledge with us. Wishing The Castello Brothers all the best with their ventures, especially Nashville.com : ]

    @DomainSherpa, been listening to many of your interviews, they have all been world class. Any chance of getting the one and only Garry Chernoff sometime? :]]]

  14. Thanks everyone for their kind words.

    @ Poor Uncle – While a loan for RedondoBeach.com might be considered large, done correctly the name should pay for itself in several years. I know its not easy these days to get a loan but you might find the seller these will take even less then you thought. Keep trying. If you get one of these destination geos it will be well worth it.

    @ Anunt – It really depends on the name. If the premium domain name has parking rust it will take some time to get the interest back into it. once you create something your potential traffic will enjoy. You will first need the search engines traffic to recondition it. It will eventually start to get direct traffic and will generate its own interest after some work. Just a few minutes a day toward a project can go a long way and be a benefit for many years.

    The domain you are interested in may be worth it but I would need to see what the name is. You can always wrote me at michael@ccin.com, I will give you my honest opinion.

  15. Anunt says:

    Definately a great interview…watched it twice…great questions and answers…you did not hold back on asking daring questions that people love to know answers to but are scared to ask…loved it!

    I have a question of my own:

    I am in the process of buying a great one word dot com multi-million dollar industry product domain name for around $100k…and i keep having a weak feeling and hesitating about buying this domain name because it does not have any type-in traffic. I see alot of people lately buying killer domain names without any type-in traffic for large amounts of money.

    Would you guys buy a category killer domain name for $100k+ that has NO type-in traffic?

    thanks!

  16. BullS says:

    Yea, you still can get KILLER geo domain names in Africa and in the great cities of Afghanistan, Iraq, Sudan, Congo and emerging “after US Destruction” cities.

  17. Gene says:

    Excellent job, as usual, Michael!

    I must say that, while I don’t always have the utmost respect for a lot of folks in this industry (except you, of course ;-) ), Michael and David are exceptions – and I really admire their business acumen and insights. They’re definitely two of the (very) few guys with whom I’d like to partner on a project one day.

  18. Jon says:

    When it comes to values of GEOs, the words “destination zones” from the interview is the key. And I would further add they have to be destination zones for non-locals. Anotherwords, you need GEO that people all over research as possible vacation destination. And it will not always be city name.

    If you have one of those, you are sitting on cash-printing machine from hotels, vacation rentals, local tourist activities, etc… If your GEO is not tourism destination, then the value drops by 99%, regardless of how big or how famous the city is. You then have to make money from ads targeting locals, and that is 10 times more work for 10 times less money.

  19. Earl Naegele says:

    Michael(s).

    Great interview. We don’t have a single geo in our portfolio, you got me thinkin’. Might be picking up a local name that we can leverage with our other businesses.

    Good job guys. Very insightful.

    E

    • Earl, I felt the same way after I completed this interview with Michael. I felt the same way when I conducted the interview on geo-domains with Elliot Silver too! Maybe one day I’ll buy a geo-domain too. :)

  20. Poor Uncle says:

    Unfortunately, even the second tier cities still carry a price tag of 6 figures…at least the ones I had asked…Like RedondoBeach.com, Torrance.com, and my home town, RanchoCucamonga.com.

    • Good point, Poor Uncle. It may require some persistence and a great deal of luck to acquire even a “tier 2″ geo-domain. I’ll ask Michael Castello if he has any further suggestion about your point.

  21. Chuckie says:

    The sales tactics that Michael Castello provided were worth my time watching the whole video. Cyger was hilarious when he said they were “gold”! Loved it!

    Thanks Castello! Thanks Cyger!

    I am looking forward to David Castello’s interview – I run a small directory and could use some help selling, which appears to be what David does at CCIN.

    Definitely one of my top 3 interviews on Domainsherpa to date.

    • Thanks, Chuckie. Glad you enjoyed this show so much. I agree, there were some fantastic gold nuggets contained in this content that any directory owner would be well served to pay attention to.

      Top 3 interviews? Great! :)

  22. Avraham says:

    Great Interview, note he focused on CONTENT and not on Google INVENTED page rank. It is not irrelevant, but not the bottom line.

    • Avraham: exactly. As I pointed out in the interview, Michael Castello doesn’t need to focus on PageRank because he already has the best known domain name in Palm Springs and enormous traffic to the website. The customers (advertisers) care about the traffic; the end user customers visiting the site to learn more about Palm Springs want great content.

  23. TJ says:

    Michael Castella is a great guy. Love the openness and willingness to share so much. (I aspire to have a business like his someday.) I just read the transcript and can’t wait to watch the video tomorrow at lunch.

    Cheers, Michaels. Well done.

    • Thanks, TJ. Glad to hear you enjoyed the interview script and use the audio as well.

      I love to listen to audio programs when I’m driving and working out; pleased to hear you make use the videos during your lunch break.

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