Business

Since registering a domain name with the goal of making a profit, I've been wondering if my investment will pay off, and it reminded me of a funny anecdote I once read about Milton Friedman regarding doubtful authenticity:

    One Saturday afternoon in downtown Chicago, Milton Friedman, the famous free-market economist, was shopping with his wife.

    "Look Milton!" exclaimed Mrs. Friedman. "There's a $20 bill on the sidewalk!"

    "Don't be foolish, my dear," replied the Nobel laureate. "If that was a $20 bill, someone would have picked it up by now."

Source:
Contemporary Strategy Analysis
by Robert M. Grant - page 223

If there is money to be made on AdvocateBlog.com, wouldn't the experts in the business already have registered that domain name? We'll see what happens.

As someone who sells items on eBay periodically, I found it surprising that eBay has announced a new fee structure that gives sellers like me less of an incentive to sell items through their site.

The new fee schedule (basic fees and feature fees) will take effect on Feb 20, 2008 that reduces insertion fees, increases final value fees and does not refund reserve fees. According to an announcement from Bill Cobb, President of eBay North America, their goal in making these changes was to "improve the overall experience for our customers."

However, the new fee structure will have the opposite effect on me. Here is a comparison of fees before and after the change for a typical auction that I would run on their site with a starting price of $0.99, a reserve price of $24.99, and a final value price of $75.00.

Fee before the change: $3.89 ($0.60 insertion fee, plus $0.35 gallery picture fee, plus $2.94 final value fee, plus $0.00 reserve fee [$1.00 reserve fee refunded if item sells])

Fee after the change: $5.49 ($0.55 insertion fee, plus $0.00 gallery picture fee, plus $3.94 final value fee, plus $1.00 reserve fee [reserve fee not refunded if item sells])

There would be a $1.60 increase in cost for a typical item that I would sell on eBay. If the item doesn't sell, my fee would be $1.95 before the change vs. $1.55 after the change, which is a $0.40 decrease in cost compared with the old fee structure.

But, my goal is to sell the item, not to have it listed and then expire unsold meanwhile paying eBay just for the privilege. Because my items sell virtually every time, I don't feel that the risk of having an unsold item needs to be mitigated. The benefit of a $0.40 savings for having an unsold item does not offset a $1.60 increase in cost to sell the item.

Needless to say, this new fee structure doesn't quite satisfy their goal of improving my overall experience and encouraging me to list more items on eBay.

Inspired by a blog posting by Erik Heels about registering generic domain names with the goal of profiting from their future sale, I just registered AdvocateBlog.com.

Erik is conducting an experiment by taking a methodical approach toward making an investment in a portfolio of domain names. He took 183 frequently-used short generic words and then coupled them all with a "blog.com" suffix. He purchased these domain names in August 2007 and noted that there are already some interesting results after five months of ownership.

These days the value of domain names is widely understood, and it seems that virtually any potentially valuable name already has been registered. But I figured AdvocateBlog.com could be worth something to someone in the future because if you are an advocate for something, you would want to write about it, and where better to do that than on a blog.

So, I've now dipped my toe into the business of domaining by initiating my annual $10 investment in AdvocateBlog.com. It was somewhat surprising to me that this domain was available, as there are so many things to be an advocate about. But therein may lie its weakness; maybe it's too generic of a name. If someone wanted to start a blog advocating ethanol subsidies, wouldn't he or she just register EthanolSubsidyAdvocate.com? Time will tell.

Wallop is a new social networking site with an interesting revenue opportunity for Flash developers. Wallop members can express themselves online by purchasing Flash-based interactive elements (called Wallop Mods) to characterize their digital presence. Flash developers can produce these Wallop Mods and sell them on the Wallop Modder Network.

This opportunity for making money in the Wallop digital universe reminds me of two articles I've read (Business Week | Wired) about people making a living by selling digital assets in the Second Life virtual world.